2. BUSINESS COMBINATIONS
Acquisitions in 2015
The Group carried out the following acquisitions in 2015:
Business line Acquired on Ownership %
Digital Consumer Services segment
Autosofta Oy Online service 10/19/15 65
Financial Media and Business Services segment:
JM Tieto Oy Online service 01/01/15 80
Talentum Corporation Media business 11/17/15 100
JM Tieto Oy
The acquisition of JM Tieto Oy was implemented as a business combination achieved in stages. The Group’s prior holding in the company was 20%.
Consideration
MEUR Fair value
Consideration, settled in cash 5.8
Fair value measurement of previous holding at the time of the acquisition 1.1
Total consideration 7.0
The assets and liabilities recorded as a result of the acquisition were as follows:
MEUR Fair value
Property, plant and equipment 0.0
Intangible assets 1.7
Trade and other receivables 0.8
Cash and cash equivalents 0.5
Total assets acquired 3.1
Deferred tax liabilities 0.3
Trade and other payables 0.7
Total liabilities acquired 1.0
Acquired identifiable net assets at fair value, total 2.1
Goodwill 4.9
The fair values entered on intangible assets in consolidation relate primarily to acquired ICT applications and customer agreements. Factors contributing to goodwill were the expected synergies related to these businesses.
Autosofta Oy
Consideration
MEUR Fair value
Consideration, settled in cash 1.6
Contingent consideration 0.3
Total consideration 1.9
The assets and liabilities recorded as a result of the acquisition were as follows:
MEUR
Intangible assets 1.1
Trade and other receivables 0.1
Cash and cash equivalents 0.1
Total assets acquired 1.3
Deferred tax liabilities 0.2
Trade and other payables 0.1
Total liabilities acquired 0.3
Acquired identifiable net assets at fair value, total 1.0
Goodwill 1.0
The fair values entered on intangible assets in consolidation relate primarily to acquired ICT applications and customer agreements. Factors contributing to goodwill were the expected synergies related to these businesses.
Talentum Corporation
Alma Media Corporation and Talentum Corporation agreed to combine their businesses pursuant to a combination agreement signed on 28 September 2015. In the exchange offer, Alma Media Group offered as share consideration 0.25 new Alma Media shares and as cash consideration EUR 0.70 for each Talentum share. The Group offered as option consideration EUR 0.11 for each Talentum series 2013A option right and EUR 0.06 for each Talentum series 2013B option right. The completion of the exchange offer was conditional on the offer being approved by Talentum shareholders representing over 90 per cent of Talentum’s issued and outstanding shares and votes. The business combination was also subject to approval by the competition authorities.

Talentum’s business operations include the publication of professional literature and media for professionals in various fields as well as organising training events and other events on current topics.
The combination is expected to create significant value for the shareholders of both Alma Media and Talentum based on, inter alia, the advantages of having a larger business entity on the digitalising media market, concrete cost synergies and utilising the subscriber potential of the combined company.

The [preliminary] goodwill generated by the acquisition, MEUR 47.8, is related to synergies from the business combination, future technology, future customer relationships and current employees. The goodwill is not tax-deductible.

Talentum was previously consolidated in Alma Media’s consolidated financial statements as an associated company, as the Group held 14,236,295 Talentum shares, which corresponded to 32.4 per cent of the outstanding shares.

