INTEGRA LIFESCIENCES HOLDINGS CORPIART
INTEGRA LIFESCIENCES HOLDINGS CORP Goodwill & Intangibles Disclosure
GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
In accordance with FASB Topic 350, Intangibles—Goodwill and Other (“ASC 350”), goodwill is not subject to amortization but is tested for impairment at the reporting unit level annually in the third quarter. Additionally, the Company may perform
interim tests of goodwill for impairment if an event occurs or circumstances change that could potentially reduce the fair value of a reporting unit below its carrying amount. The carrying value of each reporting unit is determined by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. An impairment loss is recognized when the reporting unit’s carrying amount exceeds its estimated fair value.
The Company tests for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors, including reporting unit specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of a reporting unit is less than its carrying amount, including goodwill. The Company may elect to bypass this qualitative evaluation for some or all of its reporting units and perform a quantitative test. The quantitative test uses a combination of both an income approach and a market approach to determine the fair value of the reporting unit. The income approach utilizes the estimated discounted cash flows for the reporting unit, while the market approach utilizes comparable publicly-traded companies’ revenue and earnings before interest, taxes, depreciation, and amortization (“EBITDA”) multiples. Estimates and assumptions used in the income approach to calculate projected future discounted cash flows included revenue growth rates, cost of sales, terminal growth rates, and a discount rate for each reporting unit. Discount rates are determined using a weighted average cost of capital for risk factors specific to each reporting unit and other market and industry data. The assumptions used are inherently subject to uncertainty and slight changes in these assumptions could have a significant impact on the concluded value. The estimates and assumptions applied represent a Level 3 measurement in the fair value hierarchy. Level 3 inputs are supported by limited or no market activity and reflect the Company’s assumptions in measuring fair value.
The key assumptions impacting the valuation included the following:
•The reporting unit’s financial projections, including revenue growth rates and cost of sales, which are based on management’s assessment of regional and macroeconomic variables, industry trends and market opportunities, and the Company’s strategic objectives and future growth plans.
•The projected terminal value for the reporting unit, which represents the present value of projected cash flows beyond the last period in the discounted cash flow analysis. The terminal value reflects the Company’s assumptions related to long-term growth rates and profitability, which are based on several factors, including local and macroeconomic variables, market opportunities, and future growth plans.
•The discount rate used to measure the present value of the projected future cash flows is set using a weighted-average cost of capital method that considers market and industry data as well as the Company’s specific risk factors that are likely to be considered by a market participant. The weighted-average cost of capital is the Company’s estimate of the overall after-tax rate of return required by equity and debt holders of a business enterprise.
During the second quarter of 2025, the Company performed a quantitative assessment of its Tissue Technologies, Neurosurgery, and Instruments and ENT reporting units in accordance with ASC 350 due to the decrease in the price per share of the Company’s common stock related to a number of factors including recent tariff changes that have created broad economic uncertainty and the impact of quality, operational, and supply issues. The Company recognized an aggregate charge of $511.4 million in goodwill impairment expense in the consolidated statement of operations in the second quarter of 2025. The quantitative test for the Tissue Technologies reporting unit utilized a terminal growth rate of 2.5% and a discount rate of 13.5% in the income approach. The Company determined, after performing the quantitative analysis, that the fair value of the Tissue Technologies reporting unit was less than its carrying amount and recognized an impairment of $123.3 million. The quantitative test for the Neurosurgery reporting unit utilized a terminal growth rate of 2.5% and a discount rate of 13.5% in the income approach. The Company determined, after performing the quantitative analysis, that the fair value of the Neurosurgery reporting unit was less than its carrying amount and recognized an impairment of $249.0 million. The quantitative test for the Instruments and ENT reporting unit utilized a terminal growth rate of 2.5% and a discount rate of 12.0% in the income approach. The Company determined, after performing the quantitative analysis, that the fair value of the Instruments and ENT reporting unit was less than its carrying amount and recognized an impairment of $139.1 million.
