Positioning for the Future | 189
Appendix
Notes to the Financial Statements
Year ended 31 December 2014
32 BUSINESS COMBINATIONS
(cont’d)
(IIHFWV RI FDVK ÁRZV RI WKH *URXS
2014
$’000
Cash consideration paid
766
Assumption of shareholder’s loan
40,643
Purchase consideration
41,409
Less Cash and cash equivalents in subsidiary acquired
(18,360)
Net cash outnow on acquisition
23,049
Measurement of fair value
The valuation technique used for measuring the fair value of the material assets acquired was as follow
Assets acquired
Valuation technique
Development properties for sale
Residual method The valuation of the land is arrived at by deducting
the gross development cost and the developer’s promt from the
gross development value (GDV). The GDV of land is mrst established
by direct comparison method based on preliminary development
scheme and adjusted for the differences between the property
and the comparables to arrive at the market value of the land in its
existing state.
The acquisition-related costs incurred in relation to the acquisition were immaterial.
In 2013, the Group had the following business combination
Acquisition of BSG Holdings Pte Ltd
On 1 July 2013, the Group acquired 100% equity interest of BSG Holdings Pte Ltd (BSGH). BSGH is in the business
of managing and operating four self storage facilities under the brand “Big Orange” in Singapore.
The Group currently operates its self storage business through the “StorHub” brand with seven facilities in Singapore
and two facilities in China. With the acquisition, StorHub becomes the largest self storage company with the widest
location network in Singapore. The acquisition also allows StorHub to capitalise on the complementary strengths
of both platforms.
BSGH contributed revenue of $4.7 million and net promt of $4.1 million to the Group’s results for the period from
1 July 2013 to 31 December 2013. If the acquisition had occurred on 1 January 2013, management estimates
that the contribution from BSGH in terms of revenue and net promt would have been $11.8 million and $6.9 million
respectively. In determining these amounts, management has assumed that the fair value adjustments that arose
on the date of acquisition would have been the same if the acquisition has occurred on 1 January 2013.
Purchase consideration
The consideration for the acquisition was $91.3 million and was settled in cash. No contingent consideration or
indemnimcation asset was recognised at the acquisition date. Both the Group and the acquired entities do not
have a relationship before this acquisition. Therefore, there was no settlement of pre-existing relationship.
Goodwill of $13.2 million was recognised as a result of the difference between consideration transferred and the
fair value of the identimable net assets.
