| Acquisitions | ||
| Transas Group | ||
| In May, Wärtsilä acquired 100% of Transas, a global company headquartered in the U.K. Transas is a global market leader in marine navigation solutions that include complete bridge systems, digital products and electronic charts. The company is also a leader in professional training and simulation services, ship traffic control, as well as monitoring, and support. | ||
| The following tables summarise the preliminary amounts for the consideration paid for Transas, 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 | 183 | |
| Total consideration transferred | 183 | |
| Preliminary cash flow from the acquisition | MEUR | |
| Consideration paid in cash | 183 | |
| Cash and cash equivalents of the acquired company | -12 | |
| Total cash flow from the acquisition | 171 | |
| Provisional values of the assets and liabilities arising from the acquisition | MEUR | |
| Intangible assets | 66 | |
| Property, plant and equipment | 2 | |
| Inventories | 8 | |
| Trade and other receivables | 50 | |
| Deferred tax assets | 2 | |
| Cash and cash equivalents | 12 | |
| Total assets | 140 | |
| Provisions | 3 | |
| Interest-bearing debt | 29 | |
| Trade payables and other liabilities | 39 | |
| Deferred tax liabilities | 13 | |
| Total liabilities | 83 | |
| Total net assets | 57 | |
| Preliminary goodwill | 113 | |
| The preliminary fair values of the acquired identifiable intangible assets at the date of the acquisition (including technology, customer relations, and trade marks) amounted to EUR 55 million. The fair value of the current trade receivables and other receivables is approximately EUR 50 million. The fair value of the trade receivables does not include any significant risk. | ||
| The preliminary goodwill of EUR 113 million reflects the value of know-how and expertise in digital marine solutions and services. The acquisition takes Wärtsilä a significant step closer to achieving its mission of enabling sustainable societies with smart technologies. It will also speed delivery on the company’s promise to disrupt the industry by establishing an ecosystem that is digitally connected across the entire supply chain, through applications that are secure, smart and cloud-based. | ||
| During 2018 the Group incurred acquisition-related costs of EUR 3 million related to external legal fees and due diligence costs. The costs have been included in the other operating expenses in the consolidated statement of income. | ||
| Pro forma | ||
| If the acquisition had occurred on 1 January 2018, management estimates that the consolidated net sales would have been EUR 5,213 million. The impact in the consolidated operating result would not have been significant. In determining these amounts, management has assumed that the fair value adjustments, which arose on the date of the acquisition would have been the same if the acquisition had occurred on 1 January 2018. | ||
| Other acquisitions | ||
| In February, Wärtsilä acquired 100% of Trident B.V. and LOCK-N-STITCH Inc. In October, Wärtsilä acquired 100% of Burriel Navarro, S.L. | ||
| Trident B.V. is a Netherland based company specialised in underwater ship maintenance, inspection, and repair services. With this acquisition, Wärtsilä builds in-house competence, captures the full potential of services’ product synergies, and strengthens its position in the market. | ||
| LOCK-N-STITCH Inc. is an American engineering company serving customers within the marine and energy sectors as well as other industries. It specialises in cast iron repairs. The acquisition strengthens Wärtsilä’s service portfolio for customers operating multiple brands. | ||
| Burriel Navarro, S.L is a company operating in underwater services in the main ports of Spain. The acquisition supports the growth of Wärtsilä’s underwater services and expands the company’s local presence in the European market. | ||
| The following tables summarise the preliminary amounts for the consideration paid, the cash flow from the acquisitions and the amounts of the assets acquired and liabilities assumed recognised at the acquisition dates. | ||
| Preliminary consideration | MEUR | |
| Consideration transferred | 27 | |
| Total consideration transferred | 27 | |
| Preliminary cash flow from the acquisitions | MEUR | |
| Consideration paid in cash | 23 | |
| Contingent consideration | 4 | |
| Cash and cash equivalents of the acquired companies | -1 | |
| Total cash flow from the acquisitions | 26 | |
| Provisional values of the assets and liabilities arising from the acquisitions | MEUR | |
| Intangible assets | 10 | |
| Property, plant and equipment | 2 | |
| Inventories | 1 | |
| Trade and other receivables | 6 | |
| Cash and cash equivalents | 1 | |
| Total assets | 19 | |
| Trade payables and other liabilities | 4 | |
| Deferred tax liabilities | 3 | |
| Total liabilities | 6 | |
| Total net assets | 13 | |
| Preliminary goodwill | 13 | |
| The preliminary fair values of acquired identifiable intangible assets at the dates of the acquisitions (including technology, customer relations, and trade marks) amounted to EUR 10 million. The fair value of current trade receivables and other receivables is approximately EUR 6 million. The fair value of the trade receivables does not include any significant risk. | ||
| The preliminary goodwill of EUR 13 million reflects the value of know-how and expertise in advanced underwater services. | ||
| During 2018, the acquisition-related costs the Group incurred related to external legal fees and due diligence costs were insignificant. The costs have been included in the other operating expenses in the consolidated statement of income. | ||
| Pro forma | ||
| If the acquisitions had occurred on 1 January 2018, management estimates that the consolidated net sales would have been EUR 5,176 million. The impact in the consolidated operating result would not have been significant. In determining these amounts, management has assumed that the fair value adjustments, which arose on the dates of the acquisitions would have been the same if the acquisitions had occurred on 1 January 2018. | ||
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