Note 29 - Acquisition of subsidiaries/operations

Acquired units 2006/2007
	Acquisition date
One store in Kristianstad	May 2006
One store in Mariestad	May 2006
One store in Norrköping	June 2006
Two stores in Jönköping	September 2006
Textil Produkter i Gävle AB including two stores	September 2006
Textil Produkter i Falun AB including three stores	September 2006
Hemtextila Produkter i Karlstad AB including two stores	October 2006
Hemtextila Produkter i Varberg AB including five stores	October 2006
Elmgrens Hemtextil i Stockholm AB including six stores	November 2006
Hemtextila Produkter i Helsingborg and Ängelholm AB including three stores	November 2006
Textilvaror i Norrbotten AB including three stores	November 2006
One store in Växjö	March 2007

During May and June 2006, three franchise stores were acquired in Norrköping, Kristianstad and Mariestad through the acquisition of assets and liabilities. The stores have annual sales of SEK 37 M. The purchase price for the stores totaled SEK 13.2 M and was paid in cash. The assets and liabilities in the stores amounted to SEK 5.8 M, resulting in goodwill of SEK 7.4 M. The acquired stores contributed SEK 16.7 M in sales and SEK 3.1 M in operating profit during the fiscal year.

During the period August–November 2006, 26 franchise stores were acquired. The stores are located in Avesta, Boden, Borlänge, Borås (2), Falkenberg, Falun, Gävle (2), Helsingborg (2), Jönköping (2), Karlstad (2), Luleå (2), Stockholm (Kista, Nacka, Sickla and Sollentuna), Uppsala (2), Varberg, Värnamo and Ängelholm. The 26 stores have total annual sales of approximately SEK 280 M. The purchase price for the 26 stores totaled SEK 210.4 M. Net assets and liabilities in the stores amounted to SEK 56.1 M, resulting in goodwill of SEK 154.3 M. No intangible assets other than goodwill and renting rights were identified in the acquisitions. During the 2006/2007 fiscal year, sales were impacted by SEK 95.2 M and operating profit by SEK 16.8 M.

In March 2007, one franchise store was acquired in Växjö through the acquisition of assets and liabilities. The store has annual sales of SEK 21 M. The purchase price for the franchise store totaled SEK 7.6 M and was paid in cash.

It is not practically possible to provide reliable information about how acquisitions completed after June 1 and onward would have affected the Group’s sales and earnings if the above acquisitions had taken place on May 1, 2006. This information has therefore not been included.

			Fair value
	Carrying value	Fair value	reported
2006/2007	before acquisition	adjustment	in the Group
Tangible fixed assets	10,368	—	10,368
Intangible fixed assets	3,760	14,200	17,960
Inventories	39,394	—	39,394
Operating receivables	1,154	—	1,154
Cash and cash equivalents	725	—	725
Provisions	—	– 3,976	– 3,976
Loans	—	—	—
Operating liabilities	1,489	—	1,489
Total identified net assets			64,136
Goodwill			166,409
Total identified net assets including goodwill			230,545
Purchase price			230,545
Less advance			– 43,516
Purchase price paid			187,029
Cash and cash equivalents in acquired companies			– 725
Effect on consolidated cash and cash equivalents			186,304

			Fair value
	Carrying value	Fair value	reported
2007/2008	before acquisition	adjustment	in the Group
Tangible assets	225	—	225
Inventories	1,245	—	1,245
Total identified net assets			1,470
Goodwill			200
Total identified net assets including goodwill			1,670
Purchase price paid			1,670
Effect on consolidated cash and cash equivalents			1,670

During April 2008, one franchise store was acquired in Motala, with annual sales of SEK 6.2 M. The purchase price totaled SEK 1.7 M and was paid in cash. The assets and liabilities in the store amounted to SEK 1.5 M, resulting in goodwill of SEK 0.2 M. The store contributed SEK 0.4 M in sales and SEK 0.0 M in operating profit during the fiscal year.

No intangible assets other than goodwill and renting rights were identified in the acquisitions of franchise stores that took place in the fiscal years 2005/2006, 2006/2007 and 2007/2008. Goodwill values arising in conjunction with these acquisitions represent the value of established businesses and payment for future economic benefits that can be identified in each case and which are also not possible to report separately.

Since Hemtex AB supplied most of the goods that the acquired franchise stores sold, the Group’s sales will not be affected by all of the sales contributions at the consumer level mentioned above. The estimated sales increase for the Group amounts to about half of the acquired sales.

			Fair value
	Carrying amount	Fair value	reported
2008/2009	before acquisition	adjustments	in the Group
Tangible assets	522	—	522
Inventories	1,191	—	1,191
Total identified net assets			1,713
Goodwill			6,500
Total identified net assets including goodwill			8,213
Purchase price paid			8,213
Effect on consolidated cash and cash equivalents			8,213

During June 2009, one franchise store was acquired in Östersund, with annual sales of SEK 5.5 M. The purchase price totaled SEK 8.2 M and was paid in cash. The assets and liabilities in the store amounted to SEK 1.7 M, resulting in goodwill of SEK 6.5 M. The store contributed SEK 5.5 M in sales and SEK 0.9 M in operating profit during the fiscal year.

No intangible assets other than goodwill and renting rights were identified in the acquisitions of franchise stores that took place in the fiscal years 2006/2007, 2007/2008 and 2008/2009. Goodwill values arising in conjunction with these acquisitions represent the value of established businesses and payment for future economic benefits that can be identified in each case and which are also not possible to report separately.

Since Hemtex AB supplied most of the goods that the acquired franchise stores sold, the Group’s sales will not be affected by all of the sales contributions at the consumer level mentioned above. The estimated sales increase for the Group amounts to about half of the acquired sales.