Acquisitions of companies

Acquisitions completed as of the 2019/2020 financial year are distributed among the Group’s business areas as follows:

The value of assets and liabilities included in acquisitions from the 2019/2020 financial year have been determined conclusively. There has been no change in the acquired values. According to the adopted acquisition analyses, the assets and liabilities included in the acquisitions for the year were as follows:

The combined consideration for the year’s acquisitions was SEK 1,603 million, of which SEK 1,577 million was, in accordance with adopted ac-quisition analyses, allocated to goodwill and other intangible assets. Had the acquisitions been completed on 1 April 2020, their impact would have been an estimated SEK 1,080 million on consolidated net sales, about SEK 100 million on operating profit and about SEK 80 million on profit after tax.

Addtech uses an acquisition structure with a base purchase price and contingent consideration. The outcome of contingent considerations is dependent on future results achieved in the companies and has a set maximum level. Of contingent considerations for acquisitions during the financial year that are yet to be paid, the discounted value amounts to SEK 205 million. The contingent considerations fall due within three years and the outcome may not exceed SEK 263 million.

For acquisitions that resulted in ownership transfer during the financial year, transaction costs totalled SEK 12 million (7) and are recognised in selling expenses.

Revaluations of contingent considerations had a net negative impact of SEK 9 million (52) on the financial year. The impact on profits is recognised in other operating income and other operating expenses, respectively. No material changes in acquisition analyses were made in the financial year with regard to acquisitions carried out in the year or in previous years.

Consolidated goodwill at the time of the acquisition, regarding the expected future sales trend and profitability, is the amount by which the acquisition value exceeds the fair value of net assets acquired. Goodwill is motivated by the anticipated future sales trend and profitability, as well as the personnel included in the acquired companies. As of 31 March 2021 non-taxable goodwill amounted to SEK 2,727 million, to be compa-red with SEK 1,997 million as of 31 March 2020. The change is attribu-table to acquisitions and exchange differences. Consolidated goodwill is assessed annually for impairment, and no needs for impairment have been identified.

The values allocated to intangible non-current assets, such as supplier relationships, customer relationships, technology and trade marks, were assessed at the discounted value of future cash flows. The amortisa-tion period is determined by estimating the annual decrease in sales attributable to each asset. Supplier relationships, customer relationships and technology are generally amortised over a period of ten years. Trademarks are not amortised but are tested annually in accordance with IAS 36. Annual calculated amortisation regarding intangible non-current as sets for the year’s acquisitions amounts to about SEK 80 million.