4 ACQUISITIONS

2013

The company acquired the city of Tampere’s asphalt paving business on 2 January 2013. The goodwill recognised from the acquisition comprises of a strengthening the market position in the Pirkanmaa area.

The company acquired the entire share capital of Biomaa Oy on 2 January 2013. Biomaa Oy specialises in mass stabilisation and the treatment of contaminated soil. The goodwill recognized from the acquisition comprises of special expertise in contaminated soil treatment. The acquisition involves a contingent consideration. Biomaa Oy was merged to Lemminkäinen Infra Oy on 1 May 2013.

The company acquired on 2 January 2013, with a single deed, the entire share capitals of three companies: Maanrakennus Katupojat Oy, Bergqvist Oy and Kuljetus Oy Wilkman. The acquirees engage in earthwork contracting, regional development, energy network construction and transport as well as the winter and summer maintenance of roads in Southern Finland. A negative goodwill of EUR 0.1 million was recognized from the acquisition. The acquired companies were merged to Lemminkäinen Infra Oy on 1 May 2013.

The company acquired 80 per cent of the share capital of a Danish company FD-Entreprise ApS on 2 May 2013. FD-Entreprise specialises in the milling of asphalt and concrete road surfaces and operates primarily in eastern Denmark. The goodwill recognized from the acquisition comprises of expanding the company's market area. The acquisition doubles Lemminkäinen's market share in road milling in Denmark and expand the company's market area to cover the entire country. The acquisition involves an option to redeem shares from non-controlling shareholders which is recognised as a liability in the balance sheet.

The company acquired 75 per cent of the share capital of Swedish Landvetterkrossen AB (former Vest Kross AB) on 12 July 2013. Landvetterkrossen AB is a supplier of mineral aggregates. The acquisition involves an option to redeem shares from non-controlling shareholders which has not been recognised as a liability in the balance sheet.

The company acquired the entire share capital of LEC Consultancy JLT on 24 July 2013. The company is domiciled in the United Arab Emirates. The goodwill recognized from the acquisition comprises of special expertise of the company's personnel.

In the year 2013 the recognised fair values of the acquired business operations after merging are presented in the table below.

EUR 1,000 Fair values recognised after merging 2013
Assets

Property, plant and equipment 9,081

Intangible assets 2,867

Available-for-sale financial assets 559

Inventories 885

Current receivables 5,394

Cash and cash equivalents 2,252
Assets, total 21,038


Liabilities

Deferred tax liabilities 153

Interest-bearing liabilities 5,860

Other liabilities 5,304
Liabilities, total 11,317




Non-controlling interests -16


Net assets 9,737

Consideration paid in cash 10,116
Consideration recognised as liability 4,873
Total consideration 14,989



Goodwill 5,252

Goodwill recognised in balance sheet 5,396

Negative goodwill recognized during the accounting period -144

Consideration paid in cash -8,384
Cash of acquired subsidiaries 2,247
Impact on cash flow -6,137

Expensed acquisition expenditure 287


On the consolidation of the acquired business operations, EUR 13.8 million has been recognised in net sales and EUR 0.2 million in operating profit. Full-year net sales of the acquired business operations in 2013 amounted to about EUR 15.1 million and operating profit to about EUR -0.5 million. If the acquirees had been consolidated as from the beginning of the year, consolidated net sales would have been EUR 2,219.5 million and operating profit EUR -91.5 million.

2012

On 5 April 2012 the entire share capital of Commercial Tower North Inc. was acquired. The company specializes in wireless communication related services. The goodwill recognized from this acquisition comprises of an expansion of market area as well as production cost savings.

On 2 July 2012 the entire share capital of Kivinikkarit Oy was acquired. The company specializes in municipal infrastructure contracting. The acquisition of Kivinikkarit Oy strengthens Lemminkäinen’s position in concrete and natural stone contracting in Southern Finland. The goodwill recognized from this acquisition comprises of increase in market share and cost savings in purchase, logistics and production functions. Kivinikkarit Oy was merged to Lemminkäinen Infra Oy on 30 November 2012.

On 31 July 2012 the entire share capital of Wisepro Oy was acquired. The company specializes in weather forecasting technologies for technical building services industry. Wisepro Oy was merged to Lemminkäinen Talotekniikka Oy on 31 December 2012.

On 31 August 2012 the entire share capital of Maanrakennusliike Helander Oy was acquired. The company specializes in earthwork construction. The goodwill recognized from the acquisition comprises of cost savings in purchase, logistics and production functions.

In the year 2012 the recognised fair values of the acquired business operations after merging are presented in the table below.

EUR 1,000 Fair values recognised after merging 2012
Assets

Property, plant and equipment 1,102

Intangible assets 229

Available-for-sale financial assets 58

Inventories 91

Current receivables 653

Cash and cash equivalents 48
Assets, total 2,181


Liabilities

Deferred tax liabilities 276

Interest-bearing liabilities 117

Other liabilities 1,164
Liabilities, total 1,557


Net assets 624

Consideration paid in cash 1,575
Consideration recognised as liability 347
Total consideration 1,922



Goodwill recognised in balance sheet 1,298


Consideration paid in cash -1,575
Cash of acquired subsidiaries 48
Impact on cash flow -1,527

Expensed acquisition expenditure 22


On the consolidation of the acquired business operations, EUR 3.5 million has been recognised in net sales and EUR 0.2 million in operating profit. Full-year net sales of the acquired business operations in 2012 amounted to about EUR 5.0 million and operating profit to about EUR 0.3 million. If the acquirees had been consolidated as from the beginning of the year, consolidated net sales would have been EUR 2,269.1 million and operating profit EUR 50.5 million.