v3.26.1
Acquisitions
 6 Months Ended
Jul. 04, 2026
Business Combination [Abstract]  
Acquisitions
4 Acquisitions
On February 9, 2026, the Company completed the BDS Business Acquisition with an acquisition-date fair value of total consideration transferred of $13 billion, including the issuance of 38,542 thousand shares of Waters common stock. There is no contingent consideration related to this acquisition. As a result, upon completion of the BDS Business Acquisition, the Record Date BD Shareholders owned approximately 39.2% of the outstanding shares of
 
 
Waters common stock, and former Waters shareholders owned approximately 60.8%
of the outstanding shares of Waters common stock, in each case, on a fully diluted basis. The results of the BDS Business are included in the Company’s consolidated financial statements from the Closing Date.
The Company preliminarily allocated the purchase price of the BDS Business Acquisition to identifiable assets acquired and liabilities assumed based on their estimated fair values as of the Closing Date. The purchase price allocation was based upon preliminary information and is subject to change if additional information about the facts and circumstances that existed at the Closing Date becomes available. The Company is in the ongoing process of conducting a valuation of the assets acquired and liabilities assumed related to the BDS Business Acquisition. As a result, the preliminary amounts recognized may be adjusted during the measurement period (not to exceed one year from the Closing Date) as additional information about facts and circumstances that existed as of the Closing Date becomes available. The final fair value of the net assets acquired may result in adjustments to these assets and liabilities, including goodwill.
 
The following table represents the total consideration paid by Waters as of the Closing (in millions, except share data and exchange ratio):
 
    
Amount
  
Number of fully diluted shares of Company common stock immediately prior to the BDS Business Acquisition (a)
      60,075  
Share issuance ratio
      0.64474  
  
 
 
  
Number of shares of Company common stock issued to BD shareholders as a result of the BDS Business Acquisition
      38,733  
Less: SpinCo Make Whole Awards (b)
      (191 ) 
  
 
 
  
Number of shares of Company common stock issued to BD common stockholders
      38,542  
Company common stock price (c)
      332.29  
  
 
 
  
Fair value of Company common stock issued
    $ 12,807  
  
 
 
  
Fair value of share-based compensation awards issued to SpinCo Business Employees related to
pre-combination
services (d)
      28  
Estimated net working capital adjustment
      121  
Financing fees paid on behalf of SpinCo
      5  
  
 
 
  
Total BDS Business Acquisition consideration
    $ 12,961  
  
 
 
  
 
(a)
The following table represents the number of fully diluted shares of the Company’s common stock:
 
    
Amount
  
Number of shares of Company common stock issued and outstanding (excluding Company common stock held in treasury)
      59,560  
Number of shares of Company common stock issued upon conversion of Company equity awards
      515  
  
 
 
  
Number of fully diluted shares of Company common stock immediately prior to the BDS Business Acquisition
      60,075  
 
(b)
The number of shares of Company common stock underlying the Company’s restricted stock unit awards (the “Waters RSU Awards”) and the Company’s stock appreciation right awards (the “Waters SAR Awards”) that were awarded in respect of BD awards, pursuant to the Employee Matters Agreement, based on BD awards outstanding.
(c)
Represents the opening price per share of the Company’s common stock as reported by the New York Stock Exchange on February 9, 2026.
(d)
Consideration for replacement of outstanding equity awards of BD held by employees of Conveying Businesses. All outstanding BD stock appreciation right awards (whether vested or unvested) held by an employee of SpinCo of a Conveying Business as of immediately prior to the Distribution Time was converted, as of the Effective Time, into Waters SAR Awards and all BD time-based restricted stock unit awards and BD performance-based restricted stock unit awards held by an employee of SpinCo of a Conveying Business as of immediately prior to the Distribution Time were converted, as of the Effective Time, into Waters RSU Awards as set forth in the Employee Matters Agreement. A portion of the fair value of equity awards held by employees of SpinCo associated with Conveying Businesses and replaced as a result of the BDS Business Acquisition represents consideration transferred because it relates to services rendered by such BDS Business employees to BD prior to the BDS Business Acquisition. This amount is calculated based on the ratio of the pre-combination service period (from the grant date until the Closing Date) to the longer of the original total service period or the modified service period, if any, multiplied by the fair value of the BD awards (the number of BD awards multiplied by the BD share price on the Closing Date). The Company has incurred compensation expense of $
7 
million related to services from the Closing Date through July 4, 2026. 
 
