20% - Assa Abloy

ASSA ABLOY
Annual Report 2007
84
Note 35 cont.
Pemko
On 1 January 2007 the Group acquired 100 percent of the
share capital of Pemko Manufacturing Company, a leading
North American producer of door components. The acquisition
of Pemko brings into ASSA ABLOY a well recognized
and highly respected producer of door components. The
Pemko product line is complementary to ASSA ABLOY’s
existing product offerings and distribution channels. The
company has its headquarters in Ventura, California, from
where most of the business is conducted. The brand has
been separately recognized and remaining goodwill is
chiefly related to synergies and other intangible assets not
qualifying for separate recognition.
Aontec
On 3 July 2007 the Group acquired 100 percent of the
share capital of Aontec Teoranta, one of the world’s largest
suppliers of RFID inlays for electronic passports. The acquisition
expanded the customer base, provided ASSA ABLOY
with yet another secure site for our operations and added
complementary manufacturing technologies for RFID
inlays. Aontec designs and manufactures RFID inlays mainly
for European passport printers and security integrators. The
operations are conducted in high-security premises in Ireland.
Intangible assets in the form of customer relationships
and licenses have been separately recognized.
Remaining goodwill is chiefly related to synergies and other
intangible assets not qualifying for separate recognition.
Baodean
On 1 October 2007 the Group acquired 70 percent of Baodean,
a leading Chinese lock company. Baodean manufactures
and distributes anti-theft door locks and cylinders
mainly for the Chinese market. The company leads the market
segment of high-security anti-theft door locks and cylinders
in China and has developed an extensive support
and service network. Baodean is located in the Zhejiang
region, south of Shanghai. Based on a preliminary purchase-price
allocation, the brand has been separately recognized
and remaining goodwill is chiefly related to synergies
and other intangible assets not qualifying for separate
recognition.
iRevo
On 12 October 2007 the Group acquired more than 50
percent of the share capital of iRevo, a Seoul-listed company
and market leader in digital door locks. The acquisition
brings benefits to the ASSA ABLOY Group including a
market-leading position in Korea, access to efficient distribution
channels in the residential sector and ability to leverage
on ASSA ABLOY’s global distribution network. Based
on a preliminary purchase-price allocation, the brand has
been separately recognized and remaining goodwill is
chiefly related to synergies and other intangible assets not
qualifying for separate recognition.
2006 (SEK M) Fargo Other Total
Cash paid, including
direct acquisition costs 2,486 1,000 3,486
Unpaid parts of purchase prices – 67 67
Total purchase price 2,486 1,067 3,553
Fair value of acquired net assets –939 –351 –1,290
Goodwill 1,547 716 2,263
Acquired assets and liabilities in accordance
with purchase price allocations
Intangible assets 708 120 828
Tangible assets 30 100 130
Inventories 46 139 185
Receivables 83 160 243
Cash and cash equivalents 313 56 369
Interest-bearing liabilities – –39 –39
Other liabilities –241 –185 –426
Acquired net assets at fair value 939 351 1,290
Fair value adjustments,
intangible assets –708 –118 –826
Fair value adjustments,
deferred taxes etc 288 44 332
Acquired net assets at book
value 519 277 796
Purchase price settled in cash 2,486 1,000 3,486
Cash and cash equivalents in
acquired subsidiaries –313 –56 –369
Change in Group cash and
cash equivalents resulting
from acquisitions 2,173 944 3,117
Net sales from times of
acquisition 306 687 993
EBIT from times of acquisition 58 84 142
Net income from times of
acquisition –3 35 32
Acquired entities had total net sales of SEK 1,580 M in
2006. Fargo Electronics was the largest acquisition in 2006,
while Adams Rite and Baron were the most important
among the other acquisitions.
Fargo Electronics
On 3 August 2006 the Group acquired 100 percent of the
share capital of Fargo Electronics, a world-leading company
in systems for secure issuance of ID cards including card
printers, peripheral equipment and software. The acquisition
will make possible a unique offering of products and
services for secure issuance of identity and authorization
cards. Fargo is the only manufacturer to offer three completely
different printing technologies – High-Definition
Printing (reverse image), Direct-to-Card printing (dye-
sublimation) and CardJet Printing technology (inkjet) – to
meet the requirements of customers on different markets.
Fargo has a comprehensive patent portfolio that protects
these different technologies. Intangible assets in the form
of technology, brands and customer relationships have
been reported separately. Remaining goodwill lies mainly
in synergies and intangible assets that do not meet the
criteria for separate reporting.