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|
FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED AT DATE OF ACQUISITION*
|Property, plant and equipment||103||5||108|
|Investments and other financial instruments||–||35||35|
|Trade and other receivables||1||–||1|
|Deferred tax assets||–||13||13|
|Income tax assets||–||68||68|
|Other financial liabilities||–||2||2|
|Trade and other payables and provisions||–||89||89|
|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 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).
Trade and other receivables had gross contractual amounts of R1 million. None of the goodwill is deductible for tax purposes.