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2. Acquired business activities and business divestments

Acquired businesses 2013

No business acquisitions have been carried out during the financial period 2013.

Business divestments in 2013

Itella Corporation sold the entire share capital of Itella Bank Ltd to the Finnish Savings Bank Group in April 2013. Employees transferred from Itella to Bank of Savings Banks Ltd. Gain on disposal EUR 1.6 million has been recognized in other operating income.

Net assets sold

EUR million 12/31/2013
Deposit certificates and other receivables 18.3
Cash and cash equivalents 1.9
Liabilities to the public and public sector entities and other liabilities -7.7
Net assets 12.5
Consideration for the divestment 14.1
Gain on disposal 1.6

Effect on cash flow
EUR million
Consideration paid in cash 14.1
Cash and cash equivalents of the divested company -1.9
Effect on cash flow 12.2

Itella Information sold its printing business in Poland to PostNord in August. As a result of the transaction, 50 employees were transferred from Itella to PostNord. The Group has recognized a loss on disposal totaling EUR 0.2 million in other operating expenses.

Itella Corporation sold its entire shareholding in Logia Software Oy to the management of the company in September. The gain on disposal totaling EUR 0.3 million has been recognized in other operating income.

Acquired businesses 2012

On October 1, 2012, Itella Group's subsidiary Itella Logistics Oy acquired the VR Transpoint's groupage logistics business and entire capital stock of PT Logistiikka Oy. PT Logistiikka Oy operates in warehousing services. In acquisition, Itella Logistics seeks to become the market leader in its service segment. Following the deal, Itella can offer its customers the most comprehensive network of terminals and transportation capacity in the country. Indeed, the business combination makes Itella an increasingly interesting partner as well as a substantial employer in terms of the Finnish logistics industry.

The transaction price - which totaled EUR 41.8 million - was paid in cash. The expenses of the consultation and value appraisement services related to the preparatory phases of the transaction are recognized under other operating expenses. More than 800 employees transferred to Itella's employment.

Goodwill is generated by the substantial cost synergies to be gained as the production systems are combined. A significant part of the goodwill is tax deductible. Had the business acquisition carried out during the period been combined in the consolidated financial statements as of the beginning of the 2012 period, the Group's net sales in 2012 would have totaled EUR 2,046.6 million and its results EUR 9.9 million.

Analysis of net assets acquired

Effect on assets
EUR million Fair value
Intangible assets 15.4
Property, plant and equipment 10.9
Receivables 15.5
Cash and cash equivalents 0.3
Effect on assets 42.1

Effect on liabilities
EUR million
Deferred tax liability 0.5
Non-current interest-bearing liabilities -
Current interest-bearing liabilities -
Trade payables and other liabilities 14.5
Effect on liabilities 15.1
Net assets acquired 27.1

Components of acquisition cost
EUR million
Purchase price paid in cash 41.8
Purchase price owed -
Total cost of acquisition 41.8
Fair value of net assets acquired 27.1
Goodwill 14.7

Effect of acquisition on cash flow
EUR million
Purchase price paid in cash 41.8
Cash and cash equivalents of the acquired subsidiary 0.3
Cash flow 41.5

The final additional purchase price (EUR 0.4 million) of the Russian logistics group acquired by Itella Logistics in 2008 was confirmed. A positive, non-recurring item of EUR 7.0 million was recognized in the Group earnings, since the final additional purchase price was significantly lower than the preliminary estimate.

Business divestments in 2012

On May 30, 2012, Itella sold all shares of Itella Information GmbH in Germany. Subsidiary operating in printing business has been divested through management buyout arrangement and approximately 100 employees have transferred from Itella to new company called docsellent GmbH. Loss on disposal EUR 14.3 million is recognized through income statement in other operating expenses. In order to ensure the future operational condition of the company, Itella capitalized it before the disposal.

Net assets sold
EUR million 12/31/2012
Intangible assets 0.1
Property, plant and equipment 3.6
Inventories 0.2
Trade and other non-interest bearing receivables 17.4
Cash and cash equivalents 4.0
Trade payables and other non-interest bearing liabilities -10.9
Net assets 14.3
Consideration for the divestment 0.0
Loss on disposal 14.3

Effect on cash flow
EUR million
Consideration paid in cash -10.6
Cash and cash equivalents for divestments company -4.0
Debt of the purchase price -
Effect on cash flow -14.5

The associated company AS Eesti Elektron Posti, which operates in the printing services and postal services sector, was sold on September 24, 2012. The transaction yielded a profit of EUR 0.1 million. On December 20, 2012, Itella sold its ownership in its Swedish associated company Ageris Kontaktcenter AB. This transaction resulted in a sales loss of EUR 0.1 million.