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Table of Contents
Medtronic plc
Notes to Consolidated Financial Statements (Continued)
82
Fiscal Year 2014
The fair values of the assets acquired and liabilities assumed during fiscal year 2014 are as follows:
(in millions) TYRX,
Inc. All Other Total
Current assets $ 6 $ 14 $ 20
Property, plant, and equipment 1 7 8
Intangible assets 94 61 155
Goodwill 132 123 255
Total assets acquired 233 205 438
Current liabilities 4 12 16
Long-term deferred tax liabilities, net 7 7
Total liabilities assumed 11 12 23
Net assets acquired $ 222 $ 193 $ 415
TYRX, Inc.
On December 30, 2013, the Company acquired TYRX, Inc. (TYRX), a privately-held developer of antibiotic drug and implanted
medical device combinations. TYRX's products include those designed to reduce surgical site infections associated with implantable
pacemakers, defibrillators, and spinal cord neurostimulators. Under the terms of the agreement, the transaction included an initial
up-front payment of $159 million, representing a purchase price amount that was net of acquired cash, including the assumption
and settlement of existing TYRX debt and direct acquisition costs. Total consideration for the transaction was approximately $222
million, which included estimated fair values for product development-based and revenue-based contingent consideration of $25
million and $35 million, respectively. The product development-based contingent consideration includes a future potential payment
of $40 million upon achieving certain milestones, and the revenue-based contingent consideration payments equal TYRX's actual
annual revenue growth for the company's fiscal years 2015 and 2016. Based upon the acquisition valuation, the Company acquired
$94 million of technology-based intangible assets with an estimated useful life of 14 years and $132 million of goodwill. The
acquired goodwill is not deductible for tax purposes.
The Company accounted for the acquisition of TYRX as a business combination using the acquisition method of accounting.
Acquisition-Related Items
During fiscal year 2016, the Company recorded charges from acquisition-related items of $283 million, primarily related to costs
incurred in connection with the Covidien acquisition. The charges incurred in connection with the Covidien acquisition include
$219 million of professional services and integration costs and $58 million of accelerated or incremental stock compensation
expense.
During fiscal year 2015, the Company recorded charges from acquisition-related items of $550 million, primarily related to costs
incurred in connection with the Covidien acquisition. The charges incurred in connection with the Covidien acquisition include
$275 million of professional services and integration costs, $189 million of accelerated or incremental stock compensation expense,
and $69 million of incremental officer and director excise tax. These amounts are included within acquisition-related items in the
consolidated statements of income.
During fiscal year 2014, the Company recorded net charges from acquisition-related items of $117 million, primarily including
IPR&D and long-lived asset impairment charges of $236 million related to the Ardian, Inc. (Ardian) acquisition recorded in the
third quarter of fiscal year 2014. The impairment charges were partially offset by income of $138 million related to the change in
fair value of contingent consideration associated with acquisitions subsequent to April 29, 2009. These amounts are included within
acquisition-related items in the consolidated statements of income.
Contingent Consideration
Certain of the Company’s business combinations and purchases of intellectual property involve the potential for the payment of
future contingent consideration upon the achievement of certain product development milestones and/or various other favorable