The exchange offer was completed on 17 November 2015, from which time Talentum has been part of Alma Media Group. The shares tendered in the exchange offer represented approximately 94.4 per cent of all the shares and votes in Talentum and approximately 95.2 per cent of the issued and outstanding shares in Talentum. The Group issued a demand for redemption to Talentum’s remaining shareholders. In accordance with the demand for redemption, the shares that were not tendered in the exchange offer [or otherwise acquired before the start of the redemption proceedings] will be redeemed via redemption proceedings pursuant to the Finnish Limited Liability Companies Act. The holders of Talentum’s option rights 2013A and 2013B accepted the exchange offer pursuant to its terms and conditions.
Consideration
MEUR Fair value
Share consideration 19.9
Cash consideration 19.3
Option consideration 0.1
Fair value measurement of previous holding at the time of the acquisition 19.5
Consideration liability related to the redemption proceedings pursuant to the Finnish Limited Liability Companies Act 3.0
Total consideration 61.8
On 17 November 2015, the Board of Directors of Alma Media decided, based on the authorisation granted by the Annual General Meeting of 17 March 2015, to issue a total of 6,896,329 new Alma Media Corporation shares as the share consideration for the exchange offer to Talentum shareholders, and to pay a cash consideration totalling MEUR 19.3. The fair value of the issued shares, MEUR 19.9, was based on the share’s published price on 16 November 2015. The expenses arising from the share issue, MEUR 0.8, have been deducted from the amount recognised in equity. Alma Media paid a total of MEUR 0.1 as option consideration to holders of option rights.

The estimated redemption price of the shares to be redeemed pursuant to the Finnish Limited Liability Companies Act, MEUR 3.0, is presented as part of the consideration to be paid for the business combination and as a liability arising from acquisition in the current financial liabilities of the consolidated balance sheet dated 31 December 2015. The estimated redemption price is based on the number of Talentum shares outstanding, 2,103,903 shares, and the estimated redemption price of EUR 1.42 per share, which corresponds to the actual price of the purchase bid. The final redemption price will be determined by arbitration.

The expenses related to the acquisition, MEUR 1.8, are included in Other operating expenses in the consolidated income statement 2015 and in cash flow from operating activities in the consolidated cash flow statement.
The assets and liabilities recorded as a result of the acquisition were as follows:
MEUR Fair value
Non-current assets
Property, plant and equipment 0.6
Intangible assets 35.5
Investments in associated companies and joint ventures 1.1
Financial assets 0.7
Deferred tax assets 0.3
Current assets
Inventories 0.9
Trade and other receivables 10.3
Cash and cash equivalents 2.7
Total assets acquired 52.1
Non-current liabilities
Non-current interest-bearing liabilities 0.8
Other non-current liabilities 0.1
Non-current provisions 0.2
Deferred tax liabilities 7.2
Current liabilities
Current interest-bearing liabilities 3.8
Trade and other payables 25.7
Income tax liability 0.2
Total liabilities acquired 38.0
Acquired identifiable net assets at fair value, total 14.1
Non-controlling interest 0.1
Goodwill 47.8
The fair value of trade and other receivables is MEUR 10.6, and the fair value of the trade receivables included in that figure is MEUR 8.2.

The non-controlling interest in Talentum, MEUR 0.1, is measured at a value that corresponds to the relative share of the identifiable net assets of the acquired entity.

The Group recognised a loss of MEUR 0.4 on the fair value measurement of the Talentum shares it owned before the business combination. The Group owned 14,236,295 shares in Talentum before acquiring a controlling interest based on the purchase bid. The loss arising from the fair value measurement of the shares is included in Other operating expenses in the 2015 income statement.

Talentum’s revenue included in the consolidated comprehensive income statement for the period 1 December–31 December 2015 amounted to MEUR 5.8. Talentum had a minor effect on the result for the financial year.

