2017 WEL Networks
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Annual Report
58
WEL NETWORKS LIMITED
Notes to the financial statements
For the year-ended 31 March 2017
(continued)
20 BUSINESS COMBINATIONS
On 31 August 2016, the Group acquired the remaining 65% of A shares not already owned by the Group, obtaining full
control over Ultrafast Fibre Limited (UFF) to benefit from future synergies. Goodwill relates to the value of operational
efficiencies and opportunities for significant growth of the fibre network and long-term profitability.
The following table summarises the provisional consideration and the fair value of assets acquired and liabilities assumed
at the acquisition date.
31 August
2016
$’000
Total consideration transferred
Consideration paid for remaining A shares acquired
117,942
Cash consideration
117,942
Provisional fair value of previously held interest
267,674
Total provisional consideration
385,616
Provisional fair value of asset acquired
Cash and cash equivalents
6,282
Other current assets
18,372
Property, plant and equipment
371,862
Current liabilities
(68,049)
Deferred tax liabilities
(2,297)
Goodwill
59,446
Total identifiable net assets
385,616
A gain of $87.9 million has been recorded on re-measurement of the previously held interest.
UFF would have contributed revenue and profit after tax of $17.9 million and $(0.5) million for the 7 months to 31 March
2017. Had they been acquired on 1 April 2016 UFF would have contributed revenue and profit after tax of $28.6 million
and $0.3 million for the 12-month period.
A loss of $3.4 million was recorded through expenses relating to amounts unable to be settled on pre-existing contractual
relationship with UFF following the acquisition. Offsetting this is the release of a provision for costs associated with the
same pre-existing contractual relationship amounting to $4.5 million that are now deemed recoverable.
Transaction costs associated with the acquisition amounted to $3.2 million.
