LensCrafters 2007 Annual Report Download - page 140

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NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS | 139 <
• On July 1, 2006, the Company acquired certain assets and assumed certain liabilities from King
Optical Group Inc. consisting of its 74 Canadian optical store chain known as Shoppers Optical
(“SO”). The aggregate consideration paid by the Company to the former owners of SO was
approximately Canadian dollar (“CDN$”) 68.8 million (Euro 48.3 million) in cash. In connection
with the acquisition, the Company assumed no indebtedness. The purchase price of CDN$
69.3 million (Euro 48.7 million), including approximately CDN$ 0.1 million (Euro 0.4 million) of
direct acquisition-related expenses, was allocated to the assets acquired and liabilities
assumed based on their fair value at the date of the acquisition. All valuations of net assets
including but not limited to fixed assets and inventory have been completed during 2007
resulting in no material differences from the purchase price allocation done in 2006. The
acquisition was made as a result of the Company’s strategy to continue expansion of its retail
business in Canada.
• In July 2005, the Company announced that SPV Zeta S.r.l., a new wholly owned Italian
subsidiary, would acquire 100% of the equity interest in Beijing Xueliang Optical Technology Co.
Ltd. (“Xueliang Optical”) for a purchase price of Chinese Renminbi (“RMB”) 169 million
(approximately Euro 17 million), plus RMB 40 million (approximately Euro 4 million) in assumed
liabilities. Xueliang Optical has 79 stores in Beijing. The transaction was completed in April 2006
after the customary approvals by the relevant Chinese governmental authorities. The acquisition
was accounted for in accordance with SFAS 141 and, accordingly, the total consideration of
Euro 22.6 million has been allocated to the fair market value of the assets and liabilities of the
company at the acquisition date. All valuations of net assets including but not limited to fixed
assets and inventory have been completed during 2007 with no material differences from the
purchase price allocation performed in 2006, which resulted in the recognition of goodwill of
Euro 21.3 million as of the date of acquisition. The acquisition was made as a result of the
Company’s strategy to enter the retail business in The People’s Republic of China.
• In October 2005, the Company announced that its new wholly owned Italian subsidiary, SPV Eta
S.r.l., would acquire 100% of the equity interests in Ming Long Optical, the largest premium
optical chain in the province of Guangdong, China, for a purchase price of RMB 290 million
(approximately Euro 29 million). In July 2006 the Company completed the transaction after
receiving the customary approvals by the relevant Chinese governmental authorities. Ming Long
Optical operates a total of 278 locations in two of the top premium optical markets in mainland
China, as well as in Hong Kong. The acquisition was accounted for in accordance with SFAS
141 and, accordingly, the total consideration of Euro 30.3 million has been allocated to the fair
market value of the assets and liabilities of the company at the acquisition date. All valuations of
net assets including but not limited to fixed assets and inventory have been completed during
2007 with no material differences from the purchase price allocation performed in 2006, which
resulted in the recognition of goodwill of Euro 15.8 million as of the date of acquisition. The
acquisition was made as a result of the Company’s strategy to continue expansion of its retail
business in The People’s Republic of China.
• In May 2006, the Company completed the purchase of the remaining 49% stake of the Turkish-
based distributor Luxottica Gozluk Ticaret A.S. (“Luxottica Turchia”) for an amount of Euro 15
million. Goodwill of Euro 7.0 million representing the excess of the net assets acquired has
been recorded in the accompanying Consolidated Balance Sheets. In November 2006
Standard Gozluk Industri Ve Tircaret A.S. (“Standard”), a Turkish wholesaler fully owned by the
former minority shareholders of Luxottica Turchia, merged with Luxottica Turchia. As a result of
the merger the former shareholders of Standard received a minority stake of Luxottica Turchia of
35.16% and a put option to sell the shares to the Company, while the Company was granted a
call option on the minority stake. The acquisition was accounted for in accordance with SFAS