On 25 May 2018, the Group acquired the business of Glassman High Voltage Inc. The principal activity of Glassman High Voltage Inc. is that of a designer and manufacturer of high voltage, high power, power supplies. In addition, the acquisition also includes the purchase of Glassman's small European sales business (XP Glassman Europe Limited formerly known as Glassman Europe Limited). The Group made the acquisition because Glassman and the Group share several customers, and while there is no direct overlap in product lines, the power supply solutions of the two companies are highly complementary. Glassman's products and engineering capabilities will enhance the Group's ability to implement its strategy of winning a greater share of business from its largest customers by achieving wider vertical penetration of key accounts. As well as a product offering suitable for an array of applications used by some of the Group's existing customer base, Glassman will also bring a number of new customers to the Group.
Details of the consideration paid, the assets acquired and liabilities assumed, the effects on the cash flows of the Group, at the acquisition date, are as follows:
| £ Millions |
(a) Purchase consideration | |
| Cash paid | 35.7 |
| Total purchase consideration | 35.7 |
| Consideration transferred for the business | 35.7 |
(b) Effect on cash flows of the Group | |
| Cash paid (as above) | 35.7 |
| Less: cash and cash equivalents in subsidiary acquired | (0.2) |
| Cash outflow on acquisition | 35.5 |
(c) Identifiable assets acquired and liabilities assumed
| Provisional fair values
recognised on acquisition
2018
£ Millions |
| Cash | 0.2 |
| Property, plant and equipment (Note 13) | 3.0 |
| Technology, Customers' Relationships, Contracts and Brand (included in intangibles – Note 12) | 15.7 |
| Inventories | 2.3 |
| Trade receivables | 2.7 |
| Total assets | 23.9 |
| |
| Trade and other payables | (0.7) |
| Total liabilities | (0.7) |
| |
| Total identifiable net assets | 23.2 |
| Add: Goodwill (Note 11) | 12.5 |
| Consideration transferred for the business | 35.7 |
(d) Acquisition-related costs
Acquisition-related costs of £0.4 million are included in "administrative expenses" in the consolidated statement of comprehensive income and in operating cash flows in the consolidated statement of cash flows for the year ended 31 December 2018.
(e) Acquired receivables
The fair value of trade receivables is £2.7 million and all of which is expected to be collected.
(f) Provisional fair values
The fair value of the acquired identifiable intangible assets of £15.7 million (Brand, Technology, Customers' Relationships and Contracts) has been provisionally determined pending final valuations for those assets.
(g) Goodwill
The goodwill of £12.5 million arising from the acquisition is attributable to the distribution network in America and Europe and the synergies expected to arise from the economies of scale in combining the operations of the Group with those of Glassman High Voltage Inc. and XP Glassman Europe Limited.
(h) Revenue and profit contribution
The acquired business contributed revenue of £6.9 million and net profit of £1.4 million to the Group from the period from 25 May 2018 to 31 December 2018. Had Glassman High Voltage Inc. and XP Glassman Europe Limited been consolidated from 1 January 2018, consolidated revenue and consolidated profit before tax for the year ended 31 December 2018 for the Group would have been £201.5 million and £38.7 million respectively.