Vetoquinol Universal Registration Document 2019

70   Vetoquinol  Universal Registration Document 2019  Financial report 6 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements 6.5.7 Business combinations 6.5.7.1 Business combinations completed in 2018 In July 2018, the Vetoquinol Group acquired a majo- rity stake in Farmvet Systems Ltd. (76.90%). A start-up based in Northern Ireland, Farmvet Systems harnesses its digital expertise in order to enhance the role of the vet on cattle farms. This acquisition was financed entirely with equity (cash). The purchase price allocation was complete as of December 31, 2019, and the Group recognized and valued the intangible assets. Regarding the remaining shares (23.10% of capital stock), the Group entered into a put/call agreement with the minority shareholders with the intention of acquiring the entire capital stock by the end of 2021. The value of the put/call option was revised in 2019 and currently stands at €2.1 million as of December 31, 2019 (€2.6 million at 2018 year-end). €000 TOTAL Acquisition of majority stake in Farmvet 3,734 Value of put/call option relating to the subsequent acquisition of Farmvet shares 2,552 VALUE OF IDENTIFIED ASSETS AND LIABILITIES AS OF ACQUISITION DATE (147) Currency differences (60) GOODWILL AT DEC 31, 2018 6,373 Value of acquired assets identified in 2019 2,750 Value of deferred tax identified in 2019 (472) Value of put/call option relating to the subsequent acquisition of Farmvet shares (555) Currency differences 238 GOODWILL AT 12/31/2019 3,777 6.5.7.2 Business combinations completed in 2019 On April 15, 2019, Vetoquinol acquired Clarion Biocien- cias, a veterinary drug manufacturer based in Goias state, Brazil. Founded in 1998, Clarion Biociencias develops, manufactures and distributes medicines and non-medicinal products mainly for the livestock market. Thanks to its location in the heart of Brazil’s cattle-bree- ding region, the firm is strongly positioned in this species segment, which represents over 50% of the Brazilian animal health market, as well as in internal and external parasiticides. Clarion Biociencias employs around 200 people including a 70-strong sales force. Thanks to this acquisition, the Vetoquinol Group is set to significantly strengthen its foothold in Brazil, the world’s third largest animal health market. As of 31 December 2019, the purchase price allocation was still underway; excluding easily identifiable assets and liabilities (property, plant and equipment, invento- ries, receivables and payables), the entire premium on acquisition is posted to goodwill. Regarding the remaining shares (10% of capital stock), the Group entered into a put/call agreement with the minority shareholders with the intention of acquiring the entire capital stock by the end of 2022. This put/call option was valued at €5.6 million as of December 31, 2019. €000 TOTAL Acquisition of majority stake in Clarion 51,978 Value of put/call option relating to the subsequent acquisition of Clarion shares 5,606 VALUE OF IDENTIFIED ASSETS AND LIABILITIES AS OF ACQUISITION DATE 4,981 Currency differences (2,687) GOODWILL AT 12/31/2019 49,915