G31 Business combinations
The acquisitions of business combinations executed in 2022 and 2023 are set out below. Annual revenue and number of employees reflect the latest available information at the time of the transaction.
Business area |
Cash generating unit |
Company/unit |
Country |
Acquisition date |
Annual revenue |
No. of employees |
|---|---|---|---|---|---|---|
Sandvik Mining and Rock Solutions |
Sandvik Mining and Rock Solutions |
Deswik |
Australia |
April 1, 2022 |
79 MAUD 12M |
300 |
Sandvik Mining and Rock Solutions |
Sandvik Mining and Rock Solutions |
Akkurate |
Finland |
June 17, 2022 |
0.3 MEUR in 2021 |
12 |
Sandvik Manufacturing and Machining Solutions |
Sandvik Coromant |
Preziss |
Spain |
July 1, 2022 |
10 MEUR in 2021 |
75 |
Sandvik Manufacturing and Machining Solutions |
Walter |
Peterson Tool Company |
USA |
July 14, 2022 |
9 MUSD in 2021 |
73 |
Sandvik Manufacturing and Machining Solutions |
Walter |
Balax |
USA |
August 1, 2022 |
10 MUSD in 2021 |
66 |
Sandvik Manufacturing and Machining Solutions |
Sandvik Coromant |
Sphinx Tools |
Switzerland |
August 8, 2022 |
292 MSEK in 2021 |
115 |
Sandvik Manufacturing and Machining Solutions |
Walter |
Frezite |
Portugal |
September 1, 2022 |
450 MSEK in 2021 |
450 |
Sandvik Rock Processing Solutions |
Sandvik Rock Processing Solutions |
SP Mining |
Australia |
October 31, 2022 |
200 MEUR in 2022 |
630 |
Business area |
Cash generating unit |
Company/unit |
Country |
Acquisition date |
Annual revenue |
No. of employees |
||||
|---|---|---|---|---|---|---|---|---|---|---|
Sandvik Manufacturing and Machining Solutions |
Seco Tools |
Premier Machine Tools1) |
Ireland |
February 1, 2023 |
120 MSEK in 2022 |
14 |
||||
Sandvik Mining and Rock Solutions |
Sandvik Mining and Rock Solutions |
Polymathian |
Australia |
February 1, 2023 |
100 MSEK 12M |
50 |
||||
Sandvik Mining and Rock Solutions |
Sandvik Mining and Rock Solutions |
MCB Services and Minerals2) |
Brazil |
April 1, 2023 |
60 MSEK in 2022 |
53 |
||||
Sandvik Mining and Rock Solutions |
Sandvik Mining and Rock Solutions |
Norgalv |
Canada |
June 1, 2023 |
58 MSEK 12M |
42 |
||||
Sandvik Manufacturing and Machining Solutions |
Sandvik Manufacturing and Machining Solutions |
Postability |
Canada |
August 1, 2023 |
30 MSEK in 2022 |
13 |
||||
Sandvik Manufacturing and Machining Solutions |
Sandvik Coromant |
esco |
Germany |
November 2, 2023 |
14 MSEK in 2022 |
17 |
||||
Sandvik Manufacturing and Machining Solutions |
Sandvik Manufacturing and Machining Solutions |
Buffalo Tungsten |
USA |
December 1, 2023 |
333 MSEK in 2022 |
48 |
||||
|
||||||||||
Acquisitions
All above acquisitions during 2023 were made through the purchase of 100 percent of shares and voting rights except for MCB and Premier Machine Tools (PMT). Sandvik acquired 95 percent of PMT and for MCB Sandvik purchased the remaining 70 percent of the shares and voting rights. Prior to the acquisition of MCB in April, Sandvik owned 30 percent of the shares.
Sandvik received control over the operations on the date of closing. No equity instruments have been issued in connection with the acquisitions. All acquisitions have been accounted for using the acquisition method.
The amounts presented in the following tables detail the recognized amounts aggregated by business area. The relative amounts of the individual acquisitions are not considered significant except for the Polymathian acquisition which is disclosed separately. Sandvik is in the process of reviewing the final values for certain of the recently acquired businesses. No adjustments are expected to be material.
