Lexmark 2014 Annual Report Download - page 85

The Short-term borrowings assumed as of the acquisition date were repaid after the acquisition date in the third quarter of 2014. The
outstanding Loans payable to employees issued as part of ReadSoft’s incentive programs were considered a liability assumed by the
Company on the acquisition date. Cash payments to the holders of the loans occurred after the acquisition date in the third quarter of
2014. The payments for both of these liabilities are included in Repayment of assumed debt in the financing section of the Company’s
Consolidated Statements of Cash Flows for the year ended December 31, 2014. The difference between the amounts shown in the
table above and the amount shown on the Company’s Consolidated Statements of Cash Flows is due to foreign currency translation
effects.
The Current portion of long-term debt assumed consists of a loan that was outstanding at the acquisition date and was subsequently
repaid under its contractual terms in the fourth quarter of 2014.
The Company recognized a gain of $1.3 million upon the remeasurement to fair value of its equity interest in ReadSoft held before the
acquisition date. The gain was recognized in Other expense (income), net on the Company’s Consolidated Statements of Earnings for
the year ended December 31, 2014. The Company’s acquisitions of shares through August 19, 2014 committed the Company to
compensate the sellers of those shares by the difference between the consideration paid to the sellers and the highest of: the price at
which the shares were sold, the price of ReadSoft shares in a public takeover offer or the price for which the Company acquired any
further ReadSoft shares before December 31, 2015. Due to the principle of equal treatment of shareholders in public takeover offers,
such compensation was also payable to ReadSoft shareholders who accepted the Company’s offer. Thus, the gain recognized upon the
remeasurement of the Company’s previously held equity interest to fair value was offset by a loss of $1.5 million, also recognized in
Other expense (income), net on the Company’s Consolidated Statements of Earnings for the year ended December 31, 2014. The net
loss recognized also included foreign currency translation effects.
The Company used the market approach to estimate the fair values of its previously held equity interest in ReadSoft as well as the
noncontrolling interest and determined the acquisition date offer price of 57.00 SEK to be the basis for the fair value measurements.
The Company considered the timing of the public announcement of this offer price as well as the market response to the
announcement in making this determination.
The purchase of ReadSoft is included in Purchase of businesses, net of cash acquired in the Consolidated Statements of Cash Flows
for the year ended December 31, 2014 in the amount of $79.3 million. Total cash and cash equivalents acquired in the acquisition of
ReadSoft were $10.8 million.
A change to the acquisition date value of the identifiable net assets during the measurement period (up to one year from the acquisition
date) will affect the amount of the purchase price allocated to goodwill. Changes to the purchase price allocation are adjusted
retrospectively to the acquisition date, if significant.
Acquisition-related costs of approximately $6.5 million were charged directly to operations and were included in Selling, general and
administrative on the Consolidated Statements of Earnings. Acquisition-related costs include finder’s fees, legal, advisory, valuation,
accounting and other fees incurred to effect the business combination. Acquisition-related costs above do not include travel and
integration expenses.
In accordance with Swedish law, the Company requested a compulsory purchase of the outstanding minority shares in ReadSoft, and
anticipates obtaining pre-title to the remaining minority shares in March 2015.
Payments for the shares acquired subsequent to the acquisition date were $154.9 million and are included in Purchase of shares from
noncontrolling interests on the Consolidated Statements of Cash Flows for the year ended December 31, 2014. The noncontrolling
interest as of December 31, 2014 was $4.3 million and is included in Other liabilities on the Company’s Consolidated Statements of
Financial Position.
Because the current levels of revenue and net earnings for ReadSoft are not material to the Company’s Consolidated Statements of
Earnings, supplemental pro forma and actual revenue and net earnings disclosures have been omitted.
Other Acquisitions
On October 14, 2014 the Company acquired the assets of GNAX Healthcare LLC (“GNAX Health”) a subsidiary of GNAX Holdings,
LLC. GNAX Health is a provider of image exchange software technology for exchanging medical content between medical facilities.
2013
On September 16, 2013 the Company acquired Saperion AG (“Saperion”). Saperion is a European-based leader in ECM solutions,
focused on providing document archive and workflow solutions. The acquisition expands Perceptive Software’s European-based
footprint in the ECM market, and will further strengthen the Company’s strategy of providing the platform, products and solutions that
help companies manage their unstructured information challenges.
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