In the third quarter of 2025, the Company performed its annual test of its reporting units for impairment and completed a qualitative evaluation of its Tissue Technologies and Neurosurgery reporting units. The Instruments and ENT reporting unit had been deemed fully-impaired during the second quarter of 2025 and was excluded from this evaluation. After performing the qualitative analysis, the Company concluded that it was more likely than not that the fair values of the Tissue Technologies and Neurosurgery reporting units were greater than their carrying amounts. Therefore, it was not necessary to perform a quantitative impairment test.
The Company did not recognize any goodwill impairment charges during 2024.
Changes in the carrying amount of goodwill in 2025 and 2024 were as follows:
| Dollars in thousands | Codman Specialty Surgical | Tissue Technologies | Total | ||||||||||||||
Goodwill at January 1, 2024 | 666,937 | 388,525 | 1,055,462 | ||||||||||||||
| Acclarent Acquisition | 62,482 | — | 62,482 | ||||||||||||||
| Foreign currency translation | (13,689) | (7,303) | (20,992) | ||||||||||||||
Balance at December 31, 2024 | $ | 715,730 | $ | 381,222 | $ | 1,096,952 | |||||||||||
| Impairment | (388,106) | (123,259) | (511,365) | ||||||||||||||
| Foreign currency translation | 16,543 | 13,027 | 29,570 | ||||||||||||||
Balance at December 31, 2025 | $ | 344,167 | $ | 270,990 | $ | 615,157 | |||||||||||
Other Intangible Assets
The components of the Company’s identifiable intangible assets were as follows:
| December 31, 2025 | |||||||||||||||||||||||
| Dollars in thousands | Weighted Average Life | Cost | Accumulated Amortization | Net | |||||||||||||||||||
| Completed technology | 17 years | $ | 1,486,304 | $ | (632,204) | $ | 854,100 | ||||||||||||||||
| Customer relationships | 12 years | 169,369 | (145,187) | 24,182 | |||||||||||||||||||
| Trademarks/brand names | 27 years | 103,454 | (47,799) | 55,655 | |||||||||||||||||||
| Codman trade name | Indefinite | 179,959 | — | 179,959 | |||||||||||||||||||
| Supplier relationships | 30 years | 30,211 | (20,104) | 10,107 | |||||||||||||||||||
| All other | 6 years | 23,434 | (12,774) | 10,660 | |||||||||||||||||||
| $ | 1,992,731 | $ | (858,068) | $ | 1,134,663 | ||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||
| Dollars in thousands | Weighted Average Life | Cost | Accumulated Amortization | Net | |||||||||||||||||||
| Completed technology | 17 years | $ | 1,452,545 | $ | (525,959) | $ | 926,586 | ||||||||||||||||
| Customer relationships | 12 years | 166,038 | (137,186) | 28,852 | |||||||||||||||||||
| Trademarks/brand names | 27 years | 99,951 | (42,173) | 57,778 | |||||||||||||||||||
| Codman trade name | Indefinite | 168,202 | — | 168,202 | |||||||||||||||||||
| Supplier relationships | 30 years | 30,211 | (19,126) | 11,085 | |||||||||||||||||||
| All other | 6 years | 22,820 | (7,735) | 15,085 | |||||||||||||||||||
| $ | 1,939,767 | $ | (732,179) | $ | 1,207,588 | ||||||||||||||||||
Intangible Assets with Indefinite Lives
The Company does not amortize intangible assets with indefinite lives but tests its intangible assets with indefinite lives for impairment annually in the third quarter in accordance with ASC 350. Additionally, the Company performs interim tests of its intangible assets with indefinite lives for impairment if an event occurs or circumstances change that could potentially reduce the fair value of an indefinite lived intangible asset below its carrying amount. The Company tests for impairment by either performing a qualitative evaluation or a quantitative test. The qualitative evaluation is an assessment of factors, including specific operating results as well as industry, market and general economic conditions, to determine whether it is more likely than not that the fair values of the intangible asset is less than its carrying amount. The Company may elect to bypass this qualitative evaluation and perform a quantitative test.
During the second quarter of 2025 the Company performed a quantitative assessment of its Codman tradename intangible asset in accordance with ASC 350 due to the decrease in the price per share of the Company’s common stock related to a number of factors including recent tariff changes that have created broad economic uncertainty and the impact of quality, operational, and supply issues. In performing this test, the Company utilized a discount rate of 14.5%. The assumptions used in evaluating the Codman tradename for impairment are subject to change and are tracked against historical results by management. Based on the results of the quantitative test, the Company recorded no impairment to the Codman tradename intangible asset.