Total fair value of assets and liabilities of acquired businesses in 2023
The fair value of acquired assets and assessed liabilities has been preliminarily established for all acquisitions made during 2023. Only minor IFRS adjustments were made to the acquisition values.
|
SMR |
SMM |
Total |
|---|---|---|---|
Intangible assets |
0 |
– |
0 |
Property, plant and equipment |
105 |
20 |
125 |
Other non-current assets |
16 |
3 |
19 |
Inventories |
11 |
127 |
138 |
Receivables |
37 |
70 |
107 |
Other current assets |
– |
32 |
32 |
Cash and cash equivalents |
23 |
26 |
48 |
Interest bearing loans and borrowings |
–144 |
–17 |
–161 |
Other liabilities and provisions |
–26 |
–63 |
–89 |
Deferred tax assets/liabilities, net |
–56 |
3 |
–53 |
Net identifiable assets and liabilities |
–33 |
199 |
165 |
Goodwill |
782 |
266 |
1,049 |
Other surplus values |
760 |
120 |
880 |
External liability to minority shareholders |
– |
–4 |
–4 |
Purchase consideration |
–1,509 |
–580 |
–2,089 |
Deferred consideration |
87 |
75 |
162 |
Cash and cash equivalents in the acquired business |
23 |
26 |
48 |
Net cash outflow |
–1,399 |
–480 |
–1,879 |
Acquisitions made by Sandvik Mining and Rock Solutions
In February, Sandvik Mining and Rock Solutions acquired Polymathian Industrial Mathematics (“Polymathian”), an Australia-based provider of advanced mine optimization software and services. With the acquisition, Polymathian became part of the business unit Deswik and is reported within the division Digital Mining Technologies.
Polymathian’s solutions for automated decision-making and process optimization complements the offering of Deswik. The product offering includes mining operations optimization and simulation software for areas such as extraction process, material flow, energy & fuel consumption and maintenance efficiency, and it counts several of the world’s largest mining companies as customers.
Polymathian was founded in 2013, has 50 employees and is headquartered in Brisbane, Australia. The company’s annual revenues per June 2022 were around SEK 100 million. The EBITA margin is approximately 40 percent and the impact on Sandvik’s earnings per share (excluding PPA) is accretive. Sandvik Mining and Rock Solutions acquisition-related costs related to Polymathian during 2023 amounted to SEK 3 million.
In addition to Polymathian, Sandvik Mining and Rock Solutions has completed the acquisitions of MCB Services and Minerals and Norgalv during 2023.
|
Total SMR |
Whereof Polymathian |
|---|---|---|
Intangible assets |
0 |
– |
Property, plant and equipment |
105 |
0 |
Other non-current assets |
16 |
– |
Inventories |
11 |
– |
Receivables |
37 |
22 |
Other current assets |
– |
– |
Cash and cash equivalents |
23 |
12 |
Interest bearing loans and borrowings |
–144 |
– |
Other liabilities and provisions |
–26 |
–14 |
Deferred tax assets/liabilities, net |
–56 |
–22 |
Net identifiable assets and liabilities |
–33 |
–2 |
Goodwill |
782 |
533 |
Other surplus values |
760 |
646 |
Purchase consideration |
–1,509 |
–1,177 |
Deferred consideration |
87 |
60 |
Cash and cash equivalents in the acquired business |
23 |
12 |
Net cash outflow |
–1,399 |
–1,105 |
Acquisitions made by Sandvik Manufacturing and Machining Solutions
During 2023, Sandvik Manufacturing and Machining Solutions has completed the acquisitions of Premiere Machine Tools, Postability, esco and of Buffalo Tungsten. The relative amounts of the individual acquisitions are not considered significant.
