Orbit Garant 2012 annual rep O rt 41 Acquisition of Morris Drilling Inc On December 13 2010 the Company acquired all issued and outstanding shares of Morris Drilling Inc a surface diamond drilli ng business in Canada This acquisition is directly in line with the growth strategy enhancing the presence in Northern Ontario The purchase price for the transaction was for a total net consideration of 3427 payable for a cash consideration of 2595 and 832 through the issuance of 173010 common shares of the company Furthermore the Company received a cash consideration of 100 as compensation of the net working capital of the company on the acquisition date The account receivable as compensation of the net working capital does not bear interest and was received ten days after the deliverance of the fnancial statements of Morris Drilling Inc An amount of 1900 has been accounted for as intangible assets and 1171 as goodwill The amount of goodwill will not be deductible for income tax purposes The results of operations of 1085820 Ontario Limited Morris Drilling Inc and Lantech Drilling Services Inc are included in the consolidated fnancial statements from November 8 2010 December 13 2010 and December 16 2011 respectively On January 1 2011 Morris Drilling Inc merged with 1085820 Ontario Inc and on February 8 2011 the legal corporate name of 1085820 Ontario Limited was changed to Orbit Garant Ontario Inc The purchase price of these above transactions was allocated to the net assets acquired on the basis of their estimated fair va lues as follows Lantech Drilling 1085820 Morris Services Inc Ontario Ltd Drilling Inc December 16 November 8 December13 2011 2010 2010 Business acquisitions date Cash bank overdraft 1939 70 17 Accounts receivable 4588 632 667 Other current assets 4497 626 262 Property plant and equipment 5240 524 738 Goodwill 4056 1846 1171 Intangible assets 1050 4322 1900 Current liabilities 3976 407 922 Longterm debt 2935 Deferred income taxes 858 1118 506 Purchase price 9723 6495 3327 Consideration Cash 3506 3310 2595 Issuance of common shares 989 650 832 Account payable receivable related to net working capital adjustment 3109 521 100 Contingent consideration 2119 2014 9723 6495 3327 Goodwill arising on business acquisitions Goodwill arose in the business combinations because the consideration paid for the combinations effectively included amounts i n relation to the beneft of expected synergies revenue growth future market development and the assembled workforce These benefts are not recognized separately from goodwill as the future economic benefts arising from them cannot be reliably measured Business acquisition costs For the year ended June 30 2012 business acquisition costs of 372 2011 328 related to the transactions described above and were included in the general and administrative expenses in the consolidated statement of earnings Impact of business acquisitions on the results The Companys consolidated revenues and net income attributable to the Companys shareholders in 2012 included approximately 12629 and 1804 respectively from business acquisitions completed in 2012 Had 2012 business acquisitions all occurred on July 1 2011 the Companys proforma consolidated revenues and net income attributable to the Companys shareholders would have been approximately 25748 and 2890 respectively These proforma fgures have been estimated based on the results of the acquired business prior to being purchased by the Companys adjusted to refect the Companys accounting policies when signifcant di fferences existed and should not be viewed as indicative of the Companys future results For the acquisitions completed in 2011 it is impracticable to estimate the revenue and net i ncome attributed to the additional business generated because the operations have been integrated with existing operations