5. Business combinations
In the first half of 2023, the scope of consolidation has changed as a result of the following transactions:
Acquisition of Padma AG. On 30 January 2023, Galenica acquired 100% of the shares in the Swiss company Padma AG. Padma AG is the parent company of the Padma Group with its two operating companies Padma Europe GmbH (Austria based) and Padma Deutschland GmbH (Germany based). Padma specialises in the manufacture and distribution of herbal formulations derived from Tibetan medicine.
The total purchase considerations amounted to CHF 23.3 million, of which CHF 20.9 million was settled in cash. A contingent consideration in the amount of CHF 2.4 million was recognised, which is due in 2026 if certain financial and operational targets are achieved. The fair value of the net identifiable asset amounted to CHF 14.2 million at the acquisition date. The goodwill of CHF 9.1 million was allocated to the operating segment Products & Care and corresponds to added value based on the acquirer-specific synergies expected to arise from the acquisition in expanding its complementary medicine portfolio and expanding its range of reimbursable medicines and the know-how of the employees gained. Transaction costs were not material.
Acquisition of pharmacies. Galenica acquired 100% of the interests in pharmacies in various locations in Switzerland. Upon acquisition, the pharmacies were merged with Galenicare Ltd.
The total purchase consideration amounted to CHF 9.7 million, of which CHF 9.1 million was settled in cash. A deferred consideration in the amount of CHF 0.6 million was recognised, which is due in the second half year of 2023. The fair value of the provisional net assets amounts to CHF 0.8 million at the acquisition date. The goodwill of CHF 8.9 million was allocated to the operating segment Products & Care and corresponds to the added value of the pharmacies based on their locations. Transaction costs were not material.
Business combinations
|
in thousand CHF |
Padma |
Pharmacies |
Total |
|
Cash and cash equivalents |
3,170 |
600 |
3,770 |
|
Trade receivables |
1,156 |
210 |
1,366 |
|
Inventories |
3,362 |
676 |
4,039 |
|
Property, plant and equipment |
177 |
– |
177 |
|
Right-of-use assets |
3,815 |
1,873 |
5,687 |
|
Intangible assets |
9,333 |
– |
9,333 |
|
Other current and non-current assets |
275 |
88 |
363 |
|
Trade payables |
–418 |
–450 |
–868 |
|
Lease liabilities |
–3,815 |
–1,873 |
–5,687 |
|
Net deferred tax assets/(liabilities) |
–1,871 |
– |
–1,871 |
|
Employee benefit liabilities |
–378 |
– |
–378 |
|
Other current and non-current liabilities |
–596 |
–282 |
–878 |
|
Fair value of net assets |
14,211 |
842 |
15,053 |
|
Goodwill |
9,074 |
8,863 |
17,937 |
|
Purchase consideration |
23,285 |
9,705 |
32,990 |
|
Cash acquired |
–3,170 |
–600 |
–3,770 |
|
Deferred consideration |
– |
–630 |
–630 |
|
Contingent consideration |
–2,385 |
– |
–2,385 |
|
Net cash flow from current business combinations |
17,730 |
8,476 |
26,206 |
Pro forma figures for acquisitions made in the first half of 2023
Since their inclusion in Galenica's scope of consolidation, the businesses acquired contributed net sales of CHF 6.3 million and an operating result (EBIT) of CHF 0.4 million to the Group's results. If these acquisitions had occurred on 1 January 2023, they would have contributed additional net sales of CHF 1.8 million without a material effect on EBIT.