2. GROUP COMPOSITION
2.4 Acquisition of subsidiariess
 
  Glocell Distribution
Proprietary
Limited
R’000		     AV Technology
Limited
R’000		     WiConnect
Proprietary
Limited
R’000		  
  Distributor of airtime, starter packs and mobile phones through its retail outlets and to wholesale customers in South Africa, including postpaid and prepaid contracts     Owner of system that offers Mobile Network Operators the ability to advance airtime, data and mobile money to subscribers in Africa     Owner of retail stores trading in cellular handsets, tablets and related accessories, as well as SIM cards, postpaid and prepaid contracts  
Date acquired 30 June 2018     1 August 2018     31 July 2018  
% acquired 48%     60%     100%  
At 31 May 2019                
Assets 171 068      33 316      223 397   
Liabilities (268 580)     (2 425)     (279 984)  
Revenue since acquisition 3 623 772      35 013      200 359   
Profit after tax since acquisition 13 444      27 215      12 766   

The fair value of the net assets approximated the assets acquired on acquisition date.

  Glocell 
Distribution 
Proprietary 
Limited 
R’000 		     AV 
Technology 
Limited 
R’000 		     WiConnect 
Proprietary 
Limited 
R’000 		     Total 
R’000 		  
Cash and cash equivalents  5 978        65 442        10 605        82 025    
Property, plant and equipment  5 733        —        39 251        44 984    
Intangible assets  52 364        78 059        —        130 423    
Receivables  37 023        10 039        29 659        76 721    
Inventories  19 754        —        34 255        54 009    
Borrowings  —        —        (104 529)       (104 529)   
Deferred tax  (6 300)       (