|
Total SMM |
|---|---|
Intangible assets |
– |
Property, plant and equipment |
20 |
Other non-current assets |
3 |
Inventories |
127 |
Receivables |
70 |
Other current assets |
32 |
Cash and cash equivalents |
26 |
Interest bearing loans and borrowings |
–17 |
Other liabilities and provisions |
–63 |
Deferred tax assets/liabilities, net |
3 |
Net identifiable assets and liabilities |
199 |
Goodwill |
266 |
Other surplus values |
120 |
External liability to minority shareholders |
–4 |
Purchase consideration |
–580 |
Deferred consideration |
75 |
Cash and cash equivalents in the acquired business |
26 |
Net cash outflow |
–480 |
|
SMR |
SMM |
Total |
|---|---|---|---|
Contributions as of acquisition date |
|
|
|
Revenues |
140 |
187 |
326 |
Profit (loss) for the year |
9 |
23 |
32 |
Contributions if the acquisition date would have been January 1 |
|
|
|
Revenues |
193 |
567 |
760 |
Profit (loss) for the year |
1 |
36 |
37 |
|
SMR |
SRP |
SMM |
Total |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
2022 |
2023 |
Change |
2022 |
2023 |
Change |
2022 |
2023 |
Change |
2022 |
2023 |
Change |
Intangible assets |
53 |
43 |
–10 |
– |
36 |
36 |
4 |
4 |
– |
57 |
83 |
26 |
Property, plant and equipment |
15 |
15 |
0 |
129 |
122 |
–7 |
368 |
390 |
22 |
512 |
527 |
15 |
Other non-current assets |
84 |
122 |
38 |
160 |
157 |
–3 |
99 |
110 |
11 |
343 |
388 |
45 |
Inventories |
4 |
4 |
0 |
273 |
268 |
–5 |
219 |
233 |
14 |
496 |
505 |
9 |
Receivables |
126 |
296 |
170 |
884 |
887 |
3 |
315 |
315 |
1 |
1,325 |
1,498 |
173 |
Other current assets |
– |
– |
– |
270 |
270 |
– |
32 |
32 |
– |
302 |
302 |
– |
Cash and cash equivalents |
192 |
193 |
0 |
184 |
184 |
– |
147 |
128 |
–19 |
523 |
504 |
–19 |
Interest bearing loans and borrowings |
–77 |
–77 |
0 |
–191 |
–189 |
2 |
–218 |
–218 |
– |
–487 |
–485 |
2 |
Other liabilities and provisions |
–450 |
–663 |
–214 |
–1,196 |
–1,201 |
–5 |
–265 |
–271 |
–6 |
–1,911 |
–2,135 |
–224 |
Deferred tax assets/liabilities, net |
–218 |
–218 |
0 |
–645 |
–648 |
–3 |
–108 |
–110 |
–2 |
–971 |
–976 |
–5 |
Net identifiable assets and liabilities |
–270 |
–286 |
–16 |
–133 |
–115 |
18 |
592 |
613 |
21 |
189 |
212 |
23 |
Goodwill |
4,729 |
4,676 |
–54 |
4,475 |
4,425 |
–51 |
1,349 |
1,118 |
–231 |
10,553 |
10,218 |
–334 |
Other surplus values |
1,753 |
1,753 |
1 |
2,490 |
2,499 |
10 |
493 |
700 |
207 |
4,735 |
4,953 |
217 |
Purchase consideration |
–6,212 |
–6,143 |
69 |
–6,832 |
–6,809 |
23 |
–2,433 |
–2,431 |
2 |
–15,477 |
–15,384 |
93 |
Deferred consideration |
5 |
– |
–5 |
– |
– |
– |
71 |
35 |
–36 |
76 |
35 |
–41 |
Cash and cash equivalents in the acquired business |
192 |
193 |
0 |
184 |
184 |
– |
147 |
128 |
–19 |
523 |
504 |
–19 |
Net cash outflow |
–6,015 |
–5,951 |
64 |
–6,648 |
–6,626 |
23 |
–2,215 |
–2,268 |
–53 |
–14,878 |
–14,844 |
34 |
The fair value of the acquisitions made during 2022 have changed due to the establishment of a final purchase price allocation during 2023.
§ Accounting principles
The consolidated financial statements are prepared in accordance with the acquisition method. In business combinations, acquired assets and assumed liabilities are identified and classified, and measured at fair value on the date of acquisition (also known as a purchase price allocation).
Transaction costs in conjunction with acquisitions are reported directly in profit or loss for the year as other operating expenses.
Contingent considerations are recognized as financial liabilities and at fair value on the acquisition date. Contingent considerations are remeasured at each reporting period with any change recognized in profit or loss for the year.
In step acquisitions, when a controlling interest is achieved, any net assets acquired earlier in the acquired units are remeasured at fair value and the result of the remeasurement is recognized in profit or loss. If the controlling interest is lost upon divestment, net profit is recognized in profit or loss. Any residual holding in the divested business is then measured at fair value on the date of divestment and its effect is recognized in profit or loss for the year.
! Critical estimates and judgments
The business areas use estimates and judgments regarding allocation of goodwill and other surplus values in a business combination.