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AfroCentric Group will be acquiring 100% of the dental benefit management company, Dental Information Systems Holdings Proprietary Limited (DENIS Group), effective 1 October 2020.
The acquisition of DENIS Group enables the Group to focus specifically on cost reduction and innovation in the dental treatment offerings to medical scheme members.
The financial effects of this transaction have not been recognised at 30 June 2020. The operating results and assets and liabilities of the acquired company will be consolidated from 1 October 2020.
Details of the consideration transferred are:
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| Purchase consideration |
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| – Cash paid |
170 000 |
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| – Contingent consideration |
– |
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| Total purchase consideration |
170 000 |
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The provisionally determined fair value of the assets and liabilities of the DENIS Group as at the date of acquisition are as follows:
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| Cash and cash equivalents |
139 655 |
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| Property, plant and equipment |
71 635 |
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| Intangible assets |
17 |
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| Intangible assets – customer contracts |
108 616 |
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| Incurred but not reported (IBNR) and claims provision |
(45 459) |
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| Receivables |
5 391 |
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| Payables |
(24 820) |
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| Equity investments |
15 540 |
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| Other financial assets |
174 |
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| Other financial liabilities |
(1 336) |
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| Net deferred tax assets |
(25 843) |
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| Taxation |
3 855 |
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| Dividend payable |
(80 000) |
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| 167 425 |
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| Add: Goodwill |
2 575 |
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| 170 000 |
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The goodwill is attributable to DENIS Group’s strong position and profitability in dental risk management services. None of the goodwill is expected to be deductible for tax purposes.
In particular, the fair values of the assets and liabilities disclosed above have only been determined provisionally as the independent valuations have not been finalised.
It is also not yet possible to provide detailed information about each class of acquired receivable and any contingent liabilities of the acquired entity. |