Taking into account the acquisitions and divestments carried out by Alma Media Group in financial year 2015, the pro forma revenue according to the consolidated income statement would have been MEUR 349.2, and operating profit excluding non-recurring items would have been MEUR 26.6, if the acquisitions and divestments had been completed on 1 January 2015.
Consideration paid for acquisitions - cash flow
MEUR 2015 2014
Paid cash less acquired cash
Cash consideration 26.9 0.8
Asset transfer tax and transaction costs 2.7 0,0
Contingent considerations, effect on profit/loss 0.6
Less acquired amounts
Cash 3.3 0.6
Net cash flow - capital expenditure 26.8 0.2
Acquisitions in 2014
The Group carried out the following acquisitions in the Digital Consumer Services segment in 2014:
Business line Acquired on Ownership
Monster HU Online service 01/03/14 85
Monster PL Online service 01/03/14 85
Monster CZ Online service 01/03/14 85
Alma Career Oy (formerly Monster Oy) Online service 01/03/14 10
Alkali Oy Online service 06/02/14 65
In connection with the Monster arrangement, the name of Monster Oy, an Alma Media associated company, was changed to Alma Career Oy, with Monster Worldwide, Inc. becoming its minority shareholder with a 15% stake. For this share of the company, Monster Worldwide, Inc. transferred its recruitment service operations in Poland, Hungary and Czech Republic to the new company, as well as purchased shares in the company for MEUR 4.7. Alma Media transferred a 15% share of its recruitment operations, including LMC in Czech Republic, CVOnline in the Baltics, Profesia in Slovakia and Czech Republic, and TauOnline in Slovakia. After the transaction, Alma Media Group’s ownership of the new companies is 85%. Monster Worldwide, Inc. has an option to increase its ownership to 20% by 2017. Monster Worldwide, Inc. previously owned 25% of the Monster business in Finland, with Alma Media owning the remaining 75%.
In its 2013 financial statements, Alma Media presented a preliminary acquisition cost calculation for the arrangement, according to which the value of the minority shares transferred was based on Alma Media Group’s book values. In the final recognition of the arrangement, the value of the minority share was determined based on fair values. The tables below show how the arrangement affected the balance sheet of Alma Media Group.
Monster HU, Monster PL, Monster CZ, Alma Career Oy
MEUR
Fair value share of disposed businesses (increase of non-controlling interest) 12.2
Consideration, settled in cash -4.7
Consideration total 7.5
Monster HU, Monster PL, Monster CZ
MEUR Fair values entered in integration
Property, plant and equipment 0.3
Intangible assets 0.8
Trade and other receivables 0.5
Cash and cash equivalents 0.3
Assets, total 1.9
Deferred tax liabilities 0.2
Trade and other payables 0.7
Total 0.8
Total identifiable net assets at fair value 100% 1.1
Total identifiable net assets at fair value 85% 1.0
Cash and cash equivalents of acquired subsidiaries or businesses 0.3
Goodwill arising on acquisition 3.2
Goodwill*) arising on acquisition of Alma Career Oy (10%) is recorded as adjustment of retained earnings 3.2
*) the amount recognised directly in equity of controlling interest is the amount by which the adjustment to non-controlling interest differs from the fair value of the consideration received.
On 2 June 2014, Alma Media Partners Oy, a subsidiary of Alma Media Group, acquired the entire share capital of Alkali Oy. Alma Media Group previously held a 24.3% stake in the company. The acquisition will be treated in Alma Media’s consolidated financial statements as a business combination achieved in stages. The arrangement did not have a significant effect on Alma Media’s profit or loss at the time of its implementation. The company will be consolidated with Alma Media Group in accordance with the 65% share held by the owners of Alma Media Group’s parent company in Alma Mediapartners Oy, which became the parent company of Alkali Oy as a result of the acquisition.
Alkali Oy
MEUR
Consideration, settled in cash 0.8
Fair value measurement of previous holding at the time of the acquisition 0.7
Total consideration 1.5
MEUR
Property, plant and equipment 0.0
Intangible assets 0.7
Trade and other receivables 0.1
Cash and cash equivalents 0.3
Assets, total 1.2
Deferred tax liabilities 0.1
Trade and other payables 0.2
Total 0.3
Total identifiable net assets at fair value 100% 0.9
Total identifiable net assets at fair value 65% 0.6
Cash and cash equivalents of acquired subsidiaries or businesses 0.3
Goodwill arising on acquisition 0.7
Proceeds on sale recognised through profit or loss from the incremental acquisition 0.0
The fair values entered on intangible assets in integration relate primarily to acquired ICT applications and customer agreements. Factors contributory to goodwill were the expected synergies related to these businesses.