[5] Acquisitions
Digital Applications International Limited
On March 2, 2020, 100.0 percent of the shares were acquired in UK software company Digital Applications International Limited (DAI), whose registered office is in London, United Kingdom. The purchase consideration for the net assets acquired was €110.3 million. The acquisition of DAI significantly expands the KION Group’s software offering in the Supply Chain Solutions segment.
The incidental acquisition costs incurred in connection with the business combination amounted to €2.7 million. Of this sum, €1.6 million was recognized in consolidated profit or loss under administrative expenses in the reporting year. The remaining €1.2 million related to the previous year. The table below shows the overall impact of this acquisition on the consolidated financial statements of KION GROUP AG based on the final figures available at the acquisition date.
in € million |
Fair value at the acquisition date |
|---|---|
Goodwill |
71.8 |
Customer relationships |
21.2 |
Other intangible assets |
12.0 |
Other property, plant and equipment |
11.3 |
Trade receivables |
5.7 |
Cash and cash equivalents |
8.8 |
Other assets |
29.5 |
Total assets |
160.3 |
|
|
Other non-current financial liabilities |
9.7 |
Other non-current liabilities |
12.1 |
Other current liabilities |
17.5 |
Other liabilities |
10.6 |
Total liabilities |
49.9 |
|
|
Total net assets |
110.3 |
|
|
Cash payment |
87.4 |
Assumed liabilities |
23.0 |
Consideration transferred |
110.3 |
As part of this transaction, receivables in a gross amount of €5.7 million and contract assets of €3.0 million were acquired. At the acquisition date, it was assumed that the amount of irrecoverable trade receivables was insignificant.
In 2020, consolidated revenue rose by €16.4 million and net income for the period by €0.9 million as a result of the acquisition.
If the business combination had been completed by January 1, 2020, this would have had no further material impact on either the revenue or the net income (loss) reported by the KION Group in 2020.
Goodwill constitutes the strategic synergies that the KION Group expects to derive from this business combination. The goodwill arising from this acquisition is currently not tax deductible. The derived goodwill is assigned to the Dematic cash-generating unit (CGU).
The line item ‘Acquisition of subsidiaries/other businesses (net of cash acquired)’ in the consolidated statement of cash flows contains a net cash outflow of €89.3 million for the acquisition of DAI.
Other acquisitions
With effect from January 1, 2020, 50.0 percent of the shares were acquired in KION Battery Systems GmbH (KBS), Karlstein, Germany. KBS is fully consolidated in the KION Group’s financial statements on the basis of the control criteria set out in IFRS 10, in particular due to its economic dependence. Upon completion of the transaction, KBS acquired the research and development business – which had previously been at the disposal of the KION Group – of BMZ Batterien-Montage-Zentrum GmbH, Karlstein, for €6.6 million with effect from January 1, 2020 as part of an asset deal.
With effect from July 1, 2020, KBS acquired the operating business – which had also previously been at the disposal of the KION Group and predominantly consisted of production activities – of BMZ Batterien-Montage-Zentrum GmbH, Karlstein, for €11.5 million as part of another asset deal.
With effect from May 29, 2020, 100.0 percent of the shares were acquired in innogy Business Services Polska sp. z. o. o., Krakow, Poland. The purchase consideration for these shares was approximately €3.3 million. When it acquired this entity, which specializes in accounting services, the KION Group took on around 240 employees.
Both individually and taken together, these acquisitions had only a negligible impact on the KION Group’s financial position and financial performance based on the figures available at their acquisition dates.