Notes contentsNotes to consolidated financial statements

30. Business combinations


On 2 January 2008 the Group acquired 100% of Money-Media, a US based company offering online news and commentary for the money management industry. On 30 January 2008 the Group completed its acquisition of 100% of Harcourt Assessment after receiving clearance from the US Department of Justice.

The provisional assets and liabilities arising from acquisitions are as follows:

All figures in £ millions         2008   2007
Notes Harcourt
Assessment
Fair value
Money-Media
Fair value
Other
Fair value
Total
Fair value
Total
Fair value
Property, plant and equipment 10 6 6   11
Intangible assets 11 174 10 36 220   197
Intangible assets — Pre-publication 20 27 27   18
Inventories   7 7   15
Trade and other receivables   48 2 4 54   28
Cash and cash equivalents   5 11 16  
Trade and other liabilities   (40) (4) (8) (52)   (38)
Financial liabilities — Borrowings     (1)
Current income tax liabilities   (3) (3)   4
Net deferred income tax liabilities 13 (4) (4)   (45)
Provisions for other liabilities and charges 23 (19) (7) (26)   (2)
Minority interest   (2) (2)  
Assets held for sale   3 3  
Net assets acquired at fair value   211 8 27 246   187
Goodwill 11 113 25 15 153   304
Total   324 33 42 399   491
Satisfied by:              
Cash   (321) (33) (40) (394)   (468)
Deferred consideration     (12)
Net prior year adjustments   (3) (2) (5)   (11)
Total consideration   (324) (33) (42) (399)   (491)
               
Carrying value of net assets/(liabilities) acquired   81 (2) (1) 78   41
Fair value adjustments   130 10 28 168   146
Fair value   211 8 27 246   187

The goodwill arising on the acquisition of Harcourt Assessment and Money-Media results from substantial cost and revenue synergies and from benefits that cannot be separately recognised, such as the assembled workforce. The fair value adjustments relating to these acquisitions were finalised during 2008.

Harcourt Assessment

All figures in £ millions Carrying
value
Fair
value adjs
Fair value
Property, plant and equipment 7 (1) 6
Intangible assets 10 164 174
Intangible assets — Pre-publication 35 (8) 27
Inventories 8 (1) 7
Trade and other receivables 50 (2) 48
Cash and cash equivalents 5 5
Trade and other liabilities (39) (1) (40)
Provisions for other liabilities and charges (3) (16) (19)
Assets held for sale 8 (5) 3
Net assets acquired at fair value 81 130 211
Goodwill     113
Total     324

Money-Media

All figures in £ millions Carrying
value
Fair
value adjs
Fair value
Intangible assets 10 10
Trade and other receivables 2 2
Trade and other liabilities (4) (4)
Net assets acquired at fair value (2) 10 8
Goodwill     25
Total     33

Net cash outflow on acquisition:

All figures in £ millions 2008 2007
Cash — Current year acquisitions (394) (468)
Cash — Acquisitions yet to complete (12)
Deferred payments for prior year acquisitions and other items (5) (4)
Cash and cash equivalents acquired 16
Cash outflow on acquisition (395) (472)

Harcourt Assessment contributed £150m of sales and £25m to the Group’s profit before tax between the date of acquisition and the balance sheet date. Money-Media contributed £9m of sales and £4m to the Group’s profit before tax between the date of acquisition and the balance sheet date. Other businesses acquired contributed £2m to the Group’s sales and £1m to the Group’s profit before tax between the date of acquisition and the balance sheet date.

If the acquisitions had been completed on 1 January 2008, the Group estimates that sales for the period would have been £4,826m and profit before tax would have been £587m.