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Consolidated financial statements COGECO CABLE INC. 2013 69
The acquisitions were accounted for using the purchase method. The preliminary allocation of the purchase price of PEER 1 and Atlantic
Broadband are as follows:
As previously presented At August 31, 2013
Atlantic
Broadband PEER 1 Atlantic
Broadband PEER 1 TOTAL
Preliminary Preliminary Preliminary Preliminary
(In thousands of Canadian dollars) $ $ $ $ $
Consideration
Paid
Purchase of shares 337,779 494,796 337,779 494,796 832,575
Working capital adjustments 5,415 —5,415 — 5,415
Repayment of secured debts and settlement of options outstanding 1,021,854 170,872 1,021,854 170,872 1,192,726
1,365,048 665,668 1,365,048 665,668 2,030,716
Net assets acquired
Cash and cash equivalents 5,480 10,840 5,480 10,840 16,320
Restricted cash — 8,729 —8,729 8,729
Trade and other receivables 9,569 12,772 12,012 12,772 24,784
Prepaid expenses and other 1,370 3,855 1,370 3,855 5,225
Income tax receivable 3,418 672 3,907 2,160 6,067
Other assets — 3,328 —2,462 2,462
Property, plant and equipment 205,353 150,206 302,211 150,013 452,224
Intangible assets (note 13 A)) 763,084 139,703 711,418 144,671 856,089
Goodwill 603,254 421,986 522,215 412,347 934,562
Deferred tax assets 33,835 8,355 98,592 4,727 103,319
Trade and other payables assumed (26,134) (26,330) (27,620) (26,512) (54,132)
Provisions (721) — (721) — (721)
Income tax liabilities assumed (53) (4,716)— — —
Deferred and prepaid revenue and other liabilities assumed (5,254)(3,315)(7,697) (3,388) (11,085)
Long-term debt assumed — (1,735)—(1,735)(1,735)
Deferred tax liabilities (228,153) (58,682) (256,119) (55,273) (311,392)
1,365,048 665,668 1,365,048 665,668 2,030,716
Atlantic Broadband
The amount of goodwill, $14.0 million of which is expected to be deductible for tax purposes, is mainly attributable to revenue and operating
income before depreciation and amortization growth, future market development related to the entry of the Corporation in the american market,
expected benefits from the corporate tax structure and from the future utilization of tax losses carryforward and to the strength of Atlantic
Broadband's assembled workforce.
In connection with this acquisition, the Corporation incurred acquisition-related costs of $11 million of which $9.3 million have been recognized
in the current year as “Integration, restructuring and acquisition costs” in the Corporation’s consolidated statements of profit or loss.
PEER 1
The amount of goodwill, none of which is expected to be deductible for tax purposes, is mainly attributable to revenue and operating income
before depreciation and amortization growth in the Enterprise services segment, future development of service suite for businesses across
the Canadian, United States and European markets to the expected benefits from the corporate tax structure and to the strength of PEER 1's
assembled workforce.
In connection with this acquisition, the Corporation incurred acquisition-related costs of $6.7 million which have been recognized in the current
year as “Integration, restructuring and acquisition costs” in the Corporation's consolidated statements of profit or loss.
Impact of acquisitions on the results of Cogeco Cable Inc.
Revenue and profit for the year include revenue of $267.7 million and profit for the year of $12.3 million attributable to the additional operations
generated by the acquisition of Atlantic Broadband and revenue of $104.7 million and loss for the year of $13.3 million attributable to the
additional operations generated by the acquisition of PEER 1.
Had the business combinations been effective at September 1, 2012, the consolidated revenue of the Corporation would have been $1.9
billion, and the profit for the year would have been $187 million for the year ended August 31, 2013. Management considers these “pro-forma”
numbers to represent an approximate measure of the performance of the combined group and to provide a reference point for comparison
in future periods. In determining these amounts, management has assumed that the fair value adjustments, determined provisionally, that
arose on the acquisition dates would have been the same, in all material respects, if the acquisitions had occurred on September 1, 2012.