Year 2017

2. Acquired and divested businesses

 

Acquired businesses 2017

Posti acquired HR Hoiva Oy in January 2017. HR Hoiva Oy provides home care and personal assistance services for municipalities, joint municipal authorities and private customers. HR Hoiva's net sales in 2016 were approximately EUR 2.5 million. The acquisition cost was EUR 2.2 million, of which the contingent earn-out component recognized in liabilities amounted to EUR 1.0 million. The goodwill arising from the acquisition amounts to EUR 0.8 million. The goodwill is generated by the opportunities generated by the expansion to a new business area and geographically. The company has been renamed as Posti Kotipalvelut Oy in March.

           

Early-morning delivery of newspapers operated by Kaakon Viestintä transferred to Posti. Transfer of business became effective May 31, 2017 and concerned about 400 employees. As supported by Posti’s strategy, the acquisition strengthened the services offered in early-morning delivery of newspapers and related business will expand to regions of Lappeenranta, Kotka, Kouvola, Mikkeli and Savonlinna. Purchase price was EUR 0.5 million. The acquisition did not have a material impact on the Group’s income statement or balance sheet.

           

Posti Home Services acquired personal assistance business from SOL Henkilöstöpalvelut on June 30, 2017. The business offers services in the regions of Helsinki capital area, Kouvola, Kuusamo and Tornio. The business has about 200 employees. The purchase consideration EUR 1.2 million was paid in June and the acquisition did not have a material impact on the Group’s income statement or balance sheet.

           

On July 13, 2017 OpusCapita acquired the Swiss Billexco AG which operates in e-invoicing markets. The acquisition strengthens the buyer-supplier network and expands geographical reach. Billexco is a portal for electronic invoice exchange in both business-to-business and business-to-government markets. Purchase price was EUR 0,2 million. Acquisition did not have a material effect on Group's income statement or balance sheet.

           

The assets and liabilities recognized as a result of the acquisition are as follows

Effect on assets

       

Acquired businesses total

EUR million

       

Fair value

Intangible assets

       

4.1

Property, plant and equipment

       

0.2

Deferred tax asset

       

0.0

Inventory

       

0.0

Receivables

       

0.5

Cash and cash equivalents

       

0.2

Effect on assets

       

5.1

           

Effect on liabilities

         

EUR million

         

Deferred tax liability

       

0.4

Non-current liabilities

       

0.0

Trade payables and other liabilities

       

1.2

Effect on liabilities

       

1.5

Net assets acquired

       

3.5

           

Components of acquisition cost

         

EUR million

         

Cash considerations

       

3.3

Earn-out consideration (estimate)

       

1.0

Total cost of acquisition

       

4.3

Fair value of net assets acquired

       

3.5

Goodwill

       

0.8

           

Cash flow effect of the acquisition

         

EUR million

         

Purchase price paid in cash

       

3.1

Cash and cash equivalents of the acquired subsidiary

       

0.2

Cash flow

       

-2.9

           

Earn-out considerations paid for the earlier accounting period business acquisitions

       

-6.5

Cash flow total

       

-9.4

           

Business divestments in 2017

In September 2017, OpusCapita divested its Finance and Accounting Outsourcing business to Norwegian private equity investor Longship. The net sales of the business in 2016 was approximately EUR 30 million. In total 800 employees in 8 countries transferred to Longship. The transaction had a one-off negative impact, amounting to EUR 10.1 million, on the Group's result.

           

Acquired businesses 2016

           

The assets and liabilities recognized as a result of the acquisitions are as follows

           

Assets acquired

         

EUR million

jCatalog

MaxiPost

Veine

Kovalainen

Fair value total

Intangible assets

15.3

0.1

2.3

0.7

18.4

Property, plant and equipment

0.2

0.0

2.6

5.3

8.1

Deferred tax assets

0.0

0.0

0.0

0.1

0.1

Inventory

0.0

0.0

0.0

0.1

0.1

Receivables

2.3

0.9

7.2

1.9

12.3

Cash and cash equivalents

3.0

0.0

0.9

0.0

4.0

Assets acquired

20.8

1.1

13.0

8.0

42.9

           

Liabilities acquired

         

EUR million

         

Deferred tax liability

5.1

0.0

0.3

0.1

5.5

Interest-bearing liabilities

0.2

0.0

8.1

3.8

12.1

Trade payables and other liabilities

3.5

1.1

6.8

2.9

14.2

Liabilities acquired

8.7

1.1

15.2

6.8

31.9

Net assets acquired

12.1

0.0

-2.2

1.2

11.0

           

Components of purchase consideration

         

EUR million

         

Purchase price

31.2

0.4

4.3

1.8

37.7

Contingent consideration

0.0

0.7

2.3

1.0

3.9

Total consideration

31.2

1.1

6.6

2.7

41.6

Fair value of net assets acquired

12.1

0.0

-2.2

1.2

11.0

Goodwill

19.2

1.1

8.8

1.6

30.6

           

Purchase consideration – cash outflow

         

EUR million

         

Purchase price paid in cash

31.2

0.4

4.3

1.8

37.7

Cash and cash equivalents of the acquired subsidiary

3.0

0.0

0.9

0.0

4.0

Net outflow of cash – investing activities

-28.2

-0.4

-3.4

-1.7

-33.7

           

Earn-out considerations paid for the earlier accounting period business acquisitions

       

-3.1

Cash flow total

       

-36.8

           

MaxiPost

         

Posti Group's subsidiary, Posti Global Ltd, acquired a Russian courier company OOO MaxiPost on 17th March, 2016. MaxiPost offers courier services to Russian companies, employing approximately 250 people.

