13 - Business combinations
Accounting policies
The Group conducts acquisitions on an ongoing basis. Acquisitions qualifying as business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, which is measured at acquisition date fair value, and the amount of any non-controlling interests in the acquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurred and included in other expenses in profit or loss. The acquisition date is the date the group obtains control over the acquiree.
The Group determines that it has acquired a business when the acquired set of activities and assets include an input and a substantive process that together significantly contribute to the ability to create outputs. An acquired process is considered substantive if it is critical to the ability to continue producing outputs, or the inputs acquired include an organized workforce with the necessary skills, knowledge, or experience to perform that process or it significantly contributes to the ability to continue producing outputs or is considered unique or scarce or cannot be replaced without significant cost, effort, or delay in the ability to continue producing outputs.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. At the date of acquisition, assets and liabilities of the acquiree are measured at fair value.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of IFRS 9 Financial Instruments, is measured at fair value with the changes in fair value recognized in the statement of profit or loss in accordance with IFRS 9. Other contingent consideration that is not within the scope of IFRS 9 is measured at fair value at each reporting date with changes in fair value recognized in profit or loss.
Goodwill is initially measured at cost (being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests and any previous interest held over the net identifiable assets acquired and liabilities assumed). If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognized at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognized in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. The Group recognizes three cash generating units: Building Projects, Building Services and Specialty clusters.
2023
Acquisition Breedveld Schröder B.V and Hermans Elektra B.V
On October 27, 2023, the Group completed the 100% share acquisition of Breedveld Schröder B.V and Hermans Elektra B.V. These entities operate in the service and maintenance sector. The total consideration for this acquisition, including an earn-out arrangement, amounted to approximately € 15.6 million. The transaction brought an estimated € 12 million in goodwill, which is not tax-deductible. Currently, the Group is conducting a Purchase Price Allocation to distinguish identifiable intangible assets from goodwill.
Approximately € 2.5 million and € 1.1 million of net revenue and net income have been consolidated in Unica Group's consolidated financial statements for this acquisition for the months of November and December 2023, respectively.
Acquisition of Tenergy Portfolio Services B.V., Engine Competence Services B.V., Tenergy Engineering B.V. and Tenergy Consulting B.V.
On June 16, 2023, the Group obtained control over the Tenergy Group, consisting of Tenergy Portfolio Services B.V., Engine Competence Services B.V., Tenergy Consulting B.V. and Tenergy Engineering B.V. The total consideration for this acquisition, including an earn-out arrangement, amounted to approximately € 15.4 million. The transaction involved € 6.2 million of non-deductible goodwill and € 5.0 million of intangible fixed assets (net of deferred tax liability), which are not tax-deductible. A third party retains a non-controlling interest in one of the 4 acquired entities (see table in Note 1).
Approximately € 3.3 million and € 0.1 million of net revenue and net income have been consolidated for this acquisition for the months July 2023 to December 2023 in Unica Group's consolidated financial statements.
The combined acquisition costs of the two acquisitions amount to approximately € 0.5 million and have been fully recognized in the consolidated statement of profit or loss of Unica Groep B.V.
2022
Acquisition Working Spirit B.V. and EAL B.V.
In 2022, the Group acquired Working Spirit, an IT staffing firm, and EAL, a provider of security management solutions. The acquisitions cost € 15.3 million and € 14.6 million, respectively.
The cumulative fair value of the net identifiable assets obtained and liabilities assumed from these acquisitions stood at € 6.7 million on a provisional basis, resulting in an amount of goodwill totaling € 23.2 million. This goodwill is not tax-deductible.
The combined acquisition costs amounted to approximately € 0.2 million and have been recognized in full in Unica Groep B.V.'s consolidated statement of profit or loss for the year ended December 31, 2022.