Business combinations during the period

Businesses acquired   Nature of business   Operating segment   Date acquired   Rm  
Pentagon Ford   Based in the UK, this relates to three dealerships that primarily retail Ford motor vehicles.   Retail and Rental   December 2018   266  
Individually immaterial acquisitions               102  
                368  

FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED AT DATE OF ACQUISITION*

  Pentagon
Ford
Rm
  Individually
immaterial
acquisitions
Rm
  Total
Motus
Rm
 
ASSETS            
Property, plant and equipment 103   5   108  
Investments and other financial instruments   35   35  
Inventories 127   68   195  
Trade and other receivables 1     1  
Deferred tax assets   13   13  
Income tax assets   68   68  
  231   189   420  
LIABILITIES            
Interest-bearing borrowings 15   32   47  
Other financial liabilities   2   2  
Trade and other payables and provisions   89   89  
  15   123   138  
Net assets acquired 216   66   282  
Purchase consideration transferred (cash paid) 266   102   368  
Excess of purchase price over net assets acquired 50   36   86  
* The initial accounting for the business combinations is incomplete and based on provisional figures.

Process involved with obtaining control

The acquisitions related to the purchase of the underlying assets and liabilities of businesses. The underlying businesses were included into Motus as operating divisions.

Reasons for the acquisitions

The acquisitions are in line with the group’s objective of increasing market penetration globally, through achieving economies of scale via selective acquisitions in local and international markets that complement the group’s existing networks.

Acquisition costs

Acquisition costs for business acquisitions concluded during the year amounted to R4 million and have been recognised as an expense in profit or loss in the “other non-operating items” line.

Impact of the acquisition on the results of the group

From the dates of acquisition, the businesses acquired during the period contributed revenue of R151 million and after tax loss of R4 million. Had all the acquisitions been consolidated from 1 July 2018, they would have contributed revenue of R1 099 million and an after tax loss of R11 million (including the after tax impact of funding costs). The group’s total revenue would have been R40 327 million and an after tax profit of R872 million (also including the after tax impact of funding costs).

Other details

Trade and other receivables had gross contractual amounts of R1 million. None of the goodwill is deductible for tax purposes.