| Business combinations
Customer base acquisitions
Effective 16 March 2016 the Group acquired its Altech Autopage customer base from Altron TMT (Pty) Limited. During the prior year the Group acquired its Nashua Mobile (Pty) Limited (‘Nashua’) customer base from Nashua.
The acquired customer bases were valued using the multi-excess earning method (‘MEEM’). The MEEM is an income approach to fair value measurement often used when two or more assets work together to generate a cash-flow stream. The MEEM seeks to isolate the cash-flow stream attributable to a specific intangible asset being valued from the asset grouping’s overall cash-flow stream.
| Rm |
2016 |
|
2015 |
|
| Final fair value of net identifiable asset acquired |
(349) |
|
(576) |
|
| Customer base |
(485) |
|
(800) |
|
| Deferred tax |
136 |
|
224 |
|
| Goodwill1 |
(368) |
|
(442) |
|
| Deferred consideration |
144 |
|
– |
|
| Consideration transferred |
(573) |
|
(1 018) |
|
| The amounts of revenue and profit or loss of the acquiree included in the consolidated income statement for the year ended
31 March 2016, as well as the impact on consolidated revenue for the Group if the acquisition date occurred at the beginning
of the annual reporting period, is immaterial. |
|
Note:
1. Goodwill represents future synergies and is allocated to the Group’s South Africa cash generating unit. |
|