ANNUAL REPORT 2004 - Luxottica Group

In thousands of Euro
Assets purchased
Cash and cash equivalents
Inventories
Property, plant and equipment
Prepaid expenses and other current assets
Accounts receivable
Trade name (useful life of 25 years, no residual value)
Other assets including deferred tax assets
Liabilities assumed
Accounts payable and accrued expenses
Other current liabilities
Deferred tax liabilities
Long-term debt
Bank overdraft
Fair value of net assets
Goodwill
Total purchase price
B) OPSM GROUP
In May 2003, Luxottica Group formed an indirect
wholly-owned subsidiary in Australia, Luxottica South
Pacific Pty Limited, for the purpose of making a cash
offer for all outstanding shares, options and
performance rights of OPSM Group Limited (“OPSM”),
a publicly traded company on the Australian Stock
Exchange. The cash offer commenced on June 16,
2003, received acceptances which increased
Luxottica’s relevant interest in OPSM shares to 50.68%
on August 8, 2003, and was completed on September
3, 2003. At the close of the offer, Luxottica South
Pacific held 82.57% of OPSM’s ordinary shares. As a
consequence of the acquisition, all options and
performance rights were cancelled. As a result of
Luxottica South Pacific Pty Limited acquiring the
majority of OPSM’s shares on August 8, 2003,
OPSM’s financial position and results of operations are
reported in the consolidated financial statements since
August 1, 2003. Results of operations for the seven
day period ended August 7, 2003 were immaterial.
The acquisition was accounted for in accordance with
SFAS 141, and accordingly, the purchase price of Euro
253.7 million or A$ 442.7 million (including
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17,023
90,034
113,212
14,717
2,161
340,858
34,657
(101,020)
(52,200)
(135,340)
(128,691)
(104,155)
91,256
466,790
558,046
approximately A$ 7.2 million of direct acquisitionrelated
expenses) was allocated to the assets
acquired and liabilities assumed based on their fair
value at the date of the acquisition. The Company
uses many different valuation techniques to determine
the fair value of the net assets acquired including but
not limited to discounted cash flow and present value
projections. Intangible assets are recognized separate
from goodwill if they arise from contractual or other
legal rights or if they do not meet the definition of
separable as noted in SFAS 141. The valuation of
OPSM’s acquired assets and assumed liabilities was
completed in June 2004 without significant changes to
the preliminary valuation. The excess of purchase
price over the net assets acquired (“goodwill”) has
been recorded in the accompanying consolidated
balance sheet. The acquisition of OPSM was made as
a result of the Company’s strategy to expand its retail
business in Asia Pacific area.
The purchase price (including direct acquisitionrelated
expenses) has been allocated based upon the
valuation of the Company’s acquired assets and
liabilities, assumed as follows (reported at the
exchange rate on the date of acquisition):
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