Peachtree 2012 Annual Report Download - page 121

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Overview
Performance
Governance
16 Acquisitions and disposals
16.1 Acquisitions made during the year
Folhamatic Tecnologia em Sistemas S.A.
On 25 June 2012 the Group completed the acquisition of 75% share of the share capital of Folhamatic Tecnologia em Sistemas S.A. (“Folhamatic”) based in
Brazil for cash consideration of £122.6m.
The provisional fair value of the liabilities acquired was £9.2m, resulting in provisional goodwill of £129.6m. In the purchase 75% of the voting rights were
acquired. The non-controlling interest has been measured at the non-controlling interest’s proportionate share of the net liabilities of £2.2m.
The Group has entered into a put and call arrangement to acquire the remaining 25% share in Folhamatic. Under the terms of the agreement the price to be
payable is based on a multiple of expected EBITDA for the year ending 31 December 2014 and is estimated at £71.0m, which is £68.3m after discounting to
present value of the estimated redemption amount. This has been included as a non-current financial liability (note 13.5).
The acquisition of Folhamatic represents an important step in building the Group’s presence in key emerging markets. This acquisition is consistent with the
Group’s strategy and was approved following the Board’s evaluation of the potential return on capital. Folhamatic has a leading market position in a large and
growing economy.
Alchemex (Pty) Ltd
The entire share capital of Alchemex (Pty) Ltd (“Alchemex”) was acquired on 1 October 2011 for cash consideration of £2.8m and deferred consideration of
£2.8m. The fair value of the assets acquired was £1.1m, resulting in goodwill of £4.5m.
Integral Computers Limited
The entire share capital of Integral Computers Limited (“Integral”) was acquired on 6 February 2012 for cash consideration of £11.9m and contingent
consideration of £4.0m. The fair value of the assets acquired was £5.6m, resulting in goodwill of £10.3m.
Other
The entire share capital of TML BVBA Ltd (“TML”) was acquired on 1 March 2012 for cash consideration of £2.6m. The fair value of the assets acquired was
£0.9m, resulting in goodwill of £1.7m.
Cenize Informática Ltda. (“Cenize”) was acquired on 24 August 2012 for cash consideration of £1.0m and contingent consideration of £2.9m. The fair value
of the assets acquired was £nil, resulting in goodwill of £3.9m.
There were no other acquisitions made in the year.
The net identifiable assets (including intangible assets) were recognised at their provisional fair values. The residual excess over the net assets acquired has
been recognised as goodwill. Details of net assets acquired and goodwill are as follows:
Summary of acquisitions £m
Purchase consideration
Cash 140.9
Deferred/contingent consideration 9.7
Total purchase consideration 150.6
Fair value of net identifiable liabilities 1.6
Fair value of net identified liabilities attributable to non-controlling interest (2.2)
Goodwill 150.0
Goodwill represents the fair value of the assembled workforce at the time of acquisition along with potential synergies with the existing Sage business.
Financial statements
119
The Sage Group plc | Annual Report & Accounts 2012