IMI Annual Report & Accounts 2014 - page 110

108
IMI plc
SECTION 3 – OPERATING ASSETS AND LIABILITIES
Continued
3.4
Acquisitions
The following section discusses businesses acquired by the Group, which
have given rise to the additions to the acquired intangible assets (including
goodwill) reported in section 3.2 and which contributed to the Group’s profits,
working capital and other balance sheet asset and liabilities. This section also
discusses acquisitions in the prior year and subsequent to the year-end.
3.4.1
Acquisitions subsequent to year-end
On 2 January 2015, the Group acquired the entire share capital of B&R Holding
GmbH (‘Bopp & Reuther’) for an enterprise value of approximately £118m
(
153m) including the assumption of debt of approximately £15m.
Bopp & Reuther is a leading manufacturer of safety, control and shut-off valve
technology for process industries as well as conventional fossil and nuclear
power plants worldwide. Its head office and manufacturing plant is located in
Mannheim, Germany and it has service centres in Germany, Austria, Romania
and China. The senior management and all of its 419 employees transferred
upon completion of the acquisition by the Group.
Bopp & Reuther joins the IMI Critical Engineering division and is very closely
aligned with IMI Critical Engineering’s existing large control valve business
(‘CCI’). For more information on Bopp & Reuther, see page 23.
Given the close proximity of this acquisition to the date of approval of these
financial statements, the initial acquisition accounting is not yet complete.
The completion accounts process and conversion of amounts from German
GAAP to IFRS has not yet been finalised. Consequently, disclosures regarding
the revenue and profits of Bopp & Reuther for 2014, the fair value of the assets
and liabilities acquired, the fair value of the consideration and amounts allocated
to goodwill and intangible assets have not been given and will be included in
the Group’s 2015 Interim announcement.
3.4.2
Acquisitions in the previous period
Analytical Flow Products (‘AFP’)
Following the acquisition of AFP on 21 August 2013, at 31 December 2013
the contingent consideration, identifiable net assets and resulting goodwill
were considered provisional. At 30 June 2014 these acquisition balances
were considered to be final. As discussed in section 3.5, the Group disposed
of AFP on 23 October 2014.
Nano-Porous Solutions Limited (‘NPSL’)
On 29 October 2013 the Group acquired NPSL for a total purchase
consideration of £6.1m. Total identifiable net assets were £4.2m, resulting in
goodwill of £1.9m. These amounts were deemed provisional at 31 December
2013. As of 30 June 2014, these provisional amounts were finalised with no
adjustment to the fair values of the assets and liabilities acquired.
3.5
Disposals
The Group disposed of the Retail Dispense businesses on 1 January 2014, Eley
Limited, Accles and Shelvoke Limited and Eley Americas Inc (together ‘Eley’)
on 4 October 2014 and Mecanique Analytique Inc (trade name ‘AFP’) on 23
October 2014.
Retail Dispense
The disposal of the Retail Dispense businesses are discussed further in the
section 2.5.
Eley
The Group disposed of Eley on 4 October 2014 for proceeds of £41.6m
resulting in an exceptional profit on disposal for the Group of £33.1m after
disposing of £6.5m of net assets and incurring £2.0m of associated disposal
costs. As discussed on page 37, the business was considered to be non-core
to IMI Critical Engineering’s operations.
The gain on disposal is presented in the income statement as an exceptional
item but it is not disclosed as a discontinued item because it did not represent
a separate major line of business.
AFP
Following the impairment loss of £10.8m recorded in the first half of the year,
the results of AFP continued to be disappointing. As a result, on 23 October
2014 the Group disposed of AFP. A payment was agreed of CAD$4.5m (£2.5m)
with the previous vendors to compensate them for the waiver of their earn-
out arrangement, which resulted in settlement of the estimated contingent
consideration owed. The resulting gain on disposal was £1.1m.
The gain on disposal is presented in the income statement as an exceptional
item but it is not disclosed as a discontinued item because it did not represent
a separate major line of business.
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