Note 5 Business combinations
2021
During 2021 Peab acquired 90 percent of the shares in HGT AS. The company has been 100 percent consolidared through application of the anticipated acquisition method since there is a put/call option for the acquisition of the rest of the shares. HGT is a general contractor in civil engineering and is domiciled in Bergen. Peab has also acquired 100 percent of the shares in Frøseth AS. Frøseth operates in mineral aggregates, paving, transportation and recycling in the Trøndelag area in the middle of Norway. During the year the assets and liabilities of Snells Entreprenad AB, which has concrete and mineral aggregates operations in the Luleå area, were acquired.
The above acquisitions in 2021 individually had no material acquisition effects from the Group’s perspective and information on acquisition effects is given collectively.
In the period after the acquisitions the above subsidiaries and operations contributed by SEK 155 million to Group revenue and SEK -5 million to Group profit/loss in 2021. If the acquisitions had occurred on January 1, 2021, the combined effect of these acquisitions on Group revenue would have been SEK 276 million and SEK -9 million on Group profit/loss.
Effects of acquisitions in 2021
The acquisitions’ effects on Group assets and liabilities are shown below. Acquisition analyses may be adjusted during a twelve month period.
Goodwill primarily consists of human resources and future synergy effects regarding common systems and shared resources which do not meet the criteria for recognition as intangible assets at the time of acquisition.
Total transferred compensation amounted to SEK 239 million.
During the year assets have also been acquired through share acquisitions (asset acquisitions that are not business combinations) which resulted in a cash flow of SEK -240 million and primarily refer to project and development properties with development rights in Sweden and Norway.
The acquired companies’ net assets at the time of acquisition:
| MSEK | 2021 | 2020 | |
| Mkr | 2021 | 2020 | |
| Intangible assets | Immateriella anläggningstillgångar | 59 | 211 |
| Tangible assets | Materiella anläggningstillgångar | 189 | 1,636 |
| Other financial assets | Övriga finansiella anläggningstillgångar | – | 71 |
| Deferred tax recoverables | Uppskjutna skattefordringar | – | 158 |
| Project and development properties and inventories | Projekt- och exploateringsfastigheter samt varulager | 39 | 695 |
| Accounts receivable and other receivables | Kundfordringar och övriga rörelsefordringar | 62 | 359 |
| Liquid funds | Likvida medel | 28 | 59 |
| Interest-bearing liabilities | Räntebärande skulder | -36 | – |
| Interest-bearing liabilities (leasing) | Räntebärande skulder (leasing) | -55 | -361 |
| Shareholder loan to the selling company (acquired receivables) 1) | Ägarlån till säljande bolag (förvärvade fordringar) 1) | – | -746 |
| Deferred tax liabilities | Uppskjutna skatteskulder | -29 | -57 |
| Provisions | Avsättningar | -5 | -371 |
| Accounts payable and other current liabilities | Leverantörsskulder och övriga rörelseskulder | -41 | -608 |
| Net identifiable assets and liabilities | Netto identifierbara tillgångar och skulder | 211 | 1,046 |
| Group goodwill | Koncerngoodwill | 28 | 1,397 |
| Consideration transferred | Överförd ersättning | 239 | 2,443 |
1) Acquired receivables are recognized at the seller’s nominal value and are settled in Peab against acquired liabilities for the corresponding amount.
Settled consideration
| MSEK | 2021 | 2020 | |
| Mkr | 2021 | 2020 | |
| Liquid funds | Likvida medel | 230 | 2,443 |
| Option liabilities/Promissory note | Optionsskuld/säljarrevers | 9 | – |
| In addition redemption of shareholder loans to the selling company | Tillkommer lösen av aktieägarlån till säljande bolag | – | 746 |
| Total settled consideration | Totalt reglerad ersättning | 239 | 3,189 |
Acquisitions after the balance sheet date
No substantial acquisitions have been made during 2022 as of the presentation of these financial reports.
2020
Acquistion of Nordic paving and mineral aggregates operations
On July 4, 2019 Peab signed a contract to acquire YIT’s paving and mineral aggregates operations in the Nordic region. The transaction was conditional on approval from competition authorities as well as the fulfillment of certain contractual conditions. At the end of March 2020 the transaction was approved by the competition authorities. The take over took place on April 1, 2020. Through the acquisition Peab expanded its presence in Sweden, Norway and Finland and became established in the paving business in Denmark, giving Peab a unique and market leading position in this business in the Nordic region. The acquisition also entailed taking over some 2,000 employees, some 200 strategically located quarries along with 63 production asphalt plants in the Nordic region. The operations are primarily integrated into the companies Peab Asfalt and Swerock. For the paving business this entailed establishing operations in Finland and Denmark. It also provides conditions for further expansion and development in other operations such as Recycling and Concrete.
The transaction was a combination of a share purchase and an asset deal. The total transferred remuneration from Peab was SEK 3,184 million, divided into SEK 2,438 million in transferred remuneration for shares and assets as well as SEK 746 million in redemption of shareholder loans to the seller.
During the nine months the acquisition was part of the Group it contributed by SEK 5,891 million to Group income and SEK 222 million to profit for the period (including financing costs and depreciation of surplus values but not including acquisition costs and transfer tax in Finland). If the acquisition had taken place on January 1, 2020 it would have contributed by SEK 6,197 million to Group income and SEK -26 million to profit for the year (including financing costs and depreciation of surplus values but not including acquisition costs and transfer tax in Finland). Acquisition costs and transfer tax in Finland were SEK 95 million, of which SEK 40 million were reported in 2019. The costs were recognized as sales and administration costs and in the cash flow analysis in current operations.
The acquisition analysis was approved during the fourth quarter 2020. The difference between the preliminary acquisition analysis and the approved analysis was that intangible assets were reduced by SEK 68 million and tangible assets increased correspondingly. Other differences were not consequential.
Other acquisitions
An asset acquisition of Burlöv Municipality’s operation and maintenance operations took place in 2020. In the period after the acquisition the operation contributed by SEK 13 million to Group revenue and SEK 0 million to Group profit in 2020. If the acquisition had occurred on January 1, 2020, the effect of this acquisition on Group revenue would have been SEK 14 million and SEK 0 million on profit for the year.
During 2020 assets were acquired through share acquisitions (asset acquisitions that are not business combinations) which resulted in a cash flow of SEK -147 million and refered primarily to project and development properties with development rights in Sweden and Norway.