Notes for P&L

All amounts in SEKm unless otherwise stated

Note 29 Acquisitions of companies

Eight companies were acquired during the year (see Note 28). The acquisitions had combined annual sales of about SEK 590 million. Assets and liabilities included in the acquisitions were as follows:

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Carrying amount at acquisition date Adjustment to fair value Fair value
Intangible non-current assets 0 156 156
Other non-current assets 23 23
Inventories 66 66
Other current assets 180 180
Deferred tax liability/tax asset -1 -39 -40
Other liabilities -147 -147
Acquired net assets 121 117 238
Goodwill     111
Non-controlling interests     -3
Consideration 1)     346
Less: cash and cash equivalents in acquired businesses     -44
Less: consideration not yet paid     -23
Effect on the Group’s cash and cash equivalents     279
 1) The consideration is stated excluding acquisition expenses.

The combined consideration for the acquisitions was SEK 346 million, of which SEK 266 million, according to preliminary acquisition analyses, was allocated to goodwill and other intangible assets. Several of the acquisitions took place recently, which is why the acquisitions analyses are preliminary. In addition, the remaining participations in three existing companies were acquired: 20 percent in  i Rollco Norge AS, 15 percent in Rollco Oy and 10 percent in Svensk Miljö- och Processanalys, to a total of SEK 3 million.The combined effect of the acquisitions on the Addtech Group's net sales was SEK 303 million, on operating profit SEK 13 million and on profit after tax for the period SEK 7 million.

Had the acquisitions been completed on 1 April 2012, their impact would have been an estimated SEK 630 million on net sales, about SEK 45 million on operating profit and some SEK 25 million on profit after tax for the period. The transaction costs for acquisitions with a takeover date during the financial year amount to SEK 3 million and are recognised in the selling expenses item. Of the consideration not yet paid, estimated contingent consideration amounts to SEK 21 million, which constitutes about 84 percent of the maximum outcome. The outcome depends on the results achieved in the companies and has a set maximum level.

During the period, SEK 7 million was recognised in other operating income because calculated contingent considerations regarding earlier acquisitions differed from the actual outcome. Revaluation of liabilities for contingent, not yet paid considerations led to an expense of SEK 1 million in the financial year, recognised in other operating expenses. No material changes in acquisition analyses were made in the financial year with regard to acquisitions carried out in the year or in previous years.

The values allocated to intangible non-current assets, such as supplier relationships, customer relationships, technology and trademarks, were assessed at the discounted value of future cash flows. The amortisation period is determined by estimating the annual decrease in sales attributable to each asset. Supplier relationships are generally amortised over a period of 5-33 years; customer relationships and technology are amortised over 5-15 years. Trademarks are not amortised but are tested annually (for impairment) as per IAS 36. Annual calculated amortisation regarding intangible non-current assets for the year's acquisitions amounts to about SEK 15 million.

The goodwill resulting from the acquisitions is attributable to expectations that the Group's position in the market in question for each acquisition will grow stronger and to the knowledge accumulated in the companies acquired.