Addnode Group Annual Report 2015 | Page 66

ANNUAL REPORT Notes

The acquired companies are knowledge companies , and goodwill is therefore attributable to the worked-up expertise of the staff and the employees ’ collective knowledge about the respective software and IT systems , as well as synergy effects to a certain extent . The fair value of issued shares has been based on the closing quoted price paid for Addnode Group ’ s Class B shares on Nasdaq Stockholm on 1 July 2015 . The issue costs of SEK 0.1 m reduced the contributed capital . Calculation of the fair value of the transferred treasury shares was based on the closing quoted price paid for Addnode Group ’ s Class B shares on Nasdaq Stockholm on the respective transfer dates .

The fair value of the identifiable assets and liabilities included in the acquisition was as follows :

Transcat

Other acquisitions

Total acquisitions in 2015

Identifiable net assets 867 126 993

1 )

Contractual gross amounts correspond , in all material respects , to the above-stated fair values of the acquired receivables .

On 1 July 2015 an agreement was signed to acquire all of the shares in the German company Transcat GmbH , with possession taking place the same day . The company ’ s operations are conducted primarily in Germany , as well as in Austria and Slovakia via subsidiaries . The acquired operations had net sales in 2014 of approximately SEK 450 m and EBITA of approximately SEK 23 m . The companies have approximately 200 employees , based on full-time equivalents . Transcat is one of Europe ’ s leading providers of IT solutions for product information ( PLM solutions ) based on Dassault Systèmes ’ brands , complemented by a portfolio of proprietary products . In addition , Transcat offers consulting services , advice on project design , training and user support .

Addnode Group ’ s Product Lifecycle Management business area , prior to this acquisition , was already the largest provider of customised PLM systems in the Nordic region and one of the largest in Europe . The business area ’ s operations are conducted primarily via the subsidiary Technia . Transcat has been included in the business area since the date of possession and complements Technia both strategically and operationally . The acquisition is in line with Addnode Group ’ s strategy to be a leading European supplier of design and PLM products and related services . The combined TechniaTranscat will be a market leader in the European PLM market . The acquisition gives Addnode Group expanded expertise and synergy opportunities , and marks the Group ’ s establishment of operations in Germany .

The purchase price paid on the date of possession consisted of cash payment of SEK 55.4 m , which was financed through existing credit facilities , vendor loan notes extended by Addnode Group corresponding to SEK 10.2 m , and newly issued Class B shares in Addnode Group worth SEK 42.4 m . The new issue and transfer of Class B shares were carried out with the support of the authorisation granted by the Annual General Meeting on 6 May 2015 . During the fourth quarter of 2015 , SEK 16.0 m was paid out in cash to the sellers as settlement for the actual level of net cash and working capital in Transcat on the date of acquisition . Depending on the actual outcome of the acquired companies ’ earnings

66 during the period 2015 – 2016 , a contingent cash earn-out payment within the interval of zero up to a maximum undiscounted amount of EUR 5 m ( corresponding to approximately SEK 46 m ) may be paid . According to the purchase price allocation , the identified acquisitionrelated intangible assets amount to SEK 36 m , which gives rise to a deferred tax liability of SEK 11 m . Goodwill amounts to SEK 170 m , and the provision for contingent consideration amounts to a maximum sum of approximately SEK 46 m , which is recognised on the consolidated balance sheet as at 31 December 2015 . Other acquired assets and liabilities pertain primarily to trade receivables , prepaid expenses , cash and cash equivalents , and deferred income .

In 2015 the acquisition contributed net sales of approximately SEK 264 m to the Group and had a positive impact of approximately SEK 14 m on consolidated profit after tax . If the acquisition had been carried out on 1 January 2015 , consolidated net sales for 2015 would have amounted to approximately SEK 2,128 m , and profit after tax would have been approximately SEK 98 m . Costs of SEK 3.3 m for carrying out the acquisition are included in the Group ’ s other external costs for 2015 .

Symetri Ltd ( asset transfer acquisition )

CASH FLOW FROM ACQUISITIONS OF SUBSIDIARIES AND OPERATIONS

IT solutions including software for design and construction 2 June 2014

On 1 April 2014 an agreement was signed to acquire the UK operation Symetri through an asset-transfer acquisition . The acquisition was contingent upon the transfer of certain rental contracts and customerrelated contracts . After fulfilment of these conditions , possession of the operations was transferred on 2 June 2014 . The operation focuses on IT solutions including software for design and engineering along with associated consulting and training services . Symetri is the largest Autodesk distributor to the manufacturing , oil and gas industries in the UK . Annual net sales at the time of acquisition were expected to amount to approximately SEK 80 m , and the operation had 23 employees .

Addnode Group is already the largest supplier of operation-critical support systems to design and engineering operations in the Nordic region and has established operations in the UK through the acquisition of Symetri . The acquisition also gave Addnode Group greater expertise and the potential for synergy effects . Symetri has been included in the Design Management business area since June 2014 .

The purchase price amounted to SEK 28 m and was paid in cash in connection with possession . According to the purchase price analysis , goodwill amounted to approximately SEK 23 m , and other acquisitionrelated intangible assets that arose in connection with the acquisition amounted to approximately SEK 6 m , for a total of approximately SEK 29 m , which has been deemed to be tax-deductible . The goodwill amount is attributable to the worked-up expertise of the staff and the employees ’ collective knowledge about software and IT systems , as well as synergy effects to a certain extent . Other acquired assets and liabilities pertain primarily to equipment and deferred income . During 2014 Symetri contributed net sales of approximately SEK 44 m to the Group , and had a positive impact on profit after tax of approximately SEK 2 m . If the acquisition had been carried out on 1 January 2014 , consolidated net sales for 2014 would have amounted to approximately SEK 1,632 m , and profit after tax would have been approximately SEK 103 m . Costs of SEK 1.3 m for carrying out the acquisition are included in the Group ’ s other external costs for 2014 .

Group 31 / 12 / 2015 31 / 12 / 2014

Cash consideration paid – 80,302 – 56,079