Additional consideration based on earn out

  
Identifiable intangible assets acquired were as follows: 

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  | Weighted Average |
|  |  |  |  | Useful Life |
| (in millions, except for useful life) |  | Amount |  | (in years) |
|  |  |  |  |  |
| Developed technology |  | $ | 66  |  |  | 10 |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |

  
On January 21, 2021, the effective date of the transaction, the Company paid $94 million with the potential for additional earn-out provision payments of up to $10 million, to acquire 100% of the outstanding shares of Datum Dental, Ltd., a privately-held producer and distributor of specialized regenerative dental material based in Israel. The fair value of the earn-out provision has been valued at $9 million as of the transaction date, resulting in a total purchase price of $103 million.  
The fair values of the assets acquired and liabilities assumed in connection with the Datum acquisition were as follows:  


|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
| (in millions) |  |  |  |
|  |  |  |  |
| Cash and cash equivalents |  | $ | 2  |  |  |
| Other current assets |  | 2  |  |  |
| Intangible assets |  | 76  |  |  |
| Current liabilities |  | (2) |  |  |
| Other long-term assets (liabilities), net |  | (14) |  |  |
| Net assets acquired |  | 64  |  |  |
| Goodwill |  | 39  |  |  |
| Purchase consideration |  | $ | 103  |  |  |

  
The purchase price has been allocated on the basis of the estimates of fair values of assets acquired and liabilities assumed, resulting in the recording of $39 million in goodwill, which is considered to represent the value associated with the acquired workforce and synergies the two companies anticipate realizing as a combined company. The goodwill is not deductible for tax purposes. Measurement period adjustments made to the fair values of the assets acquired and liabilities assumed during the year ended December 31, 2021 were immaterial to the financial statements, resulting in an increase to goodwill of $6 million.   
Identifiable intangible assets acquired were as follows: 

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  | Weighted Average |
|  |  |  |  | Useful Life |
| (in millions, except for useful life) |  | Amount |  | (in years) |
|  |  |  |  |  |
| Developed technology |  | $ | 66  |  |  | 15 |
| In-process R&D |  | 10  |  |  | Indefinite |
| Total |  | $ | 76  |  |  |  |
|  |  |  |  |  |
|  |  |  |  |  |

  
2020 Transactions  
On December 31, 2020, the effective date of the transaction, the Company acquired 100% of the outstanding interests of Straight Smile, LLC ("Byte"), a privately-held company, for approximately $1.0 billion using cash on hand. Byte is a doctor-directed, direct-to-consumer, clear aligner business. The acquisition is expected to enhance scale and accelerate the growth and profitability of the Company's combined clear aligners business.   
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