Basic HTML Version
88
/
APN
annual report
2011
notes to the financial statements
APN News & Media Limited and Controlled Entities
29. BUSINESS COMBINATIONS
On 25 February 2011 the Group acquired a further 25% of Idea HQ Limited (Idea HQ), a Group of online businesses based in New Zealand,
including the Group buying business GrabOne. The acquisition increased the Group’s shareholding to 75% and Idea HQ has been consolidated
from that date.
On 31 August 2011 the Group acquired 79% of Catalogue Central Pty Limited (CC Media), an online catalogue distribution business based
in Australia. The purchase agreement includes put and call options over the remaining shares.
Details of the purchase consideration, net assets acquired and goodwill are as follows:
CC Media
$’000
Idea HQ
$’000
Purchase consideration
Cash paid
7,895
1,932
Contingent consideration
4,679
2,318
Fair value of previously held interest
–
9,660
Total purchase consideration
12,574
13,910
Cash and cash equivalents
679
441
Receivables
846
659
Investments
–
468
Property, plant and equipment
32
305
Intangible assets
41
4,820
Deferred tax assets
269
–
Tax receivable
213
–
Other
87
–
Total assets
2,167
6,693
Payables
794
3,530
Deferred tax liabilities
–
945
Total liabilities
794
4,475
Value of net identifiable net assets
1,373
2,218
Less: Non-controlling interests
(364)
(4,637)
Add: Goodwill
11,565
16,329
Net assets acquired
12,574
13,910
The goodwill relating to both businesses is attributable to the fast rate of forecast growth in sales and resulting profitability. The goodwill
is not deductable for tax purposes.
(i) Contingent consideration
Idea HQ
In the event that certain pre-determined gross margin thresholds are achieved by Idea HQ, contingent consideration up to a maximum
of NZ$3,000,000 may be payable in cash. NZ$600,000 has been paid during 2011.
CC Media
In the event that certain pre-determined gross margin thresholds are achieved by CC Media, contingent consideration up to a maximum
of $4,679,000 may be payable in cash.
(ii) Non-controlling interests
The non-controlling interest in CC Media has been recognised using the proportionate share method. The non-controlling interest in Idea HQ
has been recognised at fair value.
(iii) Revenue and profit contribution
Idea HQ – The acquired business contributed revenues of $10,125,000 and a net loss after tax of $1,154,000 to the Group for the period from
25 February 2011 to 31 December 2011.
CC Media – The acquired business contributed revenues of $1,968,000 and a profit after tax of $396,000 to the Group for the period
31 August 2011 to 31 December 2011.