LensCrafters 2005 Annual Report Download - page 121
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> 120 | ANNUAL REPORT 2005
The purchase price (including acquisition-related expenses) has been allocated based upon the fair
value of the Company’s acquired assets and liabilities assumed as follows:
In thousands of Euro Assets purchased
Cash and cash equivalents 60,762
Inventories 95,601
Accounts receivable 45,446
Prepaid expenses and other current assets 12,456
Property and equipment 109,174
Trade names (useful lives of 25 years, no residual value) 72,909
Distributor network (useful life of 23 years, no residual value) 98,322
Customer list and contracts (useful life of 21-23 years, no residual value) 68,385
Franchise agreements (useful life of 20 years, no residual value) 18,413
Other intangibles 17,214
Asset held for sale - Pearle Europe 143,617
Deferred tax assets 74,949
Other assets 11,252
In thousands of Euro Liabilities assumed
Accounts payable (49,190)
Accrued expenses and other current liabilities (164,205)
Deferred tax liabilities (94,910)
Long-term debt (253,284)
Bank overdraft (22,668)
Other non current liabilities (78,425)
Fair value of net assets 165,818
Goodwill 257,922
Total purchase price 423,740
As part of the acquisition of Cole, the Company acquired approximately 21% of the outstanding shares
of Pearle Europe B.V. (“PE”). A change of control provision included in the Articles of Association of PE
required Cole to make an offer to sell these shares to the shareholders of PE within 30 days of the
change of control, which deadline was extended by agreement of the parties. In December 2004,
substantially all the terms of the sale were established at a final cash selling price of Euro 144.0 million,
subject to customary closing conditions. The sale transaction closed in January 2005. As the asset is
denominated in Euro, which is not the functional currency of the subsidiary that held the investment, the
Company has recorded an unrealized foreign exchange gain of approximately Euro 13.4 million (US$
18.4 million) as of December 31, 2004, relating to the changes in the US$/Euro exchange rate between
October 4, 2004 (the date of acquisition) and December 31, 2004.