04 | acquisitions and divestments

The acquisitions and divestments of subsidiaries and associates are described below.

4.1. Acquisitions

Acquisitions in 2015: subsidiaries
On 11 September 2015 the acquisition of 100% of the shares of Zorgzuster Nederland B.V. took place.

Zorgzuster Nederland B.V. plays a connecting and facilitating role between individual care recipients and healthcare institutions, on the one hand, and independent healthcare providers, on the other hand. Zorgzuster works predominantly with independent healthcare professionals who provide home care.

The consideration transferred amounted to € 573 and a contingent consideration depending on future revenue was also agreed. This contingent consideration relates to an earn-out commitment and is recognised at fair value at level 3. At the end of 2015 this commitment was valued at zero.

As from the date of the acquisition the assets and liabilities ensuing from the acquisition were valued at real value. The intangible assets identified separately relate to the trademark (€ 112) and customer relationships (€ 97). The fair value of the trademark is based on the expected royalty percentage payable by a third party of use of the brand (level 3). The fair value of the customer relationships was determined based on the expected discounted cash flows achieved with the asset (level 3). The fair value of the other assets and liabilities is equal to the carrying amount. The trade and other receivables were deemed to be fully recoverable as at the date of acquisition.

Goodwill is valued at € 181 and is attributable to the possibility to further expand the existing services in a changing healthcare sector in the Netherlands. The goodwill is not tax deductible.

In 2015 the acquisition contributed € 173 to group revenue and € -119 to group net income. If the acquisition had taken place on 1 January 2015, the contribution would have been € 567 to group revenue and € -344 to group net income.

The transaction fees for the acquisition amounted to € 8 and have been recognised in the income statement as general and administrative expenses.

The acquisition is reported in the General Staffing operating segment in the Netherlands.

The amount of the outflow of cash and cash equivalents in the statement of cash flows as a result of acquisitions is disclosed below:

2015

Consideration transferred

573

Minus: cash and cash equivalents in acquired subsidiary

-8

Outflow of cash and cash equivalents from acquisitions

565

Contingent consideration paid

3,279

OUTFLOW OF CASH AND CASH EQUIVALENTS AS A RESULT OF ACQUISITIONS

3,844

The contingent considerations paid (€ 3,279) relate to acquisitions realised in 2013 and 2014.

Acquisitions in 2015: associates
The following acquisitions in associates took place:

ASSOCIATE

ACQUIRED % OF SHARES

DATE OF ACQUISITION

Speakap Holding B.V.

20%

30 March 2015

Co.Station Brussels NV

25%

21 October 2015

Speakap Holding B.V. is based in the Netherlands and is active in the field of online communications aimed at internal communications using the Speakap platform. Co.Station Brussels NV provides start-up companies with an environment in which they can benefit from the presence of and cooperation with other start-ups. This happens by making office space available where entrepreneurs can work together and learn from each other and by providing targeted courses.

The costs of both investments totaled € 450 and is recognised under financial fixed assets (note 13). When initially recognising these investments goodwill was set at € 892 while on balance the assets and liabilities were set at € - 442.

Acquisitions in 2014: subsidiaries
The following acquisitions in subsidiaries took place:

SUBSIDIARY

ACQUIRED % OF SHARES

DATE OF ACQUISITION

Netwerven B.V.

51%

1 October 2014

Connecting Expertise NV

51%

9 December 2014

Netwerven B.V. advises and helps build and deploy recruitment strategies and optimise recruitment processes. Connecting Expertise NV is an online software services provider of Vendor Management System solutions including an online market place. The financial information provided below is combined and reflects both acquisitions. Agreement was reached with the owners of the companies regarding simultaneous call and put options or a deferred acquisition of the remaining 49% of the shares. These transactions will take place in 2018 and 2019, respectively. Accordingly the risks and rights relating to the companies, with the exception of dividends still payable before transfer of the remaining shares, are borne by the group. The non-controlling interests equal the stake of the non-controlling shareholders in net income.

