31 Business Combinations Acquisition of subsidiary undertakings
On 31 July 2017, the Group via its sub-subsidiary, Whistl UK Limited acquired a 76% interest in the issued share capital of Whistl Fulfilment Limited (formerly Prism-DM Holdings Limited) and its wholly owned trading subsidiaries, Whistl Fulfilment (Rushden) (formerly Prism-DM Limited) and Whistl Fulfilment (Farnborough) Limited (formerly Just Data Systems Limited). The primary activity of the trading entities is that of Fulfilment, Call Centre and Data Services. The fair value of consideration was £1,375,000 including acquisition related costs. The acquisition has been accounted for under the acquisition method.
Management have estimated the useful life of the goodwill to be 5 years.
The following table sets out the book values of the identifiable assets and liabilities acquired and their fair value to the Group.
Recognised amounts of identifiable assets acquired and liabilities: Analysis of changes in net cash:
Book value
Adjustment
Fair value
£’000
£’000
£’000
Property, plant and equipment
139
-
139 513
Intangible assets Trade receivables Other debtors Cash at bank Trade payable Other creditors
-
513
1,671 786 494
- - - - - - -
1,671 786 494
(1,035)
(1,035)
(232) (346) (370)
(232) (346) (370)
Accruals and deferred income
Provisions
Deferred tax
(15)
(97)
(112)
Total identifiable net assets Non-controlling interest
1,092
416
1,508
(262)
Goodwill
129 1,375
Satisfied by: Cash consideration Acquisition costs
1,368 7 1,375
The adjustments arising on acquisition were the recognition of intangible assets in respect of customer contracts and intellectual property and the deferred tax adjustment arising as a result of the acquisition adjustments. In the period ended 31 December 2017, revenue of £6,036,000 and a profit before tax of £189,000 were included in the consolidation income statement in respect of Whistl Fulfilment Limited (formerly Prism-DM Holdings Limited) and its subsidiaries since the acquisition date. The acquisition of 76% of the shareholding of Whistl Fulfilment Limited (formerly Prism-DM Holdings Limited) has been accounted for under the acquisition method. Call and put options were signed to acquire the 24% balance of the shares over two tranches, 14% and 10% respectively. The options are as follows: • Whistl can call the first 14% between 31 January 2018 and 31 January 2019, the 2nd party being able to put from 1 February 2019 to 28 February 2019. The values associated to the options are based on EBIT calculations for the year ending 31 January 2018. • Whistl can call the second 10% between 31 January 2019 and 31 January 2020, the 2nd party being able to put from 1 February 2020 to 28 February 2020. The values associated to the options are based on EBIT calculations for the year ending 31 January 2019. At the year-end it is not 100% certain that Whistl or the 2nd party will exercise these options. In addition is not possible to reliably estimate the value that will be paid as this value is based on financial statements post the year-end. Due to this uncertainty no provision has been recognised in these financial statements.
Financials | Whistl Annual Report 2017
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