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Acquisitions
 12 Months Ended
Dec. 31, 2019
Text block [abstract]  
Acquisitions
30. Acquisitions
 
The Group accounts for acquisitions in accordance with IFRS 3 Business Combinations. IFRS 3 requires the acquiree’s identifiable assets, liabilities and contingent liabilities (other than
non-current
assets or disposal groups held for sale) to be recognised at fair value at acquisition date. In assessing fair value at acquisition date, management make their best estimate of the likely outcome where the fair value of an asset or liability may be contingent on a future event. In certain instances, the underlying transaction giving rise to an estimate may not be resolved until some years after the acquisition date. IFRS 3 requires the release to profit of any acquisition reserves which subsequently become excess in the same way as any excess costs over those provided at acquisition date are charged to profit. At each period end management assess provisions and other balances established in respect of acquisitions for their continued probability of occurrence and amend the relevant value accordingly through the consolidated income statement or as an adjustment to goodwill as appropriate under IFRS 3.
 
Goodwill arising from acquisitions represents the value of synergies with our existing portfolio of businesses and skilled staff to deliver services to our clients.
 
Non-controlling
interests in acquired companies are measured at the
non-controlling
interests’ proportionate share of the acquiree’s identifiable net assets.
 
The contribution to revenue and operating profit of acquisitions completed in the year was not material. There were no material acquisitions completed in the year ended 31 December 2019 or between 31 December 2019 and the date the financial statements have been authorised for issue.
 
Acquisitions in 2018
The Group acquired a number of subsidiaries in the year. The following table sets out the book values of the identifiable assets and liabilities acquired and their fair value to the Group. The fair value adjustments for certain acquisitions have been determined provisionally at the balance sheet date.
 
 
  
Book
value at
acquisition
£m
 
 
Fair value
adjustments
£m
 
 
Fair
value
to
Group
£m
 
Intangible assets
  
 
–
 
 
 
40.3
 
 
 
40.3
 
Property, plant and equipment
  
 
3.1
 
 
 
–
 
 
 
3.1
 
Cash
  
 
5.0
 
 
 
–
 
 
 
5.0
 
Trade receivables due within one year
  
 
43.7
 
 
 
–
 
 
 
43.7
 
Other current assets
  
 
20.3
 
 
 
–
 
 
 
20.3
 
Total assets
  
 
72.1
 
 
 
40.3
 
 
 
112.4
 
Current liabilities
  
 
(42.8
) 
 
 
–
 
 
 
(42.8
) 
Trade and other payables due after one year
  
 
(2.4
) 
 
 
(13.5
) 
 
 
(15.9
) 
Deferred tax liabilities
  
 
–
 
 
 
(9.9
) 
 
 
(9.9
) 
Provisions
  
 
–
 
 
 
(0.4
) 
 
 
(0.4
) 
Total liabilities
  
 
(45.2
) 
 
 
(23.8
) 
 
 
(69.0
) 
Net assets
  
 
26.9
 
 
 
16.5
 
 
 
43.4
 
Non-controlling
interests
  
 
 
 
 
 
 
 
 
 
(6.3
) 
Fair value of equity stake in associate undertakings before acquisition of controlling interest
  
 
 
 
 
 
 
 
 
 
(3.1
) 
Goodwill
  
 
 
 
 
 
 
 
 
 
141.6
 
Consideration
  
 
 
 
 
 
 
 
 
 
175.6
 
Consideration satisfied by:
  
 
 
 
 
 
 
 
 
 
 
 
Cash
  
 
 
 
 
 
 
 
 
 
127.4
 
Payments due to vendors
  
 
 
 
 
 
 
 
 
 
48.2
 
 
Goodwill arising from acquisitions represents the value of synergies with our existing portfolio of businesses and skilled staff to deliver services to our clients. Goodwill that is expected to be deductible for tax purposes is £65.3 million.
 
Non-controlling
interests in acquired companies are measured at the non-controlling interests’ proportionate share of the acquiree’s identifiable net assets.
 
The contribution to revenue and operating profit of acquisitions completed in the year was not material.
 
Acquisitions in 2017
The Group acquired a number of subsidiaries in the year. The following table sets out the book values of the identifiable assets and liabilities acquired and their fair value to the Group. The fair value adjustments for certain acquisitions have been determined provisionally at the balance sheet date.
 
 
  
Book
value at
acquisition
£m
 
 
Fair value
adjustments
£m
 
 
Fair
value
to
Group
£m
 
Intangible assets
  
 
0.8
 
 
 
79.0
 
 
 
79.8
 
Property, plant and equipment
  
 
5.5
 
 
 
–
 
 
 
5.5
 
Cash
  
 
28.9
 
 
 
–
 
 
 
28.9
 
Trade receivables due within one year
  
 
74.4
 
 
 
–
 
 
 
74.4
 
Other current assets
  
 
20.1
 
 
 
–
 
 
 
20.1
 
Total assets
  
 
129.7
 
 
 
79.0
 
 
 
208.7
 
Current liabilities
  
 
(76.0
) 
 
 
–
 
 
 
(76.0
) 
Trade and other payables due after one year
  
 
(10.2
) 
 
 
(20.5
) 
 
 
(30.7
) 
Deferred tax liabilities
  
 
–
 
 
 
(16.8
) 
 
 
(16.8
) 
Provisions
  
 
(0.1
) 
 
 
(4.8
) 
 
 
(4.9
) 
Total liabilities
  
 
(86.3
) 
 
 
(42.1
) 
 
 
(128.4
) 
Net assets
  
 
43.4
 
 
 
36.9
 
 
 
80.3
 
Non-controlling
interests
  
 
 
 
 
 
 
 
 
 
(13.9
) 
Fair value of equity stake in associate undertakings before acquisition of controlling interest
  
 
 
 
 
 
 
 
 
 
(5.7
) 
Goodwill
  
 
 
 
 
 
 
 
 
 
314.3
 
Consideration
  
 
 
 
 
 
 
 
 
 
375.0
 
Consideration satisfied by:
  
 
 
 
 
 
 
 
 
 
 
 
Cash
  
 
 
 
 
 
 
 
 
 
213.7
 
Payments due to vendors
  
 
 
 
 
 
 
 
 
 
161.3
 
 
Goodwill arising from acquisitions represents the value of synergies with our existing portfolio of businesses and skilled staff to deliver services to our clients. Goodwill that is expected to be deductible for tax purposes is £63.9 million.
 
Non-controlling
interests in acquired companies are measured at the non-controlling interests’ proportionate share of the acquiree’s identifiable net assets.
 
The contribution to revenue and operating profit of acquisitions completed in the year was not material.