Notes to the Group Financial Statements (continued)
for the year ended 31st December 2012
27. Acquisitions during the year
Year ended 31st December 2012
The Group acquired the following businesses during the year:
a. Davis tate Limited
In January 2012 the Group acquired 51% of Davis Tate, an 11 branch estate agency chain operating in 14 locations within the Thames Valley for a
cash consideration £1.6m. The remaining 49% is subject to put and call options which are exercisable in two tranches in 2013 and 2016 dependent
on profit performance and in part continued employment of the vendors. Due to the nature of the payment terms, the deferred consideration is
considered to be an employee expense and not a capital payment for accounting purposes (see note 7 for the expense in the current year).
The fair value of the identifiable assets, except for cash and cash equivalents, and liabilities of Davis Tate as at the date of acquisition have been
determined as below:
Fair value
recognised on
acquisition
£’000
Intangible assets 236
Property, plant and equipment 39
Trade and other receivables 139
Cash and cash equivalents 239
Trade and other payables (827)
Current tax liabilities (159)
total identifiable net liabilities acquired (333)
Purchase consideration 1,633
Goodwill 1,966
Purchase consideration discharged by:
Cash 1,633
Deferred consideration –
1,633
£’000
Analysis of cash flow on acquisition
Transaction costs (included in cash flows from operating activities) –
Net cash acquired with the subsidiary (included in cash flows from investing activities) 239
Purchase consideration discharged in cash (included in cash flows from investing activities) (1,633)
net cash outflow on acquisition 1,394
Transaction costs have been expensed and are included under exceptional costs (see note 7).
The goodwill of Davis Tate comprises certain intangible assets that cannot be individually separated and reliably measured from the acquiree due to
their nature. These items include the high quality, dynamic and experienced management team with an outstanding record of delivering strong and
profitable growth against the backdrop of challenging market conditions, the expected value of synergies and the potential to significantly grow the
business.
94 ANNUAL REPORT AND ACCOUNTS 2012