Save PDF - Manutencoop

4.8 Acquisition of Gruppo Sicura S.r.l.
On 30 December 2008, MFM S.p.A. acquired 80% of the quota capital of Gruppo Sicura S.r.l., a company based in
Vicenza that controls a group of about ten small companies. These companies create and supply services, products
and systems for protection against fire and for the safety of persons and assets, mainly serving the retail market
(SMEs).
The structure of the group acquired is described in para. 2.4.
Accounting effects of the acquisition
This transaction is a business combination. Accordingly, the purchase method envisaged in IFRS 3 was adopted by
the Group to record the transaction.
The total cost of the acquisition was Euro 15,329 thousand, including Euro 184 thousand in purchase-related
costs (legal expenses, financial consultancy and antitrust procedures).
The purchase consideration was paid to the sellers on completion of the transaction.
The contract also envisages:
• payment to the sellers of an additional price (earn-out) for the 80% interest acquired. This amount is payable, upon
request from the sellers between 1 July 2014 and 30 June 2015, on condition that the normalised consolidated
EBITDA of Gruppo Sicura for 2013 exceeds its normalised EBITDA for 2007;
• grant of a put option (by the buyer to the sellers, exercisable between 30 June 2014 and 30 June 2015) and a
call option (by the sellers to the buyer, exercisable between 1 July 2015 and 1 July 2017) for the transfer of the
remaining 20% of the quota capital.
The additional price for the 80% interest acquired and the exercise price of the options over the residual 20%
will both be determined with reference to the updated valuation of the investment at the time the sellers request
payment in the first case, and at the option exercise date in the second case.
The updated valuation of the investment will be determined as a multiple (determined in the contract or, if MFM
S.p.A. is listed at that time, by reference to its average market price over the preceding three months) of the
normalised consolidated EBITDA for 2013, less the consolidated net financial position of Gruppo Sicura S.r.l. as of
31/12/2013.
Pursuant to current accounting standards, the present value of the exercise price (if applicable) of the put option
and of the additional price payable (earn-out) should have been recognised as a financial liability in these financial
statements, had the amounts concerned been determinable on a reliable basis.
The Parent Company's management believes it likely that the earn-out will be payable (EBITDA 2013 greater than
EBITDA 2007), but, on preparing the consolidated financial statements as of 31 December 2008, management did
not have enough information to be able to estimate reliably the amount of such purchase price adjustment or the
exercise price (if applicable) of the put option.
Accordingly, the related financial liability has not been recognised.
At this time, it is objectively impossible to make a reliable estimate of the above two amounts due to a number of
factors listed below:
• the significant time interval between now and the date on which such amounts will be determined,
• the large number of significant variables involved in the valuation concerned,
• the poor predictability of these significant variables, especially with regard to the implied multiple to be used,
• the need for MFM management to become familiar with the normal business drivers in a sector that is new to the
Group.
In order to provide full and complete information about this transaction, it is possible to determine the total
financial liability that would have been recognised in these financial statements in the absence of the above
uncertainties. This amount would have been equal to the present value of the difference between the updated
valuation of 100% of the investment (calculated using the 2013 data and the applicable multiple) and the amount
paid in 2008 for 80% of the investment (Euro 15,145 thousand).
Accordingly, should the updated valuation of the investment be the same as its current value, the financial liability
associated with the earn-out would be zero, while the present value of that associated with the option would be
about Euro 3.8 million. If, on the other hand, consistent with the expectations of Group management, the financial
and operating performance of the Sicura Group leads to a higher updated valuation for the investment, then the
liability to be recognised would be greater by the present value of such difference.
153