 
The assets and liabilities of the Deferred Close Businesses did not legally transfer as of the Closing and are excluded from purchase accounting as of the Closing Date. The Company transferred $129 million of consideration as of the Closing for the Deferred Close Businesses, which was recorded as a prepaid deposit asset on the opening balance sheet as of February 9, 2026, representing the future transfer of a business to the Company. The fair value of the prepaid deposit was preliminarily determined using a relative fair value allocation of the total consideration transferred, based on the proportion of the estimated fair value of the Deferred Close Businesses to the aggregate estimated fair values of all identifiable assets acquired and liabilities assumed.
The prepaid deposit asset is recorded in Other assets in the consolidated balance sheets as of July 4, 2026.
During the three months ended July 4, 2026, the Company reassessed its estimates and inputs as new information about facts and circumstances that existed as of the Closing Date became known. As a result, the Company recorded a $95 million net increase in goodwill as a measurement period adjustment. The increase to goodwill consists principally of a $75 million increase resulting from changes in estimates including jurisdictional deferred tax items and the tax impact of pre-tax measurement period adjustments, a $16 million net decrease in long-term net assets, primarily long-term lease liabilities as well as a net decrease in net working capital of $4 million. The cumulative impact of these measurement period adjustments on the income statement, had those adjustments been made as of the acquisition date, was considered immaterial.
The following table presents the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed on the Closing Date, inclusive of measurement period adjustments (in millions):
 
Purchase Price
   
BDS Business Acquisition Consideration
    $ 12,961  
Less: Prepaid deposit asset for Deferred Close Businesses
      (129 )
 
  
 
 
  
Net consideration
      12,832  
  
 
 
  
Identifiable Net Assets Acquired
   
Assets
   
Cash and cash equivalents
      144  
Accounts receivable
      387  
Inventories
      979  
Other current and
non-current
assets
      225  
Property, plant and equipment
      899  
Intangible assets
      8,384  
Operating lease assets
      296  
Liabilities
   
Accounts payable and accrued expenses
      (321 )
Notes payable and debt
      (4,000 )
Deferred revenue and customer advances
      (119 )
Operating lease liabilities
      (296 )
Other current and
non-current
liabilities
      (197 )
Deferred tax liabilities
      (1,637 )
  
 
 
  
Net Assets Acquired
      4,744  
  
 
 
  
Goodwill
    $ 8,088  
  
 
 
  
Net consideration
    $ 12,832  
  
 
 
  
The fair value estimates for identifiable intangible assets are preliminary and were valued with input from valuation specialists. The Company used variations of the income approach, which uses Level 3 inputs, in determining the fair value of intangible assets acquired in the BDS Business Acquisition. Specifically, the fair values of trade names and developed technology are valued using royalty-based methodologies and customer relationships are valued based on a multi-period excess earnings method, each of which incorporates assumptions and methods suitable for estimating the future economic benefits of these assets. The estimated fair value of the intangible assets is preliminary, subject to change and could vary materially from the final valuations.
 
