BT 2008 Annual Report Download - page 125

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124 BT Group plc Annual Report & Form 20-F
28. Acquisitions continued
BT Retail
During the year, the group has acquired a number of smaller subsidiary undertakings that now form part of BT Retail. These
acquisitions include principally, Lynx Technology Holdings Limited, Basilica Group Limited and Brightview plc. The total purchase
consideration paid for these subsidiaries was £71 million, including £8 million deferred, contingent consideration. The group
acquired 100% of each company. The combined net assets acquired in these transactions and the goodwill arising is as follows:
Book
value
Fair value
adjustments Fair value
£m £m £m
.....................................................................................................................................................................................................................................
Intangible assets –2323
Property, plant and equipment 4–4
Receivables 22 (1) 21
Cash and cash equivalents 3–3
Payables (25) (2) (27)
Net assets acquired 42024
Goodwill 47
Total consideration 71
Intangible assets recognised in respect of these acquisitions comprise customer relationships and brand names. Goodwill arising on
these acquisitions principally relates to anticipated cost and revenue synergies and the assembled workforce. The fair value
adjustments in respect of these acquisitions were provisional at 31 March 2008 and will be finalised in 2009.
From the date of acquisition, these acquisitions have contributed revenue of £89 million and a net loss of £1 million to the
group’s results. If the acquisitions has occurred on 1 April 2007, the group’s revenue would have been higher by £63 million and
profit for the year would have been higher by £1 million.
Year ended 31 March 2007
BT Global Services
International Network Services
On 25 February 2007, BT acquired 100% of the issued share capital of International Network Services Inc (INS) for a total
consideration of £133 million. At 31 March 2007, the fair value of INS’ net assets were determined on a provisional basis. During
2008 the determination of fair value has been finalised and adjustments have been made to the balances previously reported. Prior
year balances have not been restated as the amount of the adjustment is not significant to the group. The net assets acquired in the
transaction and the goodwill arising were as follows:
Book value
Fair value
adjustments Fair value
£m £m £m
.....................................................................................................................................................................................................................................
Intangible assets 32427
Property, plant and equipment 1–1
Receivables 18 – 18
Cash and cash equivalents 2–2
Payables (12) – (12)
Net assets acquired 12 24 36
Goodwill 97
Total consideration 133
Intangible assets recognised in respect of the acquisition of INS are customer relationships and proprietary software and technology.
Goodwill comprises principally anticipated synergies and cost savings, and the assembled workforce, together with anticipated
benefits to the group of INS’ internal processes and procedures.
Consolidated financial statements Notes to the consolidated financial statements