Torp Computing Group ASA

31
INFORMATION MEMORANDUM
Merger of Komplett ASA and Torp Computing Group ASA
The acquisition is formally implemented as a merger at fair value where Komplett is the
assignor and TCG the assignee. The proposed exchange ratio is 79.11/20.89 for
shareholders in Komplett and TCG respectively, representing 0.336134 shares in
Komplett per each share in TCG.
The acquisition is presented at fair value, representing a value of NOK 501 million for
the shares in TCG. The proposed exchange ratio is based on a fair value of NOK 1,897
million for the shares in Komplett ASA. The total fair value of the merged group is
valued to NOK 2,398 million. Consequently, Komplett is issuing new shares
representing 26.41% of their total share capital.
Estimated transaction costs are added with NOK 3 million.
The values are based on external valuations of the two companies/groups prepared by
independent valuers.
The acquisition of TCG has been incorporated in the pro forma income statement as if
the purchase had been effective on 1 January 2006 and in the balance sheet as if it had
been completed 30 June 2007. Figures for 2006 are derived from the audited historical
financial statement included elsewhere in the document with considerations of
accounting principles to ensure consistency with the accounting principles.
In connection with the acquisition of TCG ASA the difference between the purchase
price and the historical basis of the assets and liabilities acquired has been incorporated
in the pro forma information as if it the purchase had taken place on 30 June 2007.
5.8.3 Purchase accounting
Both estimation of value of assets (tangible and intangible) and depreciation period included in the
pro forma information are based on an external Purchase Price Allocation (PPA) report prepared in
accordance with IFRS 3 Business Combinations, relating to the acquisition of TCG ASA.
Depreciations are calculated linear over estimated useful lives. The final purchase price allocation
may vary from those presented in the pro forma information.
The purchase price allocation conclude that around 28% of the fair value should be allocated to net
working capital, tangible and intangible assets, the latter mainly being value of trade names and
customer relationships. Trade names have an indefinite useful life and customer relationships have
a useful life of 3 to 5 years. The 68% residual value is classified as goodwill amounting to
approximately NOK 322.6 million. In accordance with IFRS goodwill is not depreciated, but be
tested annually for impairment.
5.8.4 Uniform and consistent accounting principles
The historical consolidated financial statements for Komplett ASA Group and TCG ASA Group are
reported based on IFRS accounting principles, except from TCG’s 2004 accounts, which are based
on NGAAP. In the pro forma financial information the consolidation and the acquisitions are treated
in consistence with IFRS 3 Business Combinations.
In certain areas IFRS allows different accounting policies. In other areas judgements and estimates
may lead to inconstancy in measurements.
As regards the consolidation of the financial statements considerations have been made evaluating
consistency regarding accounting estimates, judgements and applying IFRS accounting policies.