Cogeco 2011 Annual Report Download - page 61

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60 COGECO CABLE INC. 2011 Consolidated financial statements
2. Business acquisitions
On June 27, 2011, the Corporation concluded an agreement to acquire all of the shares of Quiettouch Inc. (“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, including managed infrastructure and hosting, virtualization, firewall services,
data backup with end-to-end monitoring and reporting, and enhanced and traditional collocation services. Quiettouch operates three data
centers in Toronto and Vancouver, as well as a fiber network within key business areas of downtown Toronto. The transaction was completed
August 2, 2011.
On August 31, 2011, the Corporation concluded and completed an agreement to acquire all of the shares of MTO Telecom Inc. (“MTO”), the
largest private telecommunications provider in the Greater Montreal Area and the Province of Quebec. MTO 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 date. 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.