3 Scope of consolidation
3.1 Disclosure of interests in other entities
The scope of the consolidation does not include an interest in any of the following:
• Subsidiaries with non-controlling interests
• Joint arrangements
The companies which are included in the consolidated financial statements are listed in the notes to the statutory financial statements of Tecan Group Ltd.
3.2 Change in scope of consolidation: acquisition through business combination
3.2.1 Assets and liabilities arising from acquisitions
The fair value of the identifiable assets and liabilities and the net cash outflow at the date of acquisition were:
Cash and cash equivalents
Trade accounts receivable
Other current assets
Property, plant and equipment
Deferred tax assets
Current financial liabilites
Trade and other accounts payable
Liability for post-employment benefits
Deferred tax liabilities
Total identifiable net assets at fair value
Goodwill arising on acquisition
Consideration transferred for the business combination
Contingent consideration (earn-out)
Net cash outflow
Trade accounts receivable comprise gross contractual amounts due of CHF 0 million (2016: CHF 3.5 million), of which CHF 0 million (2016: CHF 0.3 million) was expected to be uncollectable at the acquisition date.
The acquisitions were accounted for using the acquisition method. The resulting goodwill includes expected synergies from the acquisition, the work force and potentially other intangible assets that could not be valued separately. Goodwill arising from these acquisitions is not expected to be tax deductible.
3.2.2 Acquisition on February 28, 2017: Pulssar Technologies S.A.S.
The Group acquired 100% of the voting rights of Pulssar Technologies S.A.S (Paris, France) on February 28, 2017 to increase the technology portfolio of its ‘Partnering Business’.
At the acquisition date, the fair value of the contingent consideration was estimated to be CHF 1.7 million. The fair value was determined using the discounted cash flow method with a discount rate of 11%. One earn-out payment in the amount of EUR 2.0 million was agreed with the seller upon the achievement of a sales-defined milestone in 2019. The underlying business plan indicated that the entire amount will be payable. There is no change to this assessment at year-end 2017.
3.2.3 Acquisition on September 30, 2016: SPEware Group
The Group acquired 100% of the voting rights of SPEware Group on September 30, 2016 consisting of the following companies:
Participation in %
Baldwin Park/Los Angeles, CA (US)
• Cera Inc.
Baldwin Park/Los Angeles, CA (US)
S = services, holding functions, R = research and development, P = production, D = distribution
The SPEware Group is a provider for mass spectrometry sample preparation solutions, with a focus on the North American market. The acquired Group is part of the business segment ‘Life Sciences Business’.
At the acquisition date, the fair value of the contingent consideration was estimated to be CHF 8.8 million. The fair value was determined using the discounted cash flow method with a discount rate of 10%. Two payments in the amount of USD 5.0 million each were agreed with the seller upon the achievement of sales-defined milestones in 2017 and 2018. The underlying business plan indicated that the entire amount will be payable. There is no change to this assessment at year-end 2017.
3.2.4 Contribution of acquired companies in the year of acquisition and consolidated numbers (unaudited)
Contribution of acquired companies from the date of acquisition
Consolidated numbers, if the acquisition occurred at the beginning of the reporting period
Acquisition-related legal fees and due diligence costs, included in 'general and administration'
- In determining these amounts, management has assumed that the fair value adjustments that arose on the acquisition date would have been the same as if the acquisition had occurred on January 1, 2016 and 2017, respectively.
3.3 Disposal group held for sale
In the second half of 2016, management committed to a plan to sell its manufacturing facility after having transferred all business activities to Männedorf. Accordingly, the facility and the related mortgage are presented as a disposal group held for sale. Efforts to sell the disposal group continue.
At the end of December, the disposal group comprised the following assets and liabilities:
Land and buildings in Hombrechtikon, Zurich (CH)
Assets held for sale
Liabilities held for sale
Land and buildings are valued at the lower of their carrying amount and fair value less costs to sell. At year-end 2017, the Group recognized an impairment charge on buildings in the amount of CHF 0.5 million in accordance with IFRS 5.