Wärtsilä Corporation Interim Report Q3 2015

Note

Make a note?

Acquisitions
L-3 Marine Systems International
On 31 May 2015 Wärtsilä acquired L-3 Marine Systems International (MSI) from NYSE-listed L-3 Communications Holdings Inc. The preliminary consideration of the transaction is EUR 298 million.
MSI has extensive experience in supplying automation, navigation and electrical systems, dynamic positioning technology, as well as sonar and underwater communications technology for a variety of vessel types and offshore installations. Wärtsilä’s strong position in the development of technologies that enhance operational efficiency will be further strengthened with the addition of MSI’s broad range of capabilities.
The following tables summarise the preliminary amounts for the consideration paid for MSI, the cash flow from the acquisition and the amounts of the assets acquired and liabilities assumed recognised at the acquisition date.
Preliminary consideration MEUR
Consideration transferred 298
Total consideration transferred 298
Preliminary cash flow from the acquisition MEUR
Consideration paid in cash 298
Cash and cash equivalents of the acquired companies -36
Total cash flow from the acquisition 262
Provisional values of the assets and liabilities arising from the acquisition MEUR
Intangible assets 132
Property, plant and equipment 8
Inventories 129
Trade and other receivables 68
Deferred tax assets 19
Cash and cash equivalents 36
Total assets 392
Provisions 33
Pension obligations 58
Trade payables and other liabilities 122
Deferred tax liabilities 43
Total liabilities 255
Total net assets 136
Preliminary goodwill 161
The preliminary fair values of acquired identifiable intangible assets at the date of acquisition (including technology, customer relationships and trademarks ) amounted to EUR 132 million. The fair value of current trade receivables and other receivables is approximately EUR 68 million. The fair value of trade receivables does not include any significant risk.
The preliminary goodwill of EUR 161 million reflects the value of know-how and expertise in marine electrical & automation. Wärtsilä foresees that the new unit will capture new market opportunities and improve the operational efficiency of its customers. The goodwill recognised for MSI is not tax deductible.
During 2015 the Group incurred acquisition-related costs of EUR 1 million related to external legal fees and due diligence costs. The costs have been included in the other operating expenses in the condensed statement of income. The total acquisition-related costs are EUR 4 million.
During June-September MSI contributed EUR 153 million to order intake and EUR 155 million to net sales. Contribution to the operating result of the Group was not significant. If the acquisition had occurred on 1 January 2015, management estimates that consolidated net sales would have been EUR 3,607 million. The impact in the consolidated operating result for the reporting period would not have been significant. In determining these amounts, management has assumed that the fair value adjustments, which arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January 2015.

Note

Make a note?

Close

For the best experience of our Annual Report, please update your browser to a newer version.