NOTES TO THE FINANCIAL STATEMENTS
27. Business combinations://
On 31 March 2017, Vector Energy Solutions Limited (formerly known as Vector Solar Limited) and its subsidiary, Vector Contracting Services Limited acquired 100% of the voting shares in E-Co Products Group Limited (“E-Co Products”) and the business and net assets of PowerSmart NZ Limited (“PowerSmart”) respectively for total cash consideration of $91.0 million. Vector Contracting Services Limited simultaneously changed its name to PowerSmart NZ Limited on 31 March 2017. Both Vector Energy Solutions Limited and PowerSmart NZ Limited are wholly owned subsidiaries of Vector. E-Co Products is a provider of healthy home solution products. E-Co Products operates primarily in New Zealand with some small scale operations in Australia. PowerSmart is a provider of solar power solutions, primarily to the commercial and industrial sectors. The acquired businesses will provide Vector with complementary channels to deliver healthy and energy efficient solutions directly to customers. Goodwill is attributable to the synergies that these channels are expected to deliver to the group, as well as the knowledge and skillset of the staff retained. None of the goodwill recognised is expected to be deductible for tax purposes. The fair values of the assets and liabilities acquired have been determined on a provisional basis. The final determination of fair values will be finalised within twelve months from the date of the acquisition. The difference between the provisional fair value of assets and liabilities acquired and the purchase price has been recognised as goodwill.
2017 $000
Provisional fair value of net assets acquired at acquisition date Net working capital
956
Property, plant and equipment (including software)
5,029
Identifiable intangible assets
45,000 (12,438) (15,430) 67,868 90,985 92,006 (1,021) 90,985
Deferred tax liability
Bank debt and other liabilities subsequently repaid
Goodwill
Net assets and liabilities acquired
Cash paid 31 March 2017 Post-acquisition adjustment
Total consideration
On the date of acquisition, Vector repaid $15.4 million of E-Co Products’ liabilities. The repayment was treated as a separate transaction. From the date of acquisition, E-Co Products and PowerSmart have contributed a combined $17.5 million of revenue and $0.5 million of profit before tax to the group. If the acquisitions had taken place at the beginning of the period, the combined contribution to revenue and net profit before tax for the group would have been $68.9 million and $8.7 million respectively.
116
Vector://AR 17
Made with FlippingBook Annual report