Medtronic 2012 Annual Report Download - page 27

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generated growth through our R&D efforts, historically we have relied, and expect to continue to rely, upon
acquisitions, investments, and alliances to provide access to new technologies both in areas served by our
existing businesses as well as in new areas and markets.
We expect to make future investments or acquisitions where we believe that we can stimulate the
development of, or acquire new technologies and products to further our strategic objectives and strengthen
our existing businesses. Mergers and acquisitions of medical technology companies are inherently risky and
no assurance can be given that any of our previous or future acquisitions will be successful or will not
materially adversely affect our consolidated results of operations, financial condition, and/or cash flows.
Fiscal Year 2012
On August 31, 2011, we acquired Salient. Salient develops and markets devices for haemostatic sealing
of soft tissue and bone incorporating advanced energy technology. Salient’s devices are used in a variety of
surgical procedures including orthopedic surgery, spine, open abdominal, and thoracic procedures. Total
consideration for the transaction was approximately $497 million. We had previously invested in Salient
and held an 8.9 percent ownership position in the company. In connection with the acquisition of Salient,
we recognized a gain on our previously-held investment of $32 million, which was recorded within
acquisition-related items in the consolidated statement of earnings in the second quarter of fiscal year 2012.
Net of this ownership position, the transaction value was approximately $452 million.
On August 31, 2011, we acquired PEAK. PEAK develops and markets tissue dissection devices
incorporating advanced energy technology. Total consideration for the transaction was approximately
$113 million. We had previously invested in PEAK and held an 18.9 percent ownership position in the
company. In connection with the acquisition of PEAK, we recognized a gain on our previously-held
investment of $6 million, which was recorded within acquisition-related items in the consolidated statement
of earnings in the second quarter of fiscal year 2012. Net of this ownership position, the transaction value
was approximately $96 million.
Fiscal Year 2011
On January 13, 2011, we acquired privately-held Ardian, Inc. (Ardian). We had previously invested in
Ardian and held an 11.3 percent ownership position. Ardian develops catheter-based therapies to treat
uncontrolled hypertension and related conditions. Total consideration for the transaction was $1.020 billion
which includes the estimated fair value of revenue-based contingent consideration of $212 million. The
terms of the transaction included an upfront cash payment of $717 million, excluding our pro-rata share in
Ardian, plus potential future commercial milestone payments equal to the annual revenue growth beginning
in fiscal year 2012 through the end of our fiscal year 2015. We recognized a gain of $85 million on our
previously-held investment, which was recorded within acquisition-related items in the consolidated
statement of earnings in the third quarter of fiscal year 2011.
On November 16, 2010, we acquired Osteotech, Inc. (Osteotech). Osteotech develops innovative
biologic products for regenerative medicine. Under the terms of the agreement, we paid shareholders
$6.50 per share in cash for each share of Osteotech common stock that they owned. Total consideration for
the transaction was approximately $123 million.
On August 12, 2010, we acquired ATS Medical, Inc. (ATS Medical). ATS Medical is a leading developer,
manufacturer, and marketer of products and services focused on cardiac surgery, including heart valves and
surgical cryoablation technology. Under the terms of the agreement, ATS Medical shareholders received
$4.00 per share in cash for each share of ATS Medical common stock that they owned. Total consideration
for the transaction was approximately $394 million which included the assumption of existing ATS Medical
debt and acquired contingent consideration.
On June 2, 2010, we acquired substantially all of the assets of Axon Systems, Inc. (Axon), a privately-
held company. Prior to the acquisition, we distributed a large portion of Axon’s products. This acquisition
has helped us bring to market the next generation of surgeon-directed and professionally supported spinal
and cranial neuromonitoring technologies and expand the availability of these technologies. Total
consideration for the transaction, net of cash acquired, was $62 million, which included the settlement of
existing Axon debt.
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