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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

• Associates

• Joint arrangements

 

The following subsidiaries are included in the consolidated ­financial statements:

 

Company

Registered office

Participation in % (capital and votes)

Share capital 
(LC 1,000)

Currency

Activities

Tecan Schweiz AG

Männedorf/Zurich (CH)

100%

5,000

CHF

R/P/D

Tecan Trading AG

Männedorf/Zurich (CH)

100%

300 

CHF

S/D

  • Pulssar Technologies S.A.S

Paris (FR)

100%

400

EUR

inactive

Tecan Sales Switzerland AG

Männedorf/Zurich (CH)

100%

250

CHF

D

Tecan Austria GmbH

Grödig/Salzburg (AT)

100%

1,460

EUR

R/P

Tecan Sales Austria GmbH

Grödig/Salzburg (AT)

100%

35

EUR

D

Tecan Sales International GmbH

Grödig/Salzburg (AT)

100%

35

EUR

D

Tecan Landesholding GmbH

Crailsheim/Stuttgart (DE)

100%

25

EUR

S

  • Tecan Deutschland GmbH

Crailsheim/Stuttgart (DE)

100%

51

EUR

D

  • Tecan Software Competence Center GmbH

Mainz-Kastel (DE)

100%

103

EUR

R

  • IBL International GmbH

Hamburg (DE)

100%

25

EUR

R/P/D

Tecan Benelux B.V.B.A.

Mechelen (BE)

100%

137

EUR

D

Tecan France S.A.S.

Lyon (FR)

100%

2,760

EUR

D

Tecan Iberica Instrumentacion S.L.

Barcelona (ES)

100%

30

EUR

D

Tecan Italia S.r.l.

Milano (IT)

100%

77

EUR

D

Tecan UK Ltd.

Reading (UK)

100%

500

GBP

D

Tecan Nordic AB

Stockholm (SE)

100%

100

SEK

D

Tecan US Group, Inc.

Morrisville, NC (US)

100%

1,500

USD

S

  • Tecan US, Inc.

Morrisville, NC (US)

100%

400

USD

D

  • Tecan Systems, Inc.

San Jose, CA (US)

100%

26

USD

R/P

  • Tecan SP, Inc. (Ex SPEware Corp.)

Baldwin Park/Los Angeles, CA (US)

100%

472

USD

R/P/D

  • Tecan Genomics, Ltd. 
    (Ex NuGEN Technologies, Inc.)

Redwood City, CA (US)

100%

0

USD

R/P/D

IBL International Corp.

Toronto (CA)

100%

0

USD

inactive

Tecan Asia (Pte.) Ltd.

Singapore (SG)

100%

800

SGD

S

Tecan (Shanghai) Trading Co., Ltd.

Shanghai (CN)

100%

3,417

CNY

D

Tecan Japan Co., Ltd.

Kawasaki (JP)

100%

125,000

JPY

D

Tecan Australia Pty Ltd

Melbourne (AU)

100%

0

AUD

D

 

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:

 

 

28.02.2017

Pulssar

31.08.2018

NuGEN

CHF 1,000

 

 

Cash and cash equivalents

 6 

4,413

Trade accounts receivable

1,516

Inventories

 221 

3,892

Other current assets

 255 

727

Non-current financial assets

322

Property, plant and equipment

 37 

233

Intangible assets

 2,187 

12,722

Deferred tax assets

6,167

 

 

 

Assets

 2,706 

29,992

 

 

 

Current financial liabilities

 (500) 

(279)

Trade and other accounts payable

 (273) 

(10,514)

Accrued expenses

 (63) 

(631)

Income tax payables

(122)

Provisions

 – 

(1,898)

Liability for post-employment benefits

 (38) 

Other non-current liabilities

(22)

Deferred tax liabilities

 (209) 

(526)

 

 

 

Liabilities

 (1,083) 

(13,992)

 

 

 

Total identifiable net assets at fair value

 1,623 

16,000

 

 

 

Goodwill arising on acquisition

 3,021 

32,218

 

 

 

Consideration transferred for the business combination

 4,644 

48,218

 

 

 

Cash acquired

 (6) 

(4,413)

Contingent consideration (earn-out)

 (1,743) 

 

 

 

Net cash outflow

 2,895 

43,805

 

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)

 

 

2017

2018

CHF 1,000

 

 

Contribution of acquired companies from the date of acquisition

 

 

  Months

10

4

  Sales

 1,085

3,119

  Operating profit

 (570)

(4,520)

 

 

 

Consolidated numbers, if the acquisition occurred at the beginning of the reporting period 

 

 

  Sales

 548,724

602,234

  Operating profit1/2

 80,492

80,330

 

 

 

Acquisition-related legal fees and due diligence costs, included in 'general and administration'

 188

952

  1. 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.
  2. 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: 

 

 

Notes

31.12.2017

31.12.2018

CHF 1,000

 

 

 

Land and buildings in Hombrechtikon, Zurich (CH)

17

3,650

 

 

 

 

Total assets held for sale

 

3,650

 

 

 

 

Mortgage

19

1,495

Interest derivative

19

45

 

 

 

 

Total liabilities held for sale

 

1,540

 

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.