3M 2008 Annual Report Download - page 61

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(17) In December 2008, 3M (Consumer and Office Business) purchased certain assets of the Futuro health supports
and compression hosiery product line business, headquartered in Cincinnati, OH, from Beiersdorf AG.
Purchased identifiable intangible assets totaled $794 million and will be amortized on a straight-line basis over a
weighted-average life of 13 years (lives ranging from 1 to 19 years). Acquired patents of $40 million will be amortized
over a weighted-average life of 11 years and other acquired intangibles of $696 million, primarily customer
relationships and tradenames, will be amortized over a weighted-average life of 13 years. Indefinite-lived assets of
$58 million were purchased in the Meguiar’s acquisition detailed above, which relate to a well recognized brand
name for a company that has been in existence for more than 100 years. Pro forma information related to the above
acquisitions is not included because the impact on the Company’s consolidated results of operations is not
considered to be material. In-process research and development charges associated with these business
combinations were not material.
The purchase price allocation for all 2008 business combinations is considered preliminary, as adjustments within the
allocation period are possible. The impact on the consolidated balance sheet of the purchase price allocations
related to acquisitions, including adjustments relative to other acquisitions within the allocation period, follows:
Asset (Liability)
(Millions)
Aearo
Holding
Corp.
Other
Acquisitions
2008
Total
Accounts receivable ............................................. $ 76 $ 70 $ 146
Inventory............................................................... 81 89 170
Other current assets............................................. 7 8 15
Property, plant, and equipment — net ................. 78 83 161
Purchased intangible assets ................................ 417 377 794
Purchased goodwill .............................................. 798 594 1,392
Accounts payable and other liabilities, net of other
assets ............................................................... (200 ) (104 ) (304 )
Interest bearing debt ............................................ (684 ) (125 ) (809 )
Deferred tax asset/(liability).................................. (50 ) (121 ) (171 )
Net assets acquired.............................................. $ 523 $ 871 $ 1,394
Supplemental information:
Cash paid ............................................................. $ 562 $ 897 $ 1,459
Less: Cash acquired............................................. 39 26 65
Cash paid, net of cash acquired........................... $ 523 $ 871 $ 1,394
Non-cash (3M shares at fair value) ...................... — — —
Net assets acquired.............................................. $ 523 $ 871 $ 1,394
In addition to business combinations, 3M periodically acquires certain tangible and/or intangible assets and
purchases interests in certain enterprises that do not otherwise qualify for accounting as business combinations.
These transactions are largely reflected as additional asset purchase and investment activity.
2007/2006 acquisitions:
During 2007, the purchase price paid for business combinations totaled $539 million, net of cash acquired, plus
approximately 150 thousand shares of 3M common stock, which had a market value of approximately $13 million.
The 16 business combinations completed during 2007 are summarized as follows:
1) In February 2007, 3M (Industrial and Transportation Business) purchased certain assets of Accuspray Application
Technologies Inc., a manufacturer of spray paint equipment with a wide array of spray guns for architectural,
automotive refinishing, industrial and woodworking applications.
2) In February 2007, 3M (Industrial and Transportation Business) purchased Sealed Air Corporation’s 50 percent
interest in PolyMask Corporation, a joint venture between 3M and Sealed Air that produces protective films. The
acquisition of Sealed Air’s interest results in 100 percent ownership by 3M.
3) In February 2007, 3M (Health Care Business) purchased 100 percent of the outstanding shares of Acolyte
Biomedica Ltd., a Salisbury, U.K.-based provider of an automated microbial detection platform that aids in the rapid
detection, diagnosis, and treatment of infectious diseases.