Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables

  
The final purchase price was allocated to assets acquired and liabilities assumed in the acquisition as follows:  


|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
| (Dollars in millions) | Purchase Price Allocation |
| Cash and cash equivalents | $ | 23  |  |
| Trade receivables, net | 16  |  |
| Inventories | 31  |  |
| Other current assets | 4  |  |
| Property, plant, and equipment | 72  |  |
| Other intangibles, net (1) | 361  |  |
| Other assets | 12  |  |
| Current liabilities | (22) |  |
| Other liabilities | (11) |  |
| Goodwill | 531  |  |
| Total assets acquired and liabilities assumed | $ | 1,017  |  |

(1) Other intangibles, net includes core technology of $338 million and customer relationships of $23 million.  
The carrying value of trade receivables, inventory, and trade payables, as well as certain other current and non-current assets and liabilities, generally represented the fair value at the date of acquisition.  
Property, plant, and equipment assets were valued using the cost approach, which is based on current replacement and/or reproduction cost of the related asset as new, less depreciation attributable to physical, functional, and economic factors. The Company then determined the remaining useful life based on the anticipated life of the asset and Company policy for similar assets.  
Core technology intangible assets of $338 million were valued using the multi-period, excess-earnings method, a method that values the intangible asset using the present value of the after-tax cash flows attributable to the intangible asset only. The significant assumptions used in developing the valuation included the estimated annual net cash flows (including application of an appropriate margin to forecasted revenue, revenue obsolescence rate, selling and marketing costs, return on working capital, contributory asset charges, and other factors), the discount rate that appropriately reflects the risk inherent in each future cash flow stream, and an assessment of the asset’s life cycle, as well as other factors. The assumptions used in the financial forecasts were based on historical data, supplemented by current and anticipated growth rates, management plans, and market-comparable information. Fair-value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. The core technology intangible asset has a weighted average useful life of 10 years.  
Goodwill has been allocated to the Softgel and Oral Technologies segment as shown in Note 4, Goodwill. Goodwill is mainly comprised of growth from expected increases in capacity utilization and new customers. The goodwill resulting from the Bettera Wellness acquisition is deductible for tax purposes.  
Results of this business were not material to the Company's consolidated statement of operations, financial position, or cash flows for the fiscal year ended June 30, 2022.  
Vaccine Manufacturing and Innovation Centre UK Limited Asset Acquisition  
In April 2022, the Company, through its wholly owned subsidiary, Catalent Oxford Limited, acquired a development and manufacturing facility near Oxford, United Kingdom (“U.K.”) and certain related assets and liabilities from The Vaccine Manufacturing and Innovation Centre UK Limited for $134 million in cash, including $9 million of closing costs. The facility and related assets and liabilities became part of the Company’s Biologics segment.   
The Company accounted for this transaction as an acquisition of assets in accordance with ASC 805. The Company funded this acquisition with cash on hand and allocated the purchase price among the net assets acquired, recognizing $1 million of current assets, $165 million of property, plant, and equipment, $18 million of current liabilities, and $14 million of other liabilities. Results of this business were not material to the Company's statement of operations, financial position, or cash flows for the fiscal year ended June 30, 2022.83
