Cogeco 2009 Annual Report Download - page 30

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Management’s discussion and analysis COGECO CABLE INC. 2009 29
Ontario with the broadband capacity required for data networking, HSI access, e-business applications, video conferencing and
other advanced communications.
On June 30, 2008, the Corporation completed the acquisition of all the assets of FibreWired Burlington Hydro Communications,
Burlington Hydro Electric's (City of Burlington’s energy company) telecommunications division for a total consideration of
$12.6 million. FibreWired Burlington Hydro Communications operates a broadband network equipped with next generation ATM and
Ethernet technology and provides Burlington’s organizations with the broadband capacity required for data networking, HSI access,
hosting services, e-business applications, video conferencing and other advanced communications.
On July 31, 2008, the Corporation completed the acquisition of all the shares of Toronto Hydro Telecom Inc., the
telecommunications subsidiary of Toronto Hydro Corporation Inc. (City of Toronto’s energy company) for a total consideration of
$200 million. In addition, the Corporation assumed a working capital deficiency and certain liabilities totalling approximately
$4 million. Toronto Hydro Telecom Inc., which now operates under the name of Cogeco Data Services Inc., offers data
communications and other telecommunications services such as Ethernet, private line, VoIP, HSI access, dark fibre, data storage,
data security and co-location to a wide range of business customers and organizations throughout the Greater Toronto Area.
These acquisitions were accounted for using the purchase method. The results have been consolidated as of the acquisition dates.
The allocation of the purchase price of the acquisitions was as follows:
CDS
(1)
OTHER TOTAL
(in thousands of dollars) $ $ $
CONSIDERATION PAID
PURCHASE PRICE OF SHARES OR ASSETS
200,000 28,113 228,113
ACQUISITION COSTS
1,988 852 2,840
201,988 28,965 230,953
NET ASSETS ACQUIRED
CASH AND CASH EQUIVALENTS
1,230 – 1,230
ACCOUNTS RECEIVABLE
4,575 968 5,543
PREPAID EXPENSES
535 612 1,147
FIXED ASSETS
57,098 19,102 76,200
DEFERRED CHARGES
– 24 24
CUSTOMER RELATIONSHIPS
33,983 4,220 38,203
GOODWILL(2)
112,228 4,662 116,890
FUTURE INCOME TAX ASSETS
2,335 – 2,335
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES ASSUMED
(4,380)
(361)
(4,741)
DEFERRED AND PREPAID REVENUE AND OTHER LIABILITIES ASSUMED
(4,958)
(262)
(5,220)
PENSION PLAN LIABILITIES AND ACCRUED EMPLOYEE BENEFITS
(356)
– (356)
FUTURE INCOME TAX LIABILITIES
(302)
– (302)
201,988 28,965 230,953
(1) THE PURCHASE PRICE ALLOCATION OF CDS ABOVE WAS PRELIMINARY AT AUGUST 31, 2008, AND WAS FINALIZED DURING FISCAL 2009. SEE THE “FISCAL 2009
ADJUSTMENTS RELATED TO A FISCAL 2008 BUSINESS ACQUISITION” SECTION ABOVE FOR FURTHER DETAILS.
(2) APPROXIMATELY $105.3 MILLION OF THE GOODWILL RELATED TO THESE TRANSACTIONS WILL BE DEDUCTIBLE FOR TAX PURPOSES.