Note 29

Acquisitions of companies

Acquisitions completed as of the 2017/2018 financial year are distributed among the Group’s business areas as follows:

Acquisitions (disposals) Country Closing Net sales,
Number of employees* Business Area
Dovitech A/S Denmark April, 2017 100 5 Components
Craig & Derricott Holdings Ltd Great Britain April, 2017 110 90 Power Solutions
Altitech A/S** Denmark June, 2017 15 5 Components
(Batteriunion i Järfälla AB) Sweden (June, 2017) (140) (16) (Power Solutions)
Mobile Control Systems-bolagen Belgium October, 2017 50 17 Power Solutions
Ingenjörsfirma Pulsteknik AB Sweden November, 2017 50 10 Components
Sensor ECS A/S ** Denmark November, 2017 155 9 Components
Fintronic Oy (assets and liabilities) Finland December, 2017 7 1 Components
STIGAB Stig Ödlund AB Sweden December, 2017 115 12 Components
Finn-Jiit Oy Finland January, 2018 40 10 Components
2 Wave Systems AB ** Sweden January, 2018 16 2 Components
IPAS AS Norway January, 2018 40 10 Energy
Synthecs-gruppen ** Netherlands April, 2018 145 50 Components
Xi Instrument AB Sweden April, 2018 13 2 Energy
KRV AS Norway April, 2018 55 27 Industrial Process
Scanwill Fluid Power ApS och Willtech ApS Denmark April, 2018 15 4 Components
Duelco A/S Denmark July, 2018 150 30 Energy
Prisma Teknik AB och Prisma Light AB Sweden July, 2018 70 27 Energy
Fibersystem AB** Sweden July, 2018 140 12 Components
TLS Energimätning AB Sweden July, 2018 50 9 Industrial Process
Diamond Point International (Europe) Ltd** Great Britain July, 2018 40 9 Components
Power Technic ApS Denmark July, 2018 50 6 Power Solutions
(Solar Supply Sweden AB) Sweden (August, 2018) (80) (5) (Power Solutions)
Nordautomation Oy Finland September, 2018 155 85 Industrial Process
Wood Recycling Sweden AB Sweden October, 2018 7 2 Industrial Process
Nylund Industrial Electronics (assets and liabilities) Finland January, 2019 35 3 Components
Birepo A/S Denmark January, 2019 35 10 Components
Omni Ray AG Switzerland April, 2019 330 65 Automation
Thurne Teknik AB Sweden April, 2019 100 19 Industrial Process
AB N.O. Rönne Sweden April, 2019 8 4 Industrial Process
Best Seating Systems Walter Tausch GmbH Austria May, 2019 23 5 Power Solutions
* Refers to assessed condition at the time of acquisition and disposal, respectively, on a full-year basis.
**As of April 1, 2019, the company belongs to the Automation business area.

The value of assets and liabilities included in acquisitions from the 2017/2018 financial year have been determined conclusively. There has been no change in the acquired values. According to the preliminary acquisition analyses, the assets and liabilities included in the acquisitions for the year were as follows:


2017/2018 2016/2017
Carrying amount at acquisition date Adjustment to fair value Fair value Carrying amount at acquisition date Adjustment to fair value Fair value
Intangible non-current assets 10 327 337 0 323 323
Other non-current assets 61 2 63 10 10
Inventories 68 68 67 67
Other current assets 281 281 198 198
Deferred tax liability/tax asset -6 -69 -75 -1 -69 -70
Other liabilities -222 -15 -237 -166 -8 -174
Acquired net assets 192 245 437 108 246 354
Goodwill 306 314
Non-controlling interests
Consideration 1) 743 668
Less: cash and cash equivalents in acquired businesses -96 -50
Less: consideration not yet paid -83 -170
Effect on the Group’s cash and cash equivalents 564 448
1) The consideration is stated excluding acquisition expenses.

The combined consideration for the year’s acquisition was SEK 743 million, of which SEK 643 million, according to preliminary acquisition analyses, was allocated to goodwill and other intangible assets. Had the acquisitions been completed on 1 April 2018, their impact would have been an estimated SEK 870 million on consolidated net sales, about SEK 60 million on operating profit and about SEK 45 million on profit after tax. 

Addtech uses an acquisition structure with a base purchase price and contingent consideration.  The outcome of contingent considerations is dependent on future results achieved in the companies and has a set maximum level. Of contingent considerations for acquisitions during the financial year that are yet to be paid, the discounted value amounts to SEK 85 million. The contingent considerations fall due within three years and the outcome may not exceed SEK 113 million. If the conditions are not met, the outcome may be in the range of SEK 0-113 million. 

For acquisitions that resulted in ownership transfer during the financial year, transaction costs totalled SEK 7 million (6) and are recognised in selling expenses. 

Revaluations of contingent considerations had a net positive impact of SEK 8 million (9) on the financial year. The impact on profits is recognised in other operating income and other operating expenses, respectively. No material changes in acquisition analyses were made in the financial year with regard to acquisitions carried out in the year or in previous years. 

Consolidated goodwill at the time of the acquisition, regarding the expected future sales trend and profitability, is the amount by which the acquisition value exceeds the fair value of net assets acquired. As of 31 March 2019 non-taxable goodwill amounted to SEK 1,767 million, to be compared with SEK 1,456 million as of 31 March 2018. The change is attributable to acquisitions and exchange differences. Consolidated goodwill is assessed annually for impairment, and no needs for impairment have been identified. 

The values allocated to intangible non-current assets, such as supplier relationships, customer relationships, technology and trade-marks, were assessed at the discounted value of future cash flows. The amortisation period is determined by estimating the annual de-crease in sales attributable to each asset. Supplier relationships are generally amortised over a period of 5-10 years customer relation-ships and technology are amortised over 10 years. Trademarks are not amortised but are tested annually in accordance with IAS 36. Annual calculated amortisation regarding intangible non-current as-sets for the year’s acquisitions amounts to about SEK 33 million.

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