- Independent auditors' report
- Consolidated income statement
- Consolidated statement of recognised income and expense
- Consolidated balance sheet
- Consolidated cash flow statement
- Company balance sheet
- Company statement of recognised income and expense and cash flow statement
- Notes to the financial statements
Notes to the financial statements
41.Business combinations
On 22 August 2008 Glanbia plc acquired a US based sports nutritional business, Optimum Nutrition, Inc. (Optimum). Optimum manufactures, markets and retails whey based, premium nutritional ingredients to the US and global sports nutrition markets.
Details of net assets acquired and goodwill arising from the above business combinations are as follows:
| 2008 €'000 |
|
|---|---|
| Purchase consideration: | |
| - Cash paid | 216,023 |
| - Direct costs relating to the acquisition | 1,919 |
| Total purchase consideration | 217,942 |
| Fair value of assets acquired Goodwill (note 15) | (159,877) |
| 58,065 |
The goodwill is attributable to the profitability and workforce of the acquired business and the benefits associated with the extension of Glanbia's scale and specific capabilities to the acquired business, synergies and other benefits.
The assets and liabilities arising from the acquisition are as follows:
| Fair value €'000 |
Acquiree's carrying amount €'000 |
||
|---|---|---|---|
| Property, plant and equipment (note 14) | 3,389 | 3,389 | |
| Other intangible assets (note 15) | 154,028 | 68 | |
| Inventories | 18,198 | 18,198 | |
| Receivables | 13,097 | 13,097 | |
| Payables | (9,581) | (9,581) | |
| Deferred tax | (19,254) | - | |
| Net assets acquired | 159,877 | 25,171 | |
| Purchase consideration | 217,942 | ||
| Contingent consideration | - | ||
| Cash outflow on acquisition | 217,942 |
The post acquisition impact of Optimum Nutrition, Inc. completed during the year on Group results for the financial year was as follows:
2008 acquisition €'000 |
Group excl acquisition €'000 |
Consolidated Group incl acquisition €'000 |
|||
|---|---|---|---|---|---|
| Revenue | 58,194 | 2,173,967 | 2,232,161 | ||
| Profit before taxation | 9,134 | 90,871 | 100,005 |
The revenue and profit for the financial year determined in accordance with IFRS 3 - Business Combinations as though the acquisition date for the business combination effected during the year had been the beginning of that year, would be as follows:
2008 acquisition €'000 |
Group excl acquisition €'000 |
Pro Forma Group incl acquisition €'000 |
|||
|---|---|---|---|---|---|
| Revenue | 157,741 | 2,173,967 | 2,331,708 | ||
| Profit before taxation | 17,799 | 90,871 | 108,670 |
The fair values assigned to the identifiable assets and liabilities have been determined provisionally due to proximity of the acquisition to year end date. Any adjustments to these provisional valuations will be recognised within 12 months of the acquisition date.
In the year ended 29 December 2007, the Group acquired the business of Pizzey's Milling. Glanbia Nutritionals (Canada), Inc. (Pizzey's Milling), produces and markets nutritional ingredients predominantly derived from flax seed, a primary source of plant based Omega-3 fatty acids.
Final valuation adjustments to the provisional intangible asset valuations were carried out during the year resulting in an adjustment of €3.4 million to intellectual property. In December 2008, the terms of the purchase agreement between Glanbia plc and the previous owners of Pizzey's Milling were revised. On determination of the final deferred consideration, goodwill was revised downwards by €5.5 million. These adjustments were made prospectively in the Group in line with IFRS 3.