In the third quarter of 2025, the Company performed its annual test of its intangible assets with indefinite lives for impairment and completed a qualitative evaluation of its Codman tradename intangible asset. After performing the qualitative analysis, the Company concluded that it was more likely than not that the fair value of the Codman tradename intangible asset was greater than its carrying amount. Therefore, it was not necessary to perform a quantitative impairment test.
The Company did not recognize any impairment charges on its intangible assets with indefinite lives during 2024.
Intangible Assets with Definite Lives
Developed technologies and other definite-lived intangible assets are amortized over their estimated useful lives either using the straight-line method or, if reliably determinable, based on the pattern of which the economic benefit of the asset is expected to be utilized. Definite-lived intangible assets are periodically evaluated for impairment in accordance with FASB Topic 360, Property, Plant and Equipment (“ASC 360”) whenever events or changes in circumstances indicate that a definite-lived intangible asset’s carrying value may not be recoverable.
Total amortization of intangible assets (including amounts reported in cost of product revenues for technology-based intangible assets) in 2025 was $107.1 million compared to $105.2 million in 2024. Of this amount, $92.1 million and $84.0 million, respectively, was related to amortization of technology based intangibles and included in cost of goods sold.
Based on quarter-end exchange rates, amortization expense (including amounts reported in cost of goods sold) is expected to be approximately $107.6 million in 2026, $106.6 million in 2027, $103.0 million in 2028, $97.7 million in 2029, $91.6 million in 2030 and $447.7 million thereafter.
In the first quarter of 2024, due to third-party audit findings and an update to the estimated timeframe to resume the commercial distribution of products manufactured in the Company’s manufacturing facility located in Boston, Massachusetts (the “Boston facility”), the Company elected to perform quantitative impairment testing on certain definite-lived intangible assets including completed technology and customer relationships in accordance with ASC 360. The Company recorded an impairment charge related to the definite-lived intangible asset associated with the customer relationships of $7.1 million in intangible asset amortization in the consolidated statement of operations. With respect to the definite-lived intangible assets associated with the completed technology of SurgiMend® and PriMatrix®, the Company determined that the carrying amount of these definite-lived intangible assets were recoverable and, therefore, the intangible assets were not deemed to be impaired. In the second quarter of 2024, the Company approved a plan to transition the manufacturing of SurgiMend and PriMatrix from the Boston facility to the Company’s manufacturing facility in Braintree, Massachusetts (the “Braintree facility”). The Company considered the impact to the update to the estimated timeframe to resume the commercial distribution of products manufactured in the Boston facility on the assumptions used in the quantitative assessment of the definite-lived intangible assets completed in the first quarter of 2024, which did not require further evaluation for impairment. The carrying values of SurgiMend and PriMatrix are $25.6 million and $20.0 million, respectively, as of December 31, 2025.
Potential Impact of Risks and Uncertainties on Management’s Estimates
The rapidly evolving tariff changes imposed by the U.S. and other countries since early 2025 have created increased risks and uncertainties surrounding the Company’s future results of operations. In 2025 President Trump announced reciprocal tariffs on many countries and certain countries, such as China, have responded with retaliatory tariffs. In February 2026, the U.S. Supreme Court issued a 6–3 ruling invalidating the U.S. Administration’s tariff program implemented under the International Emergency Economic Powers Act (“IEEPA”), concluding that the IEEPA did not authorize the broad import duties previously imposed. Additionally, in September 2025, the U.S. Department of Commerce initiated national security investigations into medical equipment, devices, and robotics. The tariff environment has continued to shift throughout the 2025 calendar year, with new measures being proposed, paused, implemented, and countered, contributing to broader trade policy uncertainty. The assumptions used by the Company in its quantitative tests of goodwill and intangible assets are inherently subject to uncertainty and slight changes in these assumptions, including the extent and duration of any subsequent changes in U.S. import tariffs and reciprocal measures by China and the resulting impact on general economic conditions and on the Company’s business, could have a significant impact on the concluded values.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 26, 2019 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.