Cogeco 2012 Annual Report Download - page 59

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58 COGECO CABLE INC. 2012 Consolidated financial statements
5. BUSINESS COMBINATIONS
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.
The Corporation has completed its allocation of the purchase price of these two acquisitions in the fourth quarter of 2012. The allocation of
the purchase price of these acquisitions is as follows:
2012 2011
(In thousands of Canadian dollars) $ $
Consideration
Paid
Purchase of shares 133,600 133,600
Working capital adjustments (492) (1,034)
133,108 132,566
Balance due on a business acquisition(1) 11,400 11,400
Working capital adjustments payable 1,429 1,429
145,937 145,395
Net assets acquired
Cash and cash equivalents 1,409 1,409
Trade and other receivables 4,720 4,619
Prepaid expenses and other 452 1,036
Property, plant and equipment 27,232 27,195
Other assets 600 615
Customer relationships 34,305 34,305
Goodwill(2) 94,199 92,553
Trade and other payables assumed (3,136) (3,126)
Income tax liabilities assumed (84)
Deferred and prepaid revenue (1,538) (1,538)
Deferred tax liabilities (12,222) (11,673)
145,937 145,395
(1) Bearing interest at bank prime rate plus 1% and payable in February 2013.
(2) There was no amount of goodwill deductible for tax purposes in 2012 and in 2011.
In connection with these acquisitions, the Corporation incurred acquisition-related costs of $2.3 million which have been recognized as
“Integration, restructuring and acquisition costs” in the Corporation’s 2011 consolidated statements of profit or loss.