Note 2 – Business combinations
Acquisition 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 will expand its presence in Sweden, Norway and Finland and become established in the paving business in Denmark and this will give Peab a unique and market leading position in this business in the Nordic region. The acquisition also entails 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 entails 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 is a combination of an asset deal and a share purchase. 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 amortization of shareholder loans to the seller.
During the three months the acquisition has been part of the Group it has contributed SEK 1,741 million to Group income and SEK 62 million to profit for the period (including financing costs but not including acquisition costs and transfer tax in Finland). If the acquisition had taken place on January 1, 2020 it would have contributed SEK 2,047 million to Group income and SEK -186 million to profit for the period (including financing costs but not including acquisition and costs and transfer tax in Finland). Acquisition and costs and transfer tax in Finland were around SEK 95 million, of which SEK 40 million were reported in 2019. The costs are recognized as sales and administration costs and in the cash flow analysis in current operations.
Effects of the acquisition in 2020
The acquired companies' net assets at the time of acquisition:
| Group‚ MSEK | ||
| Koncernen, Mkr | ||
| Intangible assets | Immateriella anläggningstillgångar | 279 |
| Tangible assets | Materiella anläggningstillgångar | 1,563 |
| Other financial assets | Övriga finansiella anläggningstillgångar | 83 |
| Deferred tax recoverables | Uppskjutna skattefordringar | 166 |
| Inventories | Varulager | 666 |
| Accounts receivable and other receivables | Kundfordringar och övriga rörelsefordringar | 359 |
| Liquid funds | Likvida medel | 59 |
| Interest-bearing liabilities (leases) | Räntebärande skulder (leasing) | -361 |
| Shareholder loan to selling company (acquired receivables) 1) | Ägarlån till säljande bolag (förvärvade fordringar) 1) | -746 |
| Deferred tax liabilities | Uppskjutna skatteskulder | -57 |
| Accounts payable and other current liabilities | Leverantörsskulder och övriga rörelseskulder | -983 |
| Net identifiable assets and liabilities | Netto identifierbara tillgångar och skulder | 1,028 |
| Group goodwill | Koncerngoodwill | 1,410 |
| Consideration transferred 2) | Överförd ersättning 2) | 2,438 |
| 1) Acquired receivables are recognized at the seller’s nominal value and is settled in Peab against acquired liabilities for the corresponding amount | 1) Förvärvade fodringar redovisats till säljarens nominella värde och avräknas i Peab mot förvärvade skulder till motsvarande belopp | |
| 2) Cash | 2) Kontant | 2,438 |
| Additional shareholder loans to the selling company | Tillkommer aktieägarlån till säljande bolag | 746 |
Goodwill
The goodwill recognized for the acquisition represents a strong market position, establishment on new markets, synergies with existing operations, further expansion and development of other operations such as Recycling and Concrete as well as a well functioning organization. SEK 87 million of acquired goodwill is tax deductible.
Acquired receivables
The fair value of accounts receivable amounts to SEK 172 million. The gross amount of the receivables amounts to SEK 178 million, of which SEK -6 million is not expected to be settled.
Other acquisitions
During the period other minor acquisitions have been made by the Peab Group but since these are not material no information about them is provided.
Goodwill
| Group‚ MSEK | ||
| Koncernen, Mkr | ||
| Opening acquisition value | Ingående anskaffningsvärde | 1,875 |
| Purchases through acquired companies | Inköp via förvärvade företag | 1,410 |
| Exchange rate differences | Valutakursdifferens | -88 |
| Closing accumulated acquisition value | Utgående ackumulerade anskaffningsvärde | 3,197 |
| Opening write-downs | Ingående nedskrivningar | -39 |
| Write-downs for the year | Årets nedskrivningar | -20 |
| Closing accumulated write-downs | Utgående ackumulerade nedskrivningar | -59 |
| Closing recognized value | Utgående redovisat värde | 3,138 |