Virgin Media 2006 Annual Report Download - page 158

VIRGIN MEDIA INVESTMENT HOLDINGS LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. Acquisitions
Acquisition of Virgin Mobile
On July 4, 2006, Virgin Media and VMIH acquired 100% of the outstanding shares and options of Virgin Mobile Holdings (UK)
plc (“Virgin Mobile”) through a U.K. Scheme of Arrangement. Virgin Mobile is the largest mobile virtual network operator in the
United Kingdom, with approximately 4.5 million customers.
The total purchase price of £952.2 million included cash of £418.2 million, common stock valued at £518.8 million and estimated
direct transaction costs of £15.2 million. The average market price per share of common stock utilized in determining the value of new
common stock issued of £15.07 ($26.59) is based on an average of the closing prices of Virgin Media common stock divided by the
Telewest acquisition conversion ratio of 2.5 times for a range of trading days (January 12, January 13, January 17, January 18,
January 19) around the announcement date of the proposed acquisition (January 16, 2006).
Virgin Media financed the cash portion of the offer and transactional expenses through £475 million of additional borrowings
under its senior credit facility and cash on hand.
The total purchase price of £952.2 million has been allocated as follows (in millions):
Acquisition
Date
Cash and cash equivalents, including restricted cash £ 14.1
Accounts receivable 45.4
Prepaid expenses and other current assets 5.3
Fixed assets 9.2
Inventory 9.1
Amortizable intangible assets:
Customer lists 280.0
Contractual relationships 6.0
Software and other intangible assets 9.3
Intangible assets with indefinite lives:
Goodwill 970.3
Other assets, net 1.4
Accounts payable (47.2)
Long term debt, including current portion (200.0)
Other current liabilities (103.2)
Other long term liabilities (47.5)
Total purchase price £ 952.2
The allocation of the purchase price to assets acquired and liabilities assumed is preliminary, pending finalization of valuations
performed by third party experts, completion of analysis of deferred tax balances and completion of a review of certain other historical
matters.
Amortizable intangible assets
Of the total purchase price, £295.3 million has been allocated to amortizable intangible assets including customer lists and
contractual relationships. Customer lists represent existing contracts that
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Source: VIRGIN MEDIA INVESTM, 10−K, March 01, 2007