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AfroCentric Investment Corporation Limited through its subsidiary AfroCentric Health (RF) Proprietary Limited (“AHL”) has acquired
100% stake in the Dental Information Systems ("DENIS") Group of companies for the purchase price of R170 million.
The purchase consideration for DENIS was R170 million in cash. The acquisition date is 1 October 2020.
Details of the purchase considerations, net assets acquired and goodwill are as follows:
| |
R’000 |
| Purchase consideration: |
|
| Cash |
170 000 |
| Total purchase consideration |
170 000 |
DENIS has been accounted for using the acquisition method of accounting, which requires that the assets and liabilities
of DENIS be measured at fair value as at 1 October 2020.
| |
|
Total
October
2020
R’000 |
| Fair value of 100% net asset value at acquisition (assets) |
|
88 270 |
| Property, plant and equipment |
71 017 |
|
| Intangible assets |
17 |
|
| Investment in cell captive |
17 669 |
|
| Other financial assets |
205 |
|
| Deferred tax asset |
25 076 |
|
| Trade and other receivables |
14 893 |
|
| Cash and cash equivalents |
84 791 |
|
| Trade and other payables |
(31 088) |
|
| Provisions |
(66 555) |
|
| Current tax |
(27 755) |
|
| Customer relationships |
|
65 017 |
| Deferred tax |
|
(18 205) |
| Fair value of 100% net asset value at acquisition (including intangible assets) |
|
135 082 |
| Consideration for Denis Group |
|
170 000 |
| Goodwill arising from acquisition* |
|
34 918 |
| * |
The goodwill arises from integrated synergies that are established through the acquisition of DENIS Group which has been allocated to the Medscheme cash generating business unit. It will not be deductible for tax purposes. |
There were no acquisitions in the year ended 30 June 2020.
The acquired business contributed revenue of R410 million and net profit of R21 million to the Group for the period 1 October 2020
to 30 June 2021.
If the acquisition had occurred on 1 July 2020, consolidated pro-forma revenue and profit for the year ended 30 June 2021
would have been R546 million and R28 million respectively.
These amounts have been calculated using the subsidiary's results and adjusting them for:
- the additional depreciation and amortisation that would have been charged assuming the fair value adjustments to
intangible assets had applied from 1 July 2020, together with the consequential tax effects.
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