Cogeco 2011 Annual Report Download - page 33

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32 COGECO CABLE INC. 2011 Management’s Discussion and Analysis (MD&A)
Investing activities
Business acquisitions in fiscal 2011
On June 27, 2011, Cogeco Cable concluded an agreement to acquire all of the shares of Quiettouch, a leading independent provider of
outsourced managed information technology and infrastructure services to mid-market and larger enterprises in Canada. Quiettouch offers a
full suite of differentiated services that allow customers to outsource their mission-critical information technology infrastructure and application
requirements, including managed infrastructure and hosting, virtualization, firewall services, data backup with end-to-end monitoring and
reporting, and enhanced and traditional co-location services. Quiettouch operates three data centres in Toronto and Vancouver, as well as a
fibre network within key business areas of downtown Toronto. The transaction was completed on August 2, 2011.
On August 31, 2011, Cogeco Cable concluded and completed an agreement to acquire all the shares of MTO. With over 1,500 kilometres of
network, MTO, the largest private telecommunications provider in the Greater Montréal Area and the Province of Québec, offers high-
performance Ethernet broadband connectivity services to carrier, enterprise and public sector customers.
These acquisitions were accounted for using the purchase method. The results have been consolidated as of the acquisition dates. The
preliminary allocation of the purchase price of these acquisitions, pending the completion of the valuation of the net assets acquired, is as
follows:
(In thousands of dollars) $
Consideration
Paid
Purchase of shares 133,600
Preliminary working capital adjustment (1,034)
Acquisition costs 1,111
133,677
Balance due on a business acquisition(1) 11,400
Preliminary working capital adjustment payable 1,429
A
cquisition costs payable 713
147,219
Net assets acquired
Cash and cash equivalents 1,409
A
ccounts receivable 4,619
Prepaid expenses and other 1,036
Fixed assets 27,195
Deferred charges 615
Customer relationships 34,305
Goodwill 94,743
A
ccounts payable and accrued liabilities assumed (3,626)
Deferred and prepaid revenue (1,538)
Long-term future income tax liabilities (11,539)
147,219
(1) Bearing interest at bank prime rate plus 1% and payable in February 2013.