4.3 Business combinations and divestments
Business combinations
In the reporting period, only smaller acquisitions were made: Autodor Services Ltd in New Zealand, GBS Groothandel in Beveiligingssystemen B.V. in the Netherlands, Chartwell Doors Ltd in the United Kingdom, and Locktech BVBA in Belgium.
The following table summarizes the considerations paid for businesses and the amounts of assets and liabilities acquired, recognized at fair value as at the acquisition date.
|
|
|
|
|
CHF million |
| Financial year ended 30.06.2019 |
| Financial year ended 30.06.2018 |
Consideration as at acquisition date |
|
|
|
|
Cash paid |
| 6.2 |
| 134.7 |
Deferred payment |
| 0.1 |
| 6.6 |
Acquisition-related costs |
| 0.3 |
| 3.1 |
Total consideration |
| 6.6 |
| 144.4 |
Identifiable assets and liabilities |
|
|
|
|
Cash and cash equivalents |
| 0.4 |
| 6.1 |
Trade receivables |
| 0.7 |
| 10.0 |
Inventories |
| 0.3 |
| 6.2 |
Current income tax assets |
| 0.0 |
| 0.6 |
Other current assets |
| 0.0 |
| 2.7 |
Property, plant, and equipment |
| 0.2 |
| 10.2 |
Intangible assets |
| 0.0 |
| 0.4 |
Non-current financial assets |
| 0.0 |
| 0.1 |
Deferred income tax assets |
| 0.0 |
| 0.3 |
Current borrowings |
| 0.0 |
| –2.9 |
Trade payables |
| –0.3 |
| –2.8 |
Current income tax liabilities |
| –0.1 |
| –0.7 |
Accrued and other current liabilities |
| –0.5 |
| –12.6 |
Provisions |
| 0.0 |
| –0.1 |
Non-current borrowings |
| –0.3 |
| –2.4 |
Accrued pension costs and benefits |
| 0.0 |
| –0.4 |
Deferred income tax liabilities |
| 0.0 |
| –2.1 |
Other non-interest bearing liabilities |
| 0.0 |
| –0.1 |
Total identifiable net assets |
| 0.4 |
| 12.5 |
Goodwill |
| 6.2 |
| 131.9 |
Total consideration |
| 6.6 |
| 144.4 |
Accounting principles
Goodwill represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquired entity and the book value as at the acquisition date of any previous equity interest in the acquired entity over the fair value of the Group’s share of the identifiable net assets acquired. Only intangible assets purchased separately are recognized as part of an acquisition. The positive or negative goodwill resulting from acquisitions is offset in equity at the date of acquisition against retained earnings.
If the purchase price contains elements that are dependent on future results, they are estimated as accurately as possible at the date of acquisition and recognized in the balance sheet. In the event of any disparities when the definitive purchase price is settled, the goodwill offset in equity is adjusted accordingly. The consequences of a theoretical capitalization and amortization of goodwill are explained in the note on the theoretical equity and goodwill movement (3.4).
Business divestments
In December 2018, dormakaba divested parts of the US Door Hardware Service Business in the AS AMER segment due to insufficient profitability.
The following table summarizes the considerations paid and received as well as the net assets divested. The resulting net goodwill was offset in equity.
|
|
|
|
|
CHF million |
| Financial year ended 30.06.2019 |
| Financial year ended 30.06.2018 |
Consideration as at divestment date |
|
|
|
|
Cash consideration received |
| 0.0 |
| 44.7 |
Purchase price for minority shares paid |
| 0.0 |
| –8.3 |
Divestment-related costs paid |
| 0.0 |
| –1.2 |
Divestment price adjustment1) |
| –1.8 |
| 0.0 |
Total consideration |
| –1.8 |
| 35.2 |
Assets and liabilities divested |
|
|
|
|
Cash and cash equivalents |
| 0.0 |
| 22.7 |
Trade receivables |
| 0.0 |
| 11.1 |
Inventories |
| 0.0 |
| 12.6 |
Other current assets |
| 0.0 |
| 0.8 |
Property, plant, and equipment |
| 0.0 |
| 12.9 |
Intangible assets |
| 0.0 |
| 0.1 |
Non-current financial assets |
| 0.0 |
| 0.3 |
Trade payables |
| 0.0 |
| –6.7 |
Current income tax liabilities |
| 0.0 |
| –0.3 |
Accrued and other current liabilities |
| 0.0 |
| –3.7 |
Provisions |
| 0.0 |
| –0.9 |
Accrued pension costs and benefits |
| 0.0 |
| –0.6 |
Total net assets divested |
| 0.0 |
| 48.3 |
Goodwill, net |
| –1.8 |
| –13.1 |
Total consideration |
| –1.8 |
| 35.2 |
1)In 2018/19: the divestment price adjustment of CHF 1.8 million relates to a business divestment from a previous year.
Accounting principles
Upon the disposal of an entity, the goodwill previously offset in equity is transferred to the income statement.