80
McPHERSON’S LIMITED
ANNUAL REPORT 2015
NOTE 31. ACQUISITIONS
(A) CURRENT PERIOD
(i)
A’kin, Al’chemy and Lapurete
On 1 December 2014, the Group’s Australian consumer products business finalised its acquisition of the brandnames and associated assets of
natural skincare brands A’kin and Lapurete and natural hair care brand Al’chemy.
Details of the purchase consideration and the assets acquired are as follows:
$’000
Purchase consideration
Cash paid
8,061
Total purchase consideration
8,061
The assets acquired were as follows:
Inventories
787
Property, plant and equipment
17
Brandnames
7,257
Net assets acquired
8,061
Purchase consideration – cash outflow
Cash consideration paid
8,061
Outflow of cash to acquire business assets – investing activities
8,061
(ii) Contingent consideration
At 30 June 2015 the Group was required to reassess the amount of contingent consideration it expects to pay relating to a number of acquisitions
undertaken in prior periods. Based on the facts and circumstances that existed at 30 June 2015 the Group determined that the provision required
to be held was $6,637,000. As a result of this, the Group adjusted down its contingent consideration provision by $6,176,000, after allowing for
costs paid during the year. Of this amount, $4,140,000 has been adjusted against brandname intangible assets, since this amount related to an
asset only acquisition. The other $2,036,000 of the adjustment was required to be recognised in profit or loss as a contingent consideration gain
since this amount related to a business combination transaction. This amount has been separately disclosed within the revenue and other income
section of the Statement of Comprehensive Income and within Note 5(C) Significant Items.
The payment ranges associated with the contingent consideration arrangements that remain outstanding at 30 June 2015 are $0 to $13,500,000
for the Dr. LeWinn’s and Revitanail acquisition and $1,141,000 to $12,507,000 for the Home Appliances acquisition.
Subsequent to year end the Home Appliances contingent consideration payment was finalised for $6,637,000. The contingent consideration
payment associated with the Dr. LeWinn’s and Revitanail acquisition has not yet been finalised due to the vendor raising a dispute over the amount.
Based on the current facts and circumstances of this dispute the payment range remains at $0 to $13,500,000.
NOTES TO AND FORMING PART OF THE
CONSOLIDATED FINANCIAL STATEMENTS CONTINUED