BT 2009 Annual Report Download - page 122

ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS – NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
120 BT GROUP PLC ANNUAL REPORT & FORM 20-F
28. Acquisitions continued
Year ended 31 March 2008
BT Global Services
Comsat International
On 14 June 2007, the group acquired Comsat International Inc (Comsat International) through the purchase of 100% of the issued share
capital of its parent company, CI Holding Corporation. The total purchase consideration was £130m, including £5m deferred, contingent
consideration. The net assets acquired in the transaction and the goodwill arising are as follows:
Fair value
Book value adjustments Fair value
£m £m £m
Intangible assets –1111
Property, plant and equipment 70 1 71
Other non current assets 4–4
Receivables 31 – 31
Cash and cash equivalents 3–3
Payables (58) (5) (63)
Net assets acquired 50 7 57
Goodwill 73
Total consideration 130
Intangible assets recognised in respect of Comsat International comprise customer relationships and a brand. Goodwill represents Comsat’s
geographic presence and capabilities, as well as the assembled workforce. During 2009, the determination of fair values has been
finalised. No adjustments have been made to the balances previously reported.
Other
During 2008, the group acquired a number of other subsidiary undertakings that now form part of BT Global Services. These acquisitions
principally included Frontline Technologies Corporation Limited, i2i Enterprise Private Limited, Net 2S SA and I.NET SpA (I.NET). The total
purchase consideration paid for these subsidiaries was £276m, including £50m deferred, contingent consideration. The group acquired
100% of each company, with the exception of Net 2S SA, where the group had acquired 91% of the issued share capital at 31 March
2008, and I.NET where the group increased its holding by 25% to 90% of the issued share capital in the year. An element of the purchase
consideration for Net 2S SA was satisfied through the issue of shares in BT Group plc. A total of 10,572,177 shares were issued, with a fair
value of £22m. The fair value of the shares issued was determined by reference to the BT Group plc share price on the date the shares were
issued. In 2009, the group increased its holding in Net 2S SA to 98.9%. The combined net assets acquired in these transactions and the
goodwill arising is as follows:
Fair value
Book value adjustments Fair value
£m £m £m
Intangible assets 44852
Property, plant and equipment 15 (4) 11
Associates and joint ventures 14 – 14
Receivables 112 (6) 106
Cash and cash equivalents 17 – 17
Payables (130) (1) (131)
Minority interest 14 (1) 13
Net assets acquired 46 36 82
Goodwill 194
Total consideration 276
Intangible assets recognised in respect of these acquisitions comprise customer relationships, brands and proprietary technology. Goodwill
principally represents the geographical presence and capabilities of the acquired companies, as well as the assembled workforce and anticipated
synergies. During 2009, the determination of fair value in respect of these acquisitions has been finalised and adjustments have been made to
the balances previously reported. Prior year balances have not been restated as the amount of the adjustment is not significant to the group.
FINANCIAL STATEMENTS