LensCrafters 2003 Annual Report Download - page 51

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First American Health Concepts, Inc.
During 2001, Luxottica Group acquired all outstanding shares of First American Health Concepts, Inc. (“FAHC”), a
publicly traded company on the American Stock Exchange, for approximately 27.7 million (US$ 23.5 million), net
of cash acquired (3.6 million or US$ 3 million). FAHC markets and administers vision care plans throughout the
U.S.. FAHC tangible assets and liabilities assumed were insignificant individually and in aggregate and, accordingly,
substantially the entire purchase price was allocated to goodwill. No pro-forma financial information is presented,
as the acquisition was not material to the Company’s consolidated financial statements.
OPSM Group Limited
In May 2003, Luxottica Group formed an indirect wholly-owned subsidiary in Australia, Luxottica South Pacific Pty
Limited, for the purpose of making a cash offer for all outstanding shares, options and performance rights of
OPSM Group Limited (“OPSM”), a publicly traded company on the Australian Stock Exchange. The cash offer
commenced on June 16, 2003, has received acceptances which increased Luxottica’s relevant interest in OPSM
shares to 50.68 percent on August 8, 2003, and was completed on September 3, 2003. At the close of the offer,
Luxottica South Pacific held 82.57 percent of OPSM’s ordinary shares. As consequence of the acquisition, all
options and performance rights were cancelled. As a result of Luxottica South Pacific Pty Limited acquiring the
majority of OPSM’s shares on August 8, 2003, OPSM’s financial position and results of operations are
consolidated into the Company’s financial statements as of August 1, 2003. Results of operations for the seven
day period ended August 7, 2003, were immaterial. The acquisition was accounted for in accordance with SFAS
No.141, and accordingly, the purchase price of 253.7 million or Australian Dollar (“A$”) 442.7 million (including
approximately A$ 7.2 million of acquisition-related expenses) was allocated to the assets acquired and liabilities
assumed based on their fair value at the date of the acquisition. This included an independent valuation of the
value of intangibles, including trade names which have been appraised in 141 million (A$ 246 million). The
valuation of OPSM’s acquired assets and assumed liabilities is preliminary and, as a result, the allocation of the
purchase price is subject to modification. Management believes that the valuation will be finalized by June 2004.
The acquisition of OPSM was made as result of the Company’s strategy to expand its retail business in Australia
and New Zealand and become a leading player in the Australian prescription segment.
The purchase price and expenses have been allocated based upon the valuation of the Company’s acquired
assets and liabilities assumed as follows:
Thousands of Euro
Assets purchased:
Cash and cash equivalents 17,023
Inventories 90,034
Property, plant and equipment 113,212
Prepaid expenses and other current assets 14,717
Accounts receivable 2,161
Trade name (useful life of 25 years, no residual value) 340,858
Other assets including deferred tax assets 34,657
Liabilities assumed:
Accounts payable and accrued expenses (101,020)
Other current liabilities (52,200)
Deferred tax liabilities (135,340)
Long-term debt (128,691)
Bank overdraft (104,155)
Fair Value of Net Assets 91,256
Goodwill 466,790
TOTAL PURCHASE PRICE 558,046
Pro-forma consolidated statements of income for the year ended December 31, 2001, assuming the acquisition
took place on January 1, 2001:
Thousands of Euro, except per share data - Unaudited December 31,
2001
Sales 3,211,063
Operating Income 490,998
Net Income 297,851
No. of Shares (Thousands) - Basic 451,037
No. of Shares (Thousands) - Diluted 453,965
Earnings per Share (Euro) - Basic 0.66
Earnings per Share (Euro) - Diluted 0.66