 
The details of the purchase price allocated to the intangible assets acquired and the estimated useful lives are as follows (in millions):
 
    
Amount
     
Weighted-Average

Life
  
Developed technology – Biosciences
    $ 987        9 years  
Developed technology – Diagnostics
      901        8 years  
Customer relationships – Biosciences
      3,390        15 years  
Customer relationships – Diagnostics
      2,875        15 years  
Trade name – Biosciences
      107        8 years  
Trade name – Diagnostics
      124        8 years  
  
 
 
     
 
 
  
Total
    $ 8,384        13 years  
  
 
 
     
The excess of the total consideration transferred over the fair value of the identifiable net assets resulted in the recognition of goodwill. The
 
Company
 
allocated $
8.1
 billion of the purchase price to goodwill, which is primarily
non-deductible
for tax purposes, in the amounts of $
3.9
 billion, $
3.3
 billion, and $
0.9
 billion to the Biosciences, Advanced Diagnostics and Analytical Sciences & Materials reportable segments, respectively. The goodwill arising from the BDS Business Acquisition consists largely of the value of intangible assets that do not qualify for separate recognition such as workforce in place and cash flows from the expected synergies associated with the integration of acquired technology, distribution channels and products with the Company’s products, which are higher than if the acquired companies’ technology, customer access or products were utilized on a stand-alone basis.
The details of the preliminary fair value allocated to the property, plant and equipment acquired are as follows (in millions):
 
    
Amount
  
Land and land improvements
    $ 48  
Buildings and leasehold improvements
      309  
Production and other equipment
      350  
Construction in progress
      73  
Placed instruments at customers
      119  
  
 
 
  
Total
    $ 899  
  
 
 
  
The useful lives of the acquired property, plant and equipment are consistent with the Company’s accounting policies for property, plant and equipment and asset impairments, as disclosed in its Annual Report on Form
10-K,
and no material changes to such policies were made as a result of the BDS Business Acquisition.
Additionally, a liability arising for contingent warranty obligations of $11 million has been recognized in accordance with Accounting Standards Codification (“ASC”) 450,
Contingencies
, for expected warranty claims on products sold by the BDS Business.
The notes payable and debt of $4.0 billion assumed at the Closing Date of the BDS Business Acquisition were valued using a discounted cash flow model to estimate the amount that a market participant would pay to transfer an identical liability. Refer to Note 6, “Debt” for further information.
During the three and six months ended July 4, 2026, the Company’s consolidated results included revenue of $817 million and $1.3 
b
illion, respectively, and a loss before taxes of $203 million and $326 
million, respectively, since the Closing Date of the BDS Business Acquisition. The Company also incurred transaction, financing and other internal costs of approximately
$1 
million and $58 million during the three and six months ended July 4, 2026, respectively, in connection with the Company’s acquisition of the BDS Business, which are primarily recorded in selling and administrative expenses in the consolidated statement of operations.
 
 
Unaudited Pro Forma Financial Information
The following unaudited pro forma information is presented for illustrative purposes only. It is not necessarily indicative of the actual results of operations that actually would have been realized had the entities been a single company as of January 1, 2025 or the future operating results of the combined entity. The unaudited pro forma information does not give effect to the potential impact of current financial conditions, regulatory matters or any anticipated synergies that may be associated with the BDS Business Acquisition. The unaudited pro forma information also does not include any integration costs that the Company may incur related to the BDS Business Acquisition as part of combining the operations of the companies.
The following unaudited pro forma information shows the results of the Company’s operations for the six months ended July 4, 2026 and June 28, 2025, as if the BDS Business Acquisition had occurred on January 1, 2025 (in millions):
 
    
July 4, 2026
     
June 28, 2025
  
Revenue
    $ 3,185      $ 3,008  
Net loss
      (201 )
 
      (115 )
 
To reflect the BDS Business Acquisition as if it had occurred on January 1, 2025, the unaudited pro forma information includes adjustments to reflect, among other things, corporate allocations, incremental intangible asset amortization to be incurred based on the values of each identifiable intangible asset of the BDS Business and the interest expense from debt financings associated with the BDS Business Acquisition. Pro forma adjustments were tax effected at an estimated effective tax rate for the respective periods.