Hexagon Annual Report 2019

ACQUISITION OF DIGITAL WAVE CORPORATION IN 2018 With effect from 30 November 2018 Hexagon Composites acquired Digital Wave Corporation. The company include stesting & requalification of high-pressure cylinders (Mobile Pipelines) and is located in Denver, Colorado in USA. The fair value of the identifiable assets and liabilities of the company as at the date of acquisition were: (NOK 1 000) FAIR VALUE RECOGNIZED ON ACQUISITION ASSETS Property, plant and equipment 6 599 Intangible assets 18 864 Cash 980 Inventories 8 234 Deferred tax asset 0 Trade accounts receivable 3 543 Total assets 38 219 LIABILITIES Long term liabilities 0 Short term liabilities 4 521 Deferred tax liabilities 1 049 Total liabilities 5 570 Net identifiable assets and liabilities at fair value 32 649 Goodwill 31 661 Purchase consideration 64 310 Analysis of cash flows on acquisition: Net cash acquired with the subsidiary 980 Cash paid -64 310 DIGITAL WAVE CORPORATION In 2018 Digital Wave Corporation contributed from the date of acquisition to the Group's revenues and profit before tax by NOK 2.8 million and -1.1 million respectively. If the acquisition had occurred at the beginning of 2018, revenues for 2018 and profit before taxes for 2018 for the Group would have been NOK 1 539 million and NOK 188 million respectively. In the Group's profit for 2018, Digital Wave Corporation was included from the acquisition date. The goodwill recognized is primarily attributed to the expected synergies and other benefits from combining the assets and activities of the Digital Wave Corporation with the Hexagon Group. The goodwill is not deductible for income tax purposes. Transaction costs of NOK 0.7 million have been expensed and are included in administrative expenses in the statement of profit and loss and are part of operating cash flows in the statement of cash flows. 28 114 2019 AT A GLANCE FROM THE BOARD ROOM FINANCIAL STATEMENTS