4. Business combinations and investments
4.1 Business combinations in the fiscal year
The Group did not carry out any business combinations in the fiscal year.
4.2 Business combinations of the previous year
Acquisition of World4You
On August 17, 2018, United Internet AG reached an agreement with the owners of the Austrian web host World4You concerning the 100% acquisition of the company by United Internet subsidiary 1&1 IONOS SE.
Based in Linz, Austria, World4You Internet Services GmbH was founded in 1998. The company is the market leader for web hosting in Austria. The product range of World4You (www.world4you.com) comprises domains, e-mail solutions, websites, web hosting, and servers, as well as security solutions. It is planned that World4You will remain an independent company and continue to develop the Austrian market.
The Austrian web hosting and cloud applications market has made good progress over the past few years. The market is heavily fragmented and dominated by competition between national companies and a few international players.
With the acquisition of World4You, United Internet AG has strengthened its international activities in the field of Business Applications and is continuing its strategy of complementing organic growth with targeted acquisitions.
The Group paid € 75.5 million in cash for the shares of World4You. After deduction of assumed cash amounting to € 3.5 million, the Group’s net cash outflow was € 72 million.
1&1 IONOS SE assumed control over World4You with effect from August 17, 2018 (date of acquisition).
In the course of the business combination, total transaction costs of € 0.5 million were expensed.
World4You was first included in the Consolidated Financial Statements of United Internet AG as of the date of acquisition. Initial consolidation of World4You was made in accordance with IFRS 3 – Business Combinations using the acquisition method.
The net cash outflow from the acquisition was as follows:
Cash flow from investing activities
Cash purchase price
Less assumed cash
Net cash outflow
The assets and liabilities of World4You were recognized on the basis of a purchase price allocation. Goodwill of € 51,250k resulted from this purchase price allocation. The fair value of other intangible assets amounts to € 29,631k. These mainly include customer relationships (€ 24,014k), trademarks (€ 3,494k), and software (€ 1,910k). The following table, prepared on the basis of the purchase price allocation, presents an overview of the recognized assets and liabilities:
Cash and cash equivalents
Trade accounts receivable
Other financial assets
Property, plant, and equipment
Deferred tax assets
Trade accounts payable
Income tax liabilities
Other financial liabilities
Other non-financial liabilities
Deferred tax liabilities
Total identifiable net assets
Preliminary goodwill from business acquisition
The gross trade accounts receivable amounted to € 726k. The fair value of assumed trade accounts receivable and expected cash flow amounted to € 449k.
Non-tax-deductible goodwill is allocated above all to non-separable assets, such as expected synergy effects, strategic benefits, and employee know-how.