BT 2009 Annual Report Download - page 121

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ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS – NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
119BT GROUP PLC ANNUAL REPORT & FORM 20-F
FINANCIAL STATEMENTS
28. Acquisitions continued
BT Retail
During the year, the group acquired 100% of the issued share capital of Wire One Holdings Inc (Wire One, acquired 31 May 2008) and
Ufindus Ltd (Ufindus, acquired 9 July 2008) for a total consideration of £98m. These acquisitions now form part of the Enterprises cash
generating unit. The combined net assets acquired in these transactions and the goodwill arising is as follows:
Fair value
Book value adjustments Fair value
£m £m £m
Intangible assets 22123
Property, plant and equipment 2–2
Receivables 20 (1) 19
Cash and cash equivalents 3–3
Payables (22) (1) (23)
Net assets acquired 51924
Goodwill 74
Total consideration 98
Intangible assets recognised in respect of these acquisitions comprise customer relationships, brand names and proprietary technology.
Goodwill arising on these acquisitions principally relates to anticipated cost and revenue synergies and the assembled workforce.
From the date of acquisition, these acquisitions have contributed revenue of £86m and a net profit of £10m to the group’s results. If the
acquisitions had occurred on 1 April 2008, the group’s revenue would have been higher by £15m and profit for the year would have been
higher by £1m.
Other
During the year, the group acquired 100% of the issued share capital of Moorhouse Consulting (Moorhouse, acquired 11 August 2008)
and Ribbit Corporation (Ribbit, acquired 29 July 2008), for a total consideration of £75m including £10m of deferred, contingent
consideration. These acquisitions now form part of BT Design, which is reported within ‘Other’. For the purposes of the goodwill
impairment test the goodwill arising on these acquisitions has been assigned to the cash generating units expected to benefit from the
synergies of the acquisitions. The combined net assets acquired in these transactions and the goodwill arising is as follows:
Fair value
Book value adjustments Fair value
£m £m £m
Intangible assets –2525
Receivables 2–2
Cash and cash equivalents 5–5
Payables (4) – (4)
Net assets acquired 32528
Goodwill 47
Total consideration 75
Intangible assets recognised in respect of these acquisitions comprise internally developed technology. The fair value adjustments relating
to the acquisition of Ribbit were provisional at 31 March 2009 and will be finalised during the 2010 financial year. Goodwill arising on
these acquisitions principally relates to cost savings and other synergies expected to be delivered post acquisition.
From the date of acquisition, these acquisitions have contributed revenue of £7m and net loss of £7m to the group’s results. If the
acquisitions had occurred on 1 April 2008, the group’s revenue would have been higher by £3m and profit for the year would have been
lower by £1m.