2016 Annual Report For Web 7.3MB

Cash and cash equivalents —
Accounts receivable 1,246
Inventory 748
Prepaid expenses and other assets 160
Property, plant and equipment 4,123
Intangible assets
Distribution network 443
Brand name 968
Goodwill 8,636
Accounts payable and accrued liabilities (4,448)
Income taxes payable (500)
Deferred tax liability (94)
Other liabilities (301)
Purchase consideration 10,981
The goodwill of $8,636 comprises the value of the assembled workforce
and other expected synergies arising from the acquisition.
The fair value of the accounts receivable acquired is $1,246. This
consists of the gross contractual value of $1,496, less the estimated
amount not expected to be collected of $250.
As a result of conditions present at the acquisition date, in January of
2017, the Company reached an agreement in principle with the vendor
whereby, for consideration of $1.6 million, the earn-out provisions
under the share purchase agreement were eliminated and all amounts
due to the vendor were extinguished. From amounts previously
recorded, this agreement in principle resulted in the elimination of the
contingent consideration liability of $2,667, the accrual of a current
liability of $1,639 at December 31, 2016 and a reduction in non-cash
contingent consideration expense of $87.
The purchase price allocation has been updated for the revised
purchase price and the finalization of the fair value of net assets
acquired, resulting in changes to all assumed assets and liabilities, with
the exception of property, plant and equipment.
$
From the date of acquisition, Entringer contributed to the 2016 results
$6,811 of revenue and $1,975 of net loss. If the acquisition had taken
place as at January 1, 2016, revenue from continuing operations in 2016
would have increased by an additional $1,096 and profit from continuing
operations in 2016 would have decreased by an additional $1,819.
The impacts on the cash flows on the acquisition of Entringer are as
follows:
Cash paid 9,342
Due from vendor 1,639
Purchase consideration 10,981
The allocation of the purchase price to acquired assets and liabilities is
preliminary, utilizing information available at the time the consolidated
financial statements were prepared. The final allocation of the purchase
price and the working capital adjustment may change when more
information becomes available.
Transaction costs related to the Entringer acquisition in the year ended
December 31, 2016 were $372 [2015 – nil] and are included in selling,
general and administrative expenses.
[E] NUVISION INDUSTRIES INC. [“NUVISION”]
Effective April 1, 2016, the Company acquired 100% of the outstanding
shares of NuVision, a Canadian-based designer and builder of complete
turnkey fertilizer blending plants and material handling facilities. The
acquisition of NuVision provides a significant additional step in AGl’s
strategic entry into the fertilizer sector.
The purchase has been accounted for by the acquisition method with
the results of NuVision included in the Company’s net earnings from the
date of acquisition. The assets and liabilities of NuVision on the date of
acquisition have been recorded in the consolidated financial statements
at their estimated fair values:
$
101 CONSOLIDATED FINANCIAL STATEMENTS
FIELD TO CONSUMER
2016 ANNUAL REPORT
CONSOLIDATED FINANCIAL STATEMENTS 102