[5] Acquisitions
Dematic purchase price allocation
The purchase price allocation for the acquisition of DH Services Luxembourg Holding S.à r.l., Luxembourg, on 1 November 2016 that was recognised in the consolidated financial statements of KION GROUP AG as at 31 December 2016 was provisional.
As part of the finalisation of the purchase price allocation (PPA) for the acquisition of Dematic in the third quarter of 2017, the intangible assets were allocated to individual companies. This adjustment resulted in a reduction of deferred tax liabilities and a corresponding decline of €13.1 million in goodwill.
As a result of the retrospective restatement of the purchase price allocation as at 1 November 2016, adjustments were also made to the carrying amounts as at 31 December 2016. These adjustments are presented in > TABLE 047.
Consolidated statement of financial position |
047 |
|||
in € million |
31/12/2016 |
Adjustment Purchase price allocation Dematic |
Effects from exchange differences |
31/12/2016 |
Assets |
|
|
|
|
Goodwill |
3,605.8 |
–13.1 |
–19.8 |
3,572.9 |
Other intangible assets |
2,630.9 |
0.0 |
–28.2 |
2,602.7 |
Other property, plant and equipment |
679.1 |
– |
–0.8 |
678.3 |
Deferred taxes |
420.2 |
–0.3 |
–0.1 |
419.8 |
|
|
|
|
|
Equity and liabilities |
|
|
|
|
Accumulated other comprehensive income |
–207.0 |
– |
–39.4 |
–246.4 |
Deferred taxes |
905.3 |
–13.3 |
–9.5 |
882.5 |
Currency translation effects as at 31 December 2016 fell by a total of €39.4 million because goodwill and other intangible assets had been allocated to individual companies for the purposes of foreign currency translation. The retrospective adjustments to the purchase price allocations did not have a material impact on the KION Group’s consolidated income statement.
Other acquisitions
With effect from 3 October 2017, the remaining share capital and voting rights (75.0 per cent) in Nordtruck AB, Örnsköldsvik, Sweden, were acquired. The purchase consideration for these shares was €4.8 million. Remeasurement of the investment of 25.0 per cent previously held, which had been recognised at cost, resulted in a fair value of €1.6 million. The difference of €1.5 million resulting from remeasurement was taken to income and recognised in the consolidated income statement under other income.
Furthermore, the remaining share capital and voting rights (50.0 per cent) in Eisengiesserei Dinklage GmbH, Dinklage, Germany, were acquired with effect from 15 November 2017. The purchase consideration for these shares was €2.4 million. Remeasurement of the investment of 50.0 per cent previously held, which had been recognised at cost, resulted in a fair value of €2.4 million. The difference of €0.9 million resulting from remeasurement was taken to income and recognised in the consolidated income statement under other income.
The impact of these acquisitions on the consolidated financial statements of KION GROUP AG based on the figures available at their acquisition dates is shown in > TABLE 048.
Impact of the other acquisitions on the financial position of the KION Group |
048 |
in € million |
Fair value at the acquisition date |
Goodwill |
9.5 |
Other property, plant and equipment |
3.7 |
Leased / Rental assets |
1.0 |
Lease receivables |
7.3 |
Trade receivables |
3.8 |
Cash and cash equivalents |
0.3 |
Other assets |
5.2 |
Total assets |
30.7 |
|
|
Financial liabilities |
4.0 |
Lease liabilities |
7.9 |
Trade payables |
3.6 |
Other liabilities |
4.1 |
Total liabilities |
19.6 |
|
|
Total net assets |
11.1 |
|
|
Cash payment |
7.2 |
Consideration transferred |
7.2 |
Previously held share of equity |
4.0 |
Total |
11.1 |
The goodwill constitutes the strategic, technological and geographical synergies that the KION Group expects to derive from these business combinations. None of the goodwill arising from the other acquisitions is currently tax deductible. The goodwill derived from Nordtruck AB is assigned to the LMH EMEA Operating Unit, while that derived from Eisengiesserei Dinklage GmbH is assigned to the STILL EMEA Operating Unit.
The line item ‘Acquisition of subsidiaries (net of cash acquired) and other equity investments’ in the consolidated statement of cash flows contains a net cash outflow totalling €6.9 million for these transactions.
The purchase price allocations for the other acquisitions presented were considered provisional as at 31 December 2017 because some details, particularly the measurement of intangible assets, provisions and leases, had not yet been fully evaluated. In addition, the deferred taxes should be considered provisional.