Vistaprint 2014 Annual Report Download - page 72

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7. Property, Plant and Equipment, Net
Property, plant and equipment, net consists of the following:
June 30,
Estimated useful lives 2014 2013
Land improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 years $ 2,382 $ 2,188
Building and building improvements . . . . . . . . . . . . . . . . . 10 - 30 years 162,775 133,822
Machinery and production equipment . . . . . . . . . . . . . . . . 4 - 10 years 229,927 189,061
Machinery and production equipment under capital lease 4 - 10 years 13,513 —
Computer software and equipment . . . . . . . . . . . . . . . . . . 3 - 5 years 112,815 91,766
Furniture, fixtures and office equipment . . . . . . . . . . . . . . 5 - 7 years 21,780 19,832
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . Shorter of lease term or
expected life of the asset
28,327 15,624
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . 41,510 34,331
613,029 486,624
Less accumulated depreciation, inclusive of assets under
capital lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (293,145) (232,893)
319,884 253,731
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,337 26,291
Property, plant, and equipment, net. . . . . . . . . . . . . . . . . . $ 352,221 $ 280,022
Depreciation expense, inclusive of assets under capital leases, totaled $54,060, $50,602 and $46,572 for
the years ended June 30, 2014, 2013 and 2012, respectively.
8. Business Combinations
Acquisition of People & Print Group B.V.
On April 1, 2014, we acquired 100% of the outstanding shares of People & Print Group B.V., an online
Dutch printing company focused primarily on the Dutch and Belgian markets. At the closing, we paid €20,545
($28,300 based on the exchange rate as of the date of acquisition) in cash, subject to working capital and other
adjustments, and an additional €4,000 ($5,509 based on the exchange rate as of the date of acquisition), is payable
in Vistaprint shares in January 2016 subject to warranties and claims made by the seller. In addition to the initial
purchase consideration, we have agreed to a sliding scale earn-out that is based on calendar year 2015 revenue
and EBITDA targets. The earn-out amount is theoretically unlimited and could be significant in relation to the base
purchase price. The estimated acquisition date fair value of the earn-out payment of $9,053 was included as a
component of the purchase price based on an evaluation of the likelihood of achievement of the contractual
conditions and weighted probability assumptions of these outcomes. We utilized proceeds from our credit facility to
finance the acquisition. In connection with the acquisition, we incurred transaction costs related to investment
banking, legal, financial, and other professional services of approximately $1,160 in the year ended June 30, 2014,
which were recorded in general and administrative expenses.
Our consolidated financial statements include the accounts of People & Print Group and its subsidiaries
from April 1, 2014, the date of acquisition. People & Print Group’s revenue included in our consolidated revenues
for the year ended June 30, 2014 was $16,381. People & Print Group's net income included in our consolidated net
income attributable to Vistaprint N.V. for the year ended June 30, 2014 was $833, inclusive of amortization of
identifiable intangible assets.
The table below details the consideration transferred to acquire People & Print Group:
Cash paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 28,300
Deferred consideration payable in Vistaprint N.V. shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,509
Fair value of contingent consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,053
Total consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 42,862