The consideration transferred for both acquisitions totaled € 9,139, of which € 5,209 is contingent. The contingent costs of acquisition depend on future results achieved and are recognised at fair value according to level 3. They partly consist of earn-out commitments of € 1,275 relating to the acquisition of 51% of the shares. The remaining amount of € 3,934 relates to the call and put option respectively the deferred acquisition. During 2014 the earn-out commitment was increased by € 1,392 as a result of a revaluation based on results achieved in 2014. This adjustment is recognised in the income statement under finance costs.

In the course of 2015 the earn-out commitment was settled for an amount of € 2,413, after which a contingent liability of € 75 remains. At the end of 2015 the contingent costs of acquisition relating to the call and put option and the deferred acquisition of the remaining 49% of the shares, respectively, were valued at € 5,994.

The valuation of the assets and liabilities from acquisitions as at the date of acquisition is disclosed below:

FAIR VALUE 2014

Trademarks

776

Customer relationships

2,546

Software

2,052

Property, plant and equipment

62

Trade and other receivables

1,799

Cash and cash equivalents

208

Deferred tax liabilities

-1,541

Current tax liabilities

-125

Trade and other payables

-1,459

Non-controlling interests

-92

Acquired assets and liabilities

4,226

Goodwill

4,913

Consideration transferred

9,139

The intangible assets identified separately relate to trademarks, customer relationships and software. The fair value of the trademarks is based on the expected royalty percentage payable by a third party for use of the brand (level 3). The fair value of the customer relationships and software is determined based on the expected discounted cash flows achieved with the asset (level 3). The fair value of the other assets and liabilities is equal to the carrying value. Trade and other receivables mainly consists of trade receivables and were deemed to be fully recoverable as from the date on which they were acquired.

The goodwill is attributable to the possibilities that the acquisitions offer the group to expand its online HR services strategy and to the possibilities they offer to increase their added value for their clients. The goodwill is not deductible for tax purposes.

The reconciliation of the outflow of cash and cash equivalents in the statement of cash flows is disclosed below:

2014

Consideration transferred

9,139

Minus: contingent consideration

-5,209

Consideration transferred paid

3,930

Minus: cash and cash equivalents in acquired subsidiary

-208

OUTFLOW OF CASH AND CASH EQUIVALENTS AS A RESULT OF ACQUISITIONS

3,722

In 2014 both acquisitions contributed € 1,431 to group revenue and € 390 to group net income. The contribution would have been € 4,461 to group revenue and € 536 to net income if the acquisitions had taken place on 1 January 2014.

The transaction fees for the acquisitions amounted to € 151 and were recognised in the income statement under general and administrative expenses.

The acquisitions are recognised in de operating segment Online Business Solutions in the Netherlands or Belgium.

Acquisitions in 2014: associate
The following acquisition in an associate took place:

ASSOCIATE

ACQUIRED % OF SHARES

DATE OF ACQUISITION

BC Beheer B.V.

20%

31 October 2014

BC Beheer B.V. (Blue Carpet) is a Dutch company that helps employers and regional and sector-wide HR platforms develop intelligent HR communities for recruitment and selection, the organisation of a flexible shell, the exchange of knowledge and talent, mobility, talent pools and talent development. The acquisition price was € 3,400 and is recognised as financial fixed assets (note 13).

Furthermore a simultaneous call and put option was agreed with a fellow shareholder for the acquisition of another 20% of the shares. These can be exercised for a period of a year as from 31 October 2017. The option is not recognised as a liability from a contingent consideration on the balance sheet as it concerns an associate. The option qualifies as a derivative financial instrument and is recognised on the balance sheet accordingly (note 19).

4.2. Divestments

Divestments in 2015
On 1 August 2015 the activities of Vakcollege were transferred to Stichting Vakmanschap in het Beroepsonderwijs for 1 euro. As a result goodwill was impaired by € 4,097.

Divestments in 2014
No subsidiaries were divested in 2014.

4.2.1. Net income from discontinued activities

The breakdown of net income from discontinued activities in the income statement is disclosed below:

2015

2014

Net income from divestment of General Staffing activities

-166

-1,751

NET INCOME FROM DISCONTINUED OPERATIONS

-166

-1,751

Net income for 2015 and 2014 relates to the settlement of various guarantees issued at the time of the divestment of the General Staffing activities (in June 2013) in Spain, Italy, Austria, Switzerland, Poland and Luxembourg. A cash outflow of € 2,553 took place in 2015 on account of this.