On 31 December 2015, MTN Nigeria acquired 100% of the share capital of Visafone Communications Limited (Visafone) for R3,432 million. As a result, the Group obtained control of Visafone. Control over Visafone will enable the Group to improve the quality of broadband services for its subscribers. The acquisition seeks to leverage resources for service enhancement and reflects the Group’s concerted efforts to deepen the growth and roll-out of broadband services across Nigeria.

Visafone contributed no revenues and net profit to the Group for the period ended 31 December 2015 as the business was acquired on the last day of the year. The consolidated pro forma revenue and profit for the year ended 31 December 2015 as though the acquisition had occurred on 1 January 2015 cannot be disclosed as the audited financial statements of Visafone for the year ended 31 December 2015 are not yet available.

The following table summarises the consideration transferred by the Group, the fair value of assets acquired and liabilities assumed at the acquisition date:

Retention amount

The retention amount represents an amount deposited into an escrow account by the Group as agreed by the parties to the acquisition, to be utilised for the satisfaction of outstanding liabilities, the shareholder debt, warranty claims and termination payments arising from the termination of supplier contracts in respect of the acquisition. The Group did not assume any liabilities, other than deferred tax, from the acquisition of Visafone. The retention amount is disclosed as restricted cash as at 31 December 2015.

The composition of goodwill will be analysed on finalisation of the business combination accounting.

Measurement of fair values

The valuation techniques applied in measuring the fair value of material assets acquired are as follows:

The fair values of the acquired identifiable assets have been determined on a provisional basis, pending receipt of the final valuations for the assets.

In November 2014, the Group acquired 50% plus one share of the share capital of Afrihost Proprietary Limited (Afrihost) for R408 million. As a result, the Group obtained control of Afrihost. Afrihost was acquired to enable the Group to drive their accelerated SME strategy and provide scale for the Group’s virtual market, content and cloud offering.

The Group elected to measure the non-controlling interest in the acquiree at the proportionate share of its interest in the acquiree’s identifiable net assets.

The fair values of the identifiable assets and liabilities as at the date of acquisition were:

The net assets recognised in the 31 December 2014 financial statements were based on a provisional assessment. The amounts were finalised during 2015, and no material changes to the previously reported results were required.

During November 2014, the Group acquired its Nashua Mobile subscriber base from Nashua Mobile Proprietary Limited for R1 246 million. The subscriber base was acquired to enable the Group to consolidate the Mobile Telephone Networks Proprietary Limited postpaid subscriber base in one entity and own the relationship with the subscribers.

The fair values of the identifiable assets and liabilities as at the date of acquisition were:

The net assets recognised in the 31 December 2014 financial statements were based on a provisional assessment. The amounts were finalised during 2015, and no material changes to the previously reported results were required.

On 11 February 2016, the Group acquired its Altech Autopage subscriber base from Altron TMT Proprietary Limited for R670 million, including contingent consideration of R30 million payable to MTN. The acquisition of the subscriber base will enable the Group to service and interact directly with its customers and will reduce the related commission expense.

The fair values of the identifiable assets and liabilities as at the date of acquisition were:

Contingent consideration

The contingent consideration arrangement requires an adjustment to the purchase price based on the size and financial quality of the base as at the effective date.

Recognised amounts of identifiable assets acquired and liabilities assumed:

The goodwill of R212 million comprises the fair value of expected synergies arising from acquisition.

Measurement of fair value

The valuation techniques applied in measuring the fair value of material assets acquired are as follows:

Given the limited period between the acquisition date and the authorisation date of the financial statements, management has not yet completed the purchase price allocation and the fair values of the acquired identifiable assets as well as the contingent consideration have been determined on a provisional basis, pending receipt of the final valuations for the assets.