LensCrafters 2013 Annual Report Download - page 118

4. BUSINESS COMBINATIONS
On January 23, 2013, the Company completed the acquisition of Alain Mikli International, a French luxury
and contemporary eyewear company. The consideration for the acquisition was Euro 85.2 million. The purchase price
paid in 2013, including the assumption of approximately Euro 15.0 million of Alain Mikli’s net debt, totaled
Euro 91.0 million, excluding advance payments made in 2012 and receivables from Alain Mikli. Net sales generated by
Alain Mikli International in 2012 were approximately Euro 55.5 million. The acquisition furthers the Group’s strategy
of continually strengthening of its brand portfolio.
The valuation process to calculate the fair value of the acquired Alain Mikli net assets was concluded as of the
date these financial statements were authorized for issue.
The difference between the consideration paid and the net assets acquired was recorded as goodwill and
intangible assets of Euro 58.7 million and Euro 33.5 million, respectively. The goodwill is not tax deductible and
primarily reflects the synergies that the Group estimates it will derive from the acquisition.
The following table summarizes the consideration paid, the fair value of assets acquired and liabilities assumed
at the acquisition date (in thousands of Euro):
Consideration 85,179
Cash and cash equivalents acquired (3,771)
Debt acquired 18,304
Total consideration 99,712
Recognized amount of net identifiable assets
Accounts receivable—net 9,975
Inventory 11,397
Other current receivables 4,156
Fixed assets 3,470
Trademarks and other intangible assets 33,800
Investments 113
Other long term receivables 6,642
Accounts payable (10,708)
Other current liabilities (5,590)
Income tax payable (231)
Deferred tax liabilities (9,014)
Other long-term liabilities (2,996)
Total net identifiable assets 41,012
Goodwill 58,700
Total 99,712
Transaction - related costs of approximately Euro 1.2 million were expensed as incurred.
On April 25, 2013, Sunglass Hut Mexico (“SGH Mexico”), a subsidiary of the Company, acquired the sun
business of Grupo Devlyn S.A.P.I. de C.V. (“Devlyn”). As a result of the acquisition the shareholders of Devlyn
received a minority stake in SGH Mexico of 20 percent and a put option to sell the shares to the Company, while the
Company was granted a call option on the minority stake. The exercise price of the options was estimated based on the
expected EBITDA, net sales and net financial position at the end of the lock-up period identified in the contract. The
acquisition of the Company’s interest in Devlyn was accounted for as a business combination in accordance with
IFRS 3. In particular, the Group recorded provisional goodwill of approximately Euro 6.0 million and a liability for the
present value of the put option of approximately Euro 9.5 million. The valuation of the net assets acquired will be
completed within the twelve-month period subsequent to the acquisition. The transaction furthers the Group’s strategy
of increasing its presence in Latin America.