2016_Halma_ARA_160610_2

Notes to the Accounts continued
24 ACQUISITIONS continued
(C) Firetrace USA, LLC.
Non-current assets
Book value
£000
Fair value
adjustments
£000
Intangible assets 1,784 35,479 37,263
Property, plant and equipment 342 55 397
Current assets
Inventories 7,721 2,768 10,489
Trade and other receivables 5,405 (518) 4,887
Cash and cash equivalents 107 – 107
Total assets 15,359 37,784 53,143
Current liabilities
Trade and other payables (2,064) 20 (2,044)
Provisions (50) (700) (750)
Non-current liabilities
Deferred tax – (2,629) (2,629)
Total liabilities (2,114) (3,309) (5,423)
Net assets of businesses acquired 13,245 34,475 47,720
Total
£000
STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
Initial cash consideration paid 72,675
Initial consideration repayable (607)
Total consideration 72,068
Goodwill arising on acquisition 24,348
On 5 October 2015 the Group acquired the entire interest in Firetrace USA, LLC and its subsidiary companies for a total cash
consideration of US$110,000,000 (£72,675,000), adjustable based on the closing date net assets. The adjustment was determined to
be US$nil. No contingent consideration is payable. It is estimated that US$919,000 (£607,000) of this consideration will be repaid.
Firetrace, based in Scottsdale, Arizona, USA, designs and manufactures automatic fire detection and suppression systems for
installation in small enclosed environments to protect people and critical assets. It will continue to operate out of its current facilities and
existing management will remain in place. Firetrace has become part of the Infrastructure Safety sector and further extends the Group’s
product offering within the fire protection industry.
The excess of the fair value of the consideration paid over the fair value of the assets acquired is represented by customer related
intangibles of £28,686,000; technology related intangibles of £3,861,000; and trademarks, brands and patents of £4,715,000 with
residual goodwill arising of £24,348,000. The residual goodwill represents:
a) the technical expertise of the acquired workforce;
b) future business from new customers; and
c) the opportunity to develop new technologies and products to support future growth.
The Firetrace acquisition contributed £15,257,000 of revenue and £2,404,000 of profit after tax for the year ended 2 April 2016. If this
acquisition had been held since the start of the financial year, it is estimated that the Group’s reported revenue and profit after tax would
have been £11,444,000 and £2,978,000 higher respectively.
Halma plc Annual Report and Accounts 2016 143 141