Annual Report 2010 - CDON Group

On 31 March, the Group acquired 90.1% of shares in Lekmer AB for a purchase price of SEK 7.5 million. Lekmer is a leading online retailer
of toys in Sweden. Lekmer.com’s earnings has been fully consolidated within the Entertainment segment from 1 April 2010. Lekmer.com
has also subsequently been rolled out on a pan-Nordic basis. During the nine months until 31 December 2010, the subsidiary contributed
66 CDON SEK 27,499 Group thousand AB to consolidated revenue and SEK 7,207 thousand to Group loss after tax. If the acquisition had occurred on 1 January
Annual 2010, Group report management 2010 estimates that consolidated revenue would have totalled SEK 2,212,024 thousand, and profit for the year
would have been SEK 90,580 thousand.
Accrued goodwill in 2010 consists of strategic advantages, market positions, and synergies. No part of recognised goodwill is expected to
be deductible.
Acquired net assets (SEK thousands):
Carrying amount
Property, plant, and equipment 90
Intangible non-current assets 6,309
Inventory 2,985
Accounts receivable and other receivables 433
Cash and cash equivalents -
Deferred tax liability -1,659
Accounts payable and other operating liabilities -3,514
Net identifiable assets and liabilities 4,643
Non-controlling interest -827
Goodwill on acquisition 3,697
Purchase price 7,514
Cash and cash equivalents in acquired companies -
Provisions for conditional purchase considerations -4,122
Net cash flow 3,392
Contingent consideration
The contingent consideration arrangement requires a conditional purchase consideration to be paid to the former owners of Lekmer AB,
based on the company’s future gross profit. The conditional purchase consideration is an unlimited amount.
The fair value of the contingent consideration arrangement was estimated by applying the income approach. The fair value estimate is
based on a discount rate of 12% and assumed probability-adjusted gross profit.
As of 31 December, the contingent consideration decreased by SEK 586 thousand as the probability-adjusted gross profit after a new
calculation is expected to be lower than original estimates.
Acquisitions 2009
The Group acquired additional shares from minority holders during the year. A portion, 0.5% of capital and votes, of the minority holding
CDON in NLY Scandinavia Group AB AB was acquired, and a contingent consideration price was paid for Helsingin Dataclub OY. These acquisitions were
Annual
reported
report
in the
2010
Fashion and Entertainment segments, respectively.
Group (SEK thousands)
Net cash flow
2009
Net identifiable
assets and
liabilities Goodwill
Acquisition of non-controlling interests in NLY Scandinavia AB 3,225 - 3,225
Additional purchase price from previous years, paid, Helsingin Dataclub OY 3,006 - 3,006
Total 6,231 - 6,231
Acquisitions after the reporting date
On 31 January, 90.1% of RUM21.se, a Swedish online retailer of designer brand furniture and interior design, was acquired. RUM21.se was
consolidated into the Group from 1 February 2011. See more in Note 29.
Note 6 Other income and expenses
Group (SEK thousands) 2010 2009
Other operating income
Gain from sale of non-current assets 120 2,148
Exchange gains on operating receivables/liabilities 1,084 59
Revaluation regarding contingent consideration for Lekmer AB 586 -
Total 1,790 2,207
Other operating expenses
Exchange losses on operating receivables/liabilities - -1,473
Total - -1,473