Notes to the Group Financial Statements (continued)
for the year ended 31st December 2012
27. Acquisitions during the year (continued)
d. Acquisition by Linear Mortgage networks
During the year, Linear Mortgage Networks acquired the assets of Mortgage Options for £100,000 and the assets of Hoath Independent Financial
Planning for £46,000 as well as other miscellaneous customer contracts for £15,000. Apart from the customer contracts acquired there were no
other separately identifiable intangible assets and so all of the consideration was allocated to customer contract intangible asset.
e. Lettings acquisition by your Move
During the year, Your Move completed the acquisition of the NSK lettings business for a total cash consideration of £10,000. There were no
separately identifiable net assets and all the consideration was towards goodwill.
From the date of acquisition to 31st December 2012, the acquisitions in aggregate have contributed to £4.8m of revenue and £1.2m profit before tax
of the Group, excluding the impact of movements in the contingent consideration recorded through the profit and loss. If all of these combinations
had taken place at the beginning of the year, the consolidated revenue would have been higher by £6.5m and the consolidated profit before tax
would have been higher by £1.4m.
Of the total goodwill arising on all acquisitions, none is expected to be deductible for tax purposes.
Year ended 31st December 2011
The Group acquired the following businesses during the year:
a. Marsh & Parsons
On 23rd November 2011, the Group through its newly incorporated subsidiary Marsh & Parsons Holdings Limited, completed the acquisition of the
entire share capital of Marsh & Parsons for the consideration of £55.9m, which after considering cash acquired of £5.7m is an enterprise value of
£50.2m. Marsh & Parsons is a leading London estate agency operating a premium brand in the mid-segment of the prime London property with 14
offices in Central and South-West London.
The fair value of the identifiable assets, except for cash and cash equivalents, and liabilities of Marsh & Parsons as at the date of acquisition have been
determined as below:
Provisional fair
value recognised
on acquisition
£’000
Intangible assets 12,054
Property, plant and equipment 2,962
Trade and other receivables 3,453
Cash and cash equivalents 5,707
Trade and other payables (4,014)
Current tax liabilities (806)
Deferred tax liabilities (3,775)
total identifiable net assets acquired 15,581
Purchase consideration 55,888
Goodwill 40,307
Purchase consideration discharged by:
Cash 45,398
Issue of 12% unsecured loan notes measured at fair value 8,660
Issue of 2% unsecured loan notes 1,496
Deferred consideration 334
55,888
£’000
Analysis of cash flow on acquisition
Transaction costs (included in cash flows from operating activities) (1,629)
Net cash acquired with the subsidiary (included in cash flows from investing activities) 5,707
Purchase consideration discharged in cash (included in cash flows from investing activities) (45,398)
net cash outflow on acquisition (41,320)
Transaction costs have been expensed and are included under exceptional costs (see note 7).
96 ANNUAL REPORT AND ACCOUNTS 2012