LensCrafters 2007 Annual Report Download - page 141

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> 140 | ANNUAL REPORT 2007
141 and, accordingly, the total consideration of Euro 46.7 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 resulting in the recognition of intangible assets of approximately Euro 19.6 million and
related deferred tax liabilities for approximately Euro 3.9 million and in the reduction of the
goodwill recognized in 2006 by approximately Euro 15.7 million. The acquisition was made as a
result of the Company’s strategy to continue expansion of its wholesale business in Turkey, in
particular in the prescription frames market.
• In November 2006, the Company completed the acquisition, which was announced in June
2006, of Modern Sight Optics, a leading premium optical chain that operates a total of 28
stores in Shanghai, China. These stores are located in premium and high-end commercial
centers and shopping malls situated primarily in Shanghai’s downtown area and affluent
residential areas. The Company acquired 100% of the equity interest in Modern Sight Optics for
total consideration of RMB 140 million (approximately Euro 14 million). The acquisition was
accounted for in accordance with SFAS 141 and, accordingly, the total consideration of Euro
16.3 million, including direct acquisition-related expenses, has been allocated to the fair market
value of the assets and liabilities of the company as of 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 done in 2006 which resulted in
the recognition of goodwill of Euro 15.9 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 March 2007 the Company announced that it had acquired two prominent specialty sun
chains in South Africa, with a total of 65 stores. The two acquisitions represent an important
step in the expansion of the Company’s sun retail presence worldwide. Luxottica Group’s total
investment in the two transactions was approximately Euro 10 million. The Company used
various methods to calculate the fair value of the assets acquired and liabilities assumed and
all valuations are not yet completed. The excess of the purchase price over net assets acquired
(“goodwill”) has been recorded in the accompanying consolidated balance sheet. The
estimated preliminary goodwill totals Euro 8.3 million.