           

The acquisition cost was EUR 1.1 million, of which the contingent earn-out component reconized in liabilities is EUR 0.7 million. The goodwill arising from the acquisition totals EUR 1.2 million. The acquisition related transaction costs are included in other operating expenses in the income statement and in operating cash flow in the statement of cash flows.

           

jCatalog

         

In April 2016, OpusCapita acquired a German-based software company jCatalog Software. jCatalog Software’s solutions in the areas of eCommerce, catalog management, procurement process and supplier management will complement OpusCapita’s extended purchase to pay offering. jCatalog Software is headquartered in Dortmund, Germany and has operations in Europe and in the USA with some 130 professionals.

           

The purchase consideration amounted to EUR 31.2 million. The expenses of the consultation and valuation services related to the preparatory phases of the transaction are recognized under other operating expenses. The goodwill arising from the acquisition amounts to EUR 19.2 million. The goodwill is justified as the acquisition supports OpusCapita’s strategy to build a global buyer-supplier ecosystem offering and expands its geographical reach.

           

Veine

         

In August 2016, Posti acquired the entire share capital of Veine, a company operating in food logistics. Veine Group companies operate in Finland and have about 130 employees.

           

The purchase consideration amounted to EUR 6.6 million, including a contingent earn-out component recognized as liabilities amounting to EUR 2.3 million. The acquisition related transaction costs are included in other operating expenses in the income statement and in operating cash flow in the statement of cash flows.

           

The goodwill totaling EUR 8.8 million represents the synergies in services and operations. The goodwill is justified as the acquisition supports Posti’s strategy to grow in food logistics. Posti and Veine can together offer competitive and nationwide food logistics solutions.

           

Kovalainen

         

In October 2016, Posti acquired the entire share capital of Kovalainen, a company operating in food logistics. Kuljetus Kovalainen is a Finnish transportation company, which has net sales of around EUR 15 million and a personnel of approximately 180.

           

The purchase consideration amounted to EUR 2.7 million, including a contingent earn-out component recognized as liabilities amounting to EUR 1.0 million. The expenses of the consultation and valuation services related to the preparatory phases of the transaction are recognized under other operating expenses.

           

The goodwill arising from the preliminary acquisition amounts to EUR 1.6 million.The goodwill is justified as the acquisition supports Posti’s strategy to grow in food logistics. Joining forces with Kovalainen enables Posti to offer extensive logistics services in Northern Finland, Ostrobothnia and Lapland.

           

Business and subsidiary divestments in 2016

         

In August 2016, Posti sold Kiinteistö Oy Linnakalliontie located in Pirkkala. Posti will continue operations in the real estate with a long term leasing contract.

           

OpusCapita Group has sold the business operations serving the local markets in the Baltic Countries to BaltCap 11 Jan, 2016. The transaction consisted of OpusCapita AS (Estonia), OpusCapita AS (Latvia) and UAB OpusCapita (Lithuania). The divestment did not include OpusCapita competence centers in Baltic Countries serving global business. The divestment had one-off positive impact on Group's first quarter result and cash flows.

           

Acquired businesses 2015

Posti Group's subsidiary, OpusCapita Group, acquired Swedish companies Kredithanterarna and Svenska Fakturaköp on April 30, 2015. The acquisitions enable OpusCapita to further broaden its offer of Order-to-Cash products by cash management solutions. The companies add OpusCapita thorough knowledge of the Swedish market in their business segment.

           

The acquisition cost was EUR 5.8 million, of which the contingent earn-out component reconized in long-term liabilities is EUR 1.4 million. The expenses of the consultation and valuation services related to the preparatory phases of the transaction are recognized under other operating expenses.

           

Goodwill arising from the acquisition, totaling EUR 3.6 million, was generated by the substantial synergies in Order-to-Cash services and the possibilities to enter other Nordic markets. Had the acquired business been combined in the consolidated financial statements as of the beginning of the 2015, the Group's net sales in 2015 would have been EUR 1.0 million higher and its results would have increased by EUR 0.2 million.

           

The assets and liabilities recognized as a result of the acquisition are as follows

           

Assets acquired

         

EUR million

       

Fair value

Intangible assets

       

2.5

Property, plant and equipment

       

0.0

Receivables

       

1.0

Cash and cash equivalents

       

0.4

Assets acquired

       

4.0

           

Assumed liabilities

         

EUR million

         

Deferred tax liability

       

0.5

Non-current liabilities

       

0.4

Trade payables and other liabilities

       

0.8

Assumed liabilities

       

1.7

Net assets acquired

       

2.2

           

Components of purchase consideration

         

EUR million

         

Purchase price

       

4.4

Contingent consideration

       

1.4

Total consideration

       

5.8

Fair value of net assets acquired

       

2.2

Goodwill

       

3.6

           

Purchase consideration – cash outflow

         

EUR million

         

Purchase price paid in cash

       

4.4

Cash and cash equivalents of the acquired subsidiary

       

0.4

Net outflow of cash –  investing activities

       

-4.0

           

Business divestments in 2015

Posti Group divested its road freight business in Sweden, Norway and Denmark as well as its international freight operations in Finland to Danish Nordic Transport Group (NTG) on April 30, 2015. Also the shares of a subsidiary KH Fur Oy were sold. The divestment had a one-off negative impact on Group's result and cash flows.