ManpowerGroup 2004 Annual Report Download - page 71

MANPOWER INC. 2004 Annual Report69
evaluate the effect of the Jobs Act on its plan for reinvestment or repatriation of foreign earnings for purposes of applying
SFAS 109. Based on our analysis to date, we are not yet in a position to decide on whether, or to what extent, we
might repatriate foreign earnings under the provision of the Jobs Act. However, we expect to be in a position to finalize
our assessment by June 2005.
02.
ACQUISITIONS OF BUSINESSES
From time to time, we acquire and invest in companies throughout the world, including U.S. franchises. The total cash
consideration for acquisitions was $117.3, $6.7, and $33.5 in 2004, 2003 and 2002, respectively. The 2004 amount
includes acquisition-related costs and the $123.8 repayment of RMC’s long-term debt that we were required to make
due to change of control provisions contained in the agreements. We financed the acquisition-related costs and this
repayment with excess cash and borrowings under our Receivables Facility, which was repaid in 2004. Cash acquired
of approximately $39.5 offsets these payments.
Right Acquisition
On January 22, 2004, we completed our exchange offer to acquire RMC, the world’s largest career transition and
organizational consulting services firm, operating through over 300 offices in 35 countries. The results of RMC’s
operations are included in our consolidated financial statements since that date. The acquisition of RMC expands the
range of services that we offer to customers as a strategic partner throughout every stage of the employment cycle.
We have merged our Empower operations into RMC, and the results of the combined entity are reported as the
Right segment.
Substantially all of RMC’s outstanding shares were tendered and exchanged at a rate of 0.3874 of a share of our common
stock and cash was paid for fractional shares. The remaining outstanding shares were converted into the right to acquire
our common stock at the same exchange rate.
The purchase price comprised of the following items:
Fair value of our common stock issued $ 428.4
Fair value of RMC stock options assumed 59.5
Long-term debt repaid upon change of control 123.8
Severance and additional SERP liabilities, net of deferred tax assets 6.0
Acquisition-related costs, net of deferred tax assets 11.5
Other 1.4
Total purchase price $ 630.6
We issued 8,852,000 shares of our common stock in the exchange. The value of these shares was calculated based
on an average share price over a two-day period prior to the completion of the transaction.
We assumed both of RMC’s stock option plans, converting outstanding options to purchase shares of RMC common
stock into options to purchase 1,962,000 shares of our common stock. The fair value of these options was based on
an independent valuation using the Black-Scholes option-pricing model.
We were required to repay certain of RMC’s long-term debt due to change of control provisions contained in these
agreements. We financed this repayment with excess cash and borrowings under our Receivables Facility which were
subsequently repaid.
The purchase price also includes amounts paid or accrued for a severance agreement and the liability resulting from
the accelerated vesting of RMC’s Supplemental Executive Retirement Plan (“SERP”). The liability resulting from the
accelerated vesting of the SERP was based on an independent valuation. Deferred tax assets of $3.8 were recorded
related to these items.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
in millions, except share and per share data