Rogers 2010 Annual Report Download - page 88

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
92 ROGERS COMMUNICATIONS INC. 2010 ANNUAL REPORT
(A) 2010 ACQUISITIONS:
(i) Blink Communications Inc.:
On January 29, 2010, the Company closed an agreement to
purchase 100% of the outstanding common shares of Blink
Communications Inc. (“Blink”), a wholly-owned subsidiary of
Oakville Hydro Corporation, for cash consideration of $131 million.
Blink is a facilities-based, data network service provider that
delivers next generation and leading edge services, to small and
medium sized businesses, including municipalities, universities,
schools and hospitals, in the Oakville, Milton and Mississauga,
Ontario areas. The acquisition was accounted for using the
acquisition method in accordance with CICA 1582 with the results
of operations consolidated with those of the Company effective
January 29, 2010 and has contributed incremental revenue of $20
million and operating income of $11 million for the year ended
December 31, 2010. The transaction costs related to the acquisition
amounted to approximately $1 million and have been charged to
integration and restructuring expenses.
The fair values of the assets acquired and liabilities assumed, which
were finalized during 2010, are as follows:
Purchase price $ 131
Current assets $ 3
PP&E 35
Customer relationships 40
Current liabilities (2)
Future income tax liabilities (11)
Fair value of net identifiable assets acquired $ 65
Goodwill $ 66
The goodwill has been allocated to the RBS reporting segment and
is not tax deductible.
The customer relationships are being amortized over a period of
5 years.
(ii) Cityfone Telecommunications Inc.:
On July 9, 2010, the Company closed an agreement to acquire the
assets of Cityfone Telecommunications Inc. (“Cityfone”) for cash
consideration of $26 million. Cityfone is a Canadian Mobile Virtual
Network Operator and offers postpaid wireless voice and data
services to subscribers through private label programs with major
Canadian brands. The acquisition was accounted for using the
acquisition method in accordance with CICA 1582 with the results
of operations consolidated with those of the Company effective
July 9, 2010 and has contributed incremental revenue of $3 million
and an operating loss of $1 million for the year ended
December31,2010.
The fair values of the assets acquired and liabilities assumed, which
were finalized during 2010, are as follows:
Purchase price $ 26
Current assets $ 3
PP&E 1
Customer relationships 17
Current liabilities (1)
Fair value of net identifiable assets acquired $ 20
Goodwill $ 6
The goodwill has been allocated to the Wireless reporting segment and
is tax deductible.
The customer relationships are being amortized over a period of
5 years.
(iii) Kincardine Cable T.V. Ltd.:
On July 30, 2010, the Company closed an agreement to acquire the
assets of Kincardine Cable T.V. Ltd. (“Kincardine”) for cash
consideration of $20 million. Kincardine provides cable television
and Internet services in Kincardine, Ontario and the surrounding
area. The acquisition was accounted for using the acquisition
method in accordance with CICA 1582 with the results of
operations consolidated with those of the Company effective
July 30, 2010 and has contributed incremental revenue of
$2 million and operating income of $1 million for the year ended
December31,2010.
The fair values of the assets acquired and liabilities assumed, which
were finalized during 2010, are as follows:
Purchase price $ 20
PP&E $ 2
Customer relationships 9
Current liabilities (1)
Fair value of net identifiable assets acquired $ 10
Goodwill $ 10
The goodwill has been allocated to the Cable Operations reporting
segment and is tax deductible.
The customer relationships are being amortized over a period of
3 years.
(iv) BV! Media Inc.:
On October 1, 2010, the Company closed an agreement to purchase
100% of the outstanding common shares of BV! Media Inc. (“BV!
Media”) for cash consideration of $24 million. BV! Media is a
Canadian internet advertising network and publisher of news and
information portals. The acquisition was accounted for using the
acquisition method in accordance with CICA 1582 with the results
of operations consolidated with those of the Company effective
October 1, 2010 and has contributed incremental revenue of $5
million and operating income of $1 million for the year ended
December 31, 2010. The transaction costs related to the acquisition
amounted to approximately $1 million and have been charged to
integration and restructuring expenses. The fair values assigned
are preliminary pending finalization of the valuation of certain net
identifiable assets acquired. The Company expects to finalize the
valuation of the PP&E and identifiable intangible assets acquired
during the 2011 fiscal year.
The preliminary estimated fair values of the assets acquired and
liabilities assumed in the acquisition are as follows:
Purchase price $ 24
Current assets $ 5
PP&E 4
Customer relationships 6
Current liabilities (3)
Future income tax liabilities (3)
Preliminary fair value of net identifiable assets acquired $ 9
Goodwill $ 15
4. BUSINESS COMBINATIONS: