Annual Report 2006 ISS Global A/S

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 January – 31 December. Amounts in DKK millions
11. Acquisition and divestment of businesses
ISS Global made 104 acquisitions during 2006 (103 during 2005). The total purchase price amounted to DKK 4,145 million (DKK
3,020 million in 2005). The total annual revenue of the acquired businesses (unaudited approximate figure) is estimated at
approximately DKK 8,408 million (DKK 4,247 million in 2005) based on expectations at the time of acquisition. The balance sheet
items etc. relating to acquisitions and divestments (including adjustments to acquisitions and divestments in prior years) are specified
below:
Acquisitions and divestments in 2006
Net book
value before
takeover
Goodwill 757
Brands
Customer contract portfolios and related
-
customer relationships 156
Other non-current assets 86
Trade receivables 465
Other current assets 34
Other provisions (67)
Pensions, deferred tax liabilities and minorities -
Long-term debt (1)
Short-term debt (177)
Other current liabilities (452)
Net identifiable assets 2)
801
Hereof previously recognised as associates (61)
Fair value at
takeover
-
-
295
62
465
28
(101)
-
(1)
(177)
(524)
Net identifiable assets (14)
Goodwill 3)
Acquisition of Pacific
Service Solutions Pty Ltd. 1)
Loss/(gain) on divestment of businesses
1,062
-
Acquisition costs, net of tax 4)
(6)
Purchase/(sales) price
Cash and cash equivalents in acquired/
1,042
divested companies (20)
Net purchase/(sales) price 1,022
Changes in deferred payments (9)
Changes in prepayments regarding acquisitions in the coming year
-
Acquisition/divestment costs paid, net of tax 5
Net payments regarding acquisition/
divestment of businesses 1,018
47
(61)
Total acquisitions
Net book
value before
takeover
854
-
153
308
1,312
469
(1)
(178)
(68)
(336)
(1,435)
1,078
Fair value at
takeover
-
9
1,274
351
1,290
443
(166)
(466)
(77)
(337)
(1,533)
788
(61)
727
3,519
-
(101)
4,145
(310)
3,835
(398)
5
95
Total
divestments
The amount of the acquiree's profit or loss since the acquisition date included in the income statement for the period is not disclosed,
since such disclosure is impracticable, as acquired companies are typically merged with (or activities transferred to) existing
companies shortly after completion of the acquisition.
1)
In 2006, only the acquisition of the remaining 51% of Pacific Service Solution Pty Ltd. including Tempo Services Ltd. accounted for more than 2% of ISS
Global's revenue on an individual basis.
2)
Settlement of shareholder loans and senior debt in total of DKK 630 million was considered part of the purchase price.
3)
The following intangibles are subsumed into goodwill; i) assembled workforce, ii) technical expertise and technological know how, iii) training expertise
and training and recruitment programmes and iv) platform for growth. As the Group is a service company that acquires businesses in order to apply the ISS
model and generate value by restructuring and refining the acquired business, the main impact from acquisitions derives from synergies, the value of
human resources and the creation of platforms for growth.
4)
Acquisition costs, net of tax amounting to DKK 101 million related mainly to the acquisitions of San Rafael S.A. and Tap New S.A. in Mexico, Puissance
Air in France, Debeos GmbH in Germany, Pegasus Security Holding Ltd. in the United Kingdom, Pacific Service Solution Pty Ltd. in Australia and MPA
Securitas Ltd. in Thailand.
Continues
_____________________________________________________________________________________________________________
ANNUAL REPORT 2006 / Consolidated Financial Statements
64
3,537
-
-
-
(68)
(10)
(22)
(1)
2
-
-
9
(90)
-
(90)
-
6
-
(84)
1
(83)
13
-
2
(68)