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 following subsidiaries are included in the consolidated financial statements:
Participation in % (capital and votes)
Tecan Schweiz AG
Tecan Trading AG
• Pulssar Technologies S.A.S
Tecan Sales Switzerland AG
Tecan Austria GmbH
Tecan Sales Austria GmbH
Tecan Sales International GmbH
Tecan Landesholding GmbH
• Tecan Deutschland GmbH
• Tecan Software Competence Center GmbH
• IBL International GmbH
Tecan Benelux B.V.B.A.
Tecan France S.A.S.
Tecan Iberica Instrumentacion S.L.
Tecan Italia S.r.l.
Tecan UK Ltd.
Tecan Nordic AB
Tecan US Group, Inc.
Morrisville, NC (US)
• Tecan US, Inc.
Morrisville, NC (US)
• Tecan Systems, Inc.
San Jose, CA (US)
• Tecan SP, Inc. (Ex SPEware Corp.)
Baldwin Park/Los Angeles, CA (US)
• Tecan Genomics, Ltd.
Redwood City, CA (US)
IBL International Corp.
Tecan Asia (Pte.) Ltd.
Tecan (Shanghai) Trading Co., Ltd.
Tecan Japan Co., Ltd.
Tecan Australia Pty Ltd
S = services, holding functions, R = research and development, P = production, D = distribution
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
Non-current financial assets
Property, plant and equipment
Deferred tax assets
Current financial liabilities
Trade and other accounts payable
Income tax payables
Liability for post-employment benefits
Other non-current liabilities
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 1.9 million (2017: CHF 0.0 million), of which CHF 0.4 million (2017: CHF 0.0 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. The initial accounting for the acquisition in the current financial year is provisional and subject to change regarding the valuation of the trade accounts receivables and capitalized tax loss carry-forwards. Further analysis has to be performed in order to confirm the measurement.
3.2.2 Acquisition on August 31, 2018: NuGEN Technologies, Inc. (renamed to Tecan Genomics, Inc.)
The Group acquired 100% of the voting rights of NuGEN Technologies, Inc. (Redwood City/CA, US) on August 31, 2018. NuGEN is a provider for innovative next-generation sequencing (NGS) kits and genomic sample preparation solutions, with a focus on the North American market. The acquired company is part of the business segment ‘Life Sciences Business’.
3.2.3 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 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. At year-end 2018, however, the sales target was considered no longer achievable und the full earn-out liability was derecognized.
3.2.4 Acquisition on September 30, 2016: SPEware Group (renamed to Tecan SP, Inc.)
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 2018. The first instalment in the amount of USD 5.0 million was paid at the beginning of 2018 and the remainder in the amount of USD 5.0 million is due in March 2019.
3.2.5 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, 2017 and 2018, respectively.
- The pre-acquisition period from January to August 2018 includes several million Sw iss Francs in non-recurring expenses for projects (including acquisition related costs) that the former ow ners had undertaken.
3.3 Disposal group held for sale
At the end of December, the disposal group comprised the following assets and liabilities:
Land and buildings in Hombrechtikon, Zurich (CH)
Total assets held for sale
Total liabilities held for sale
3.3.1 Situation in 2017
In the second half of 2016, management committed to a plan to sell its Hombrechtikon manufacturing facility after having transferred all business activities to Männedorf. Accordingly, the facility and the related mortgage were presented as a disposal group held for sale. Land and buildings were 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.
3.3.2 Situation in 2018
In the first half of 2018, the mortgage was repaid and the interest derivative settled. Efforts to sell the facility continue. However, a sale in the next 12 months is no longer considered highly probable. Consequently, the facility is classified as an investment property and valued at cost less accumulated depreciation (cost model). Due to the impairment charge recognized in the previous year, a catch-up of depreciation is not required. The rental income and maintenance cost are reported in other operating result.