135
CIMIC Group Limited Annual Report 2016 |
Financial Report
Notes continued
for the 12 months to 31 December 2016
29. ACQUISITIONS AND DISPOSALS OF CONTROLLED ENTITIES AND BUSINESSES
CONTINUED
Acquisitions – Sedgman Pty Limited
On 23 February 2016, CIMIC Group Investments Pty Ltd, a controlled entity of the Company, increased its ownership interest in Sedgman
Pty Limited (Sedgman), an entity formerly listed on the ASX, to 51% and thereby gained control of Sedgman. As at 31 December 2015, the
Group’s ownership interest in Sedgman was 37%. The acquisition of Sedgman shares was made under an unconditional off-market
takeover offer for Sedgman. CIMIC Group Investments Pty Ltd subsequently increased its ownership interest in Sedgman to 90% and
exercised its right to compulsorily acquire the remaining shares in Sedgman, which was completed on 13 April 2016.
Purchase consideration to 23 February 2016
$m
Cash paid on date of obtaining control
5.7
Fair value of previously held equity interest
104.6
Total purchase consideration to 23 February 2016
110.3
The value of assets and liabilities recognised as a result of the acquisition are as follows:
Fair value on
acquisition
$m
Cash and cash equivalents
91.7
Trade and other receivables
73.8
Other current assets
4.0
Investments accounted for using the equity method
6.3
Other investments
0.4
Property, plant and equipment
16.4
Intangibles
13.1
Current and deferred tax
4.3
Trade and other payables
(86.6)
Provisions
(23.7)
Interest bearing liabilities
(4.5)
Net identifiable assets / (liabilities)
95.2
Less: non-controlling interests
(46.4)
Add: Goodwill
61.5
Net assets / (liabilities) acquired
110.3
The goodwill is attributable to the future profitability and expertise of Sedgman, as well as the synergies expected to be achieved between
Sedgman’s mineral processing activities and the Group’s mining operations. No goodwill is deductible for tax purposes.
The acquisition has been accounted for under Accounting Standard AASB 3
Business Combinations
. For the acquisition of Sedgman the
Group elected to recognise the non-controlling interests at fair value.
The revaluation of CIMIC’s previously held investment to fair value resulted in a gain on remeasurement of $25.4 million. In addition the
associates reserve of $21.2 million was recycled from equity to profit and loss, resulting in a total gain on acquisition before tax of
$46.6 million (refer to Note 3
: Expenses
).
The contribution by Sedgman to the Group from the acquisition date to the end of the period ended 31 December 2016 was $223.7 million
of revenue. Had the acquisition occurred on 1 January 2016, Sedgman’s contribution to the Group for the year ended 31 December 2016
would have been $255.7 million revenue. The business is now integrated with mining operations and reported within the mining and
mineral processing segment (refer to Note 31:
Segment information
), as such it is not possible to assess the contribution of the business
to profit for the year.
135
