Boskalis_Annual_Report_2016

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ACQUISITION OF ASSETS AND ACTIVITIES OF STRABAG WASSERBAU 5.2

On 31 March 2016 the Group obtained control of the German dredging activities of STRABAG Wasserbau GmbH (hereinafter referred to as: ‘the STRABAG business’) by means of an asset purchase agreement and payment of the agreed purchase price. Through this transaction the Group acquired relatively new vessels, equipment and related personnel, as well as a few small maintenance contracts. This transaction is classified as a business combination and is included as such in the consolidation. The acquisition of the STRABAG business strengthens the fleet and market position of the Dredging & Inland Infra division. Also, the acquisition of the STRABAG business creates opportunities for synergies and cost savings. As from 31 March 2016 the STRABAG business contributed EUR 8.7 million to the (consolidated) revenue of the Group, which comprises the revenue from the maintenance contracts acquired. The vessels have operated on contracts of the Group. The acquisition has resulted in a positive impact of approximately EUR 3.0 million including the gain from the bargain purchase (see below) and expenses resulting from the integration of the STRABAG business in the Group which is included in the segment result under Dredging & Inland Infra. Had the Group acquired the STRABAG business at the beginning of the year, management estimates that this would not have had an (additional) material impact on the consolidated revenue and result over 2016.

These amounts do not include the transaction costs related to the acquisition.

Consideration paid The consideration paid amounted to EUR 70.7 million in cash.

Identifiable assets acquired and liabilities assumed As a result of the acquisition, the following identifiable assets were acquired and liabilities assumed:

At 31 March 2016

Property, plant and equipment

82,371

Inventory

693

Current liabilities

- 1,388 81,676

Net amount of identified assets acquired and liabilities assumed

The purchase price allocation and valuation of identified assets acquired and liabilities assumed was finalized in the fourth quarter 2016 as an external vessel valuator determined the fair value of the individual vessels (property, plant and equipment) based on the market approach. Bargain purchase The business combination resulted in a gain on acquisition, recognized in Other income in the statement of profit or loss, because the net amount of assets acquired and liabilities assumed is higher than the consideration paid. A gain was expected given the agreement with the seller on the expenses to be borne by Boskalis that do not qualify as an assumed liability under IFRS at 31 March 2016. Before recognizing the gain, the Group reassessed the completeness of assets identified and liabilities assumed, and also reassessed the underlying assumptions and measurement techniques.

At 31 March 2016

70,693 - 81,676 - 10,983

Total consideration paid at 31 March 2016

Less: Net amount of identified assets acquired and liabilities assumed

Result from bargain purchase of business combination

A deferred tax liability of EUR 3.5 million was recognized in the statement of profit or loss regarding the profit relating to the bargain purchase of this business combination amounting to EUR 11.0 million (after tax: EUR 7.5 million). Transactions related to the acquisition The Group incurred costs of EUR 0.1 million for the services of external advisors relating to this transaction. These costs are included in the consolidated statement of profit or loss in the line ‘Raw materials, consumables, services and subcontracted work’ and are incorporated in the segment result under Holding & Eliminations.

ANNUAL REPORT 2016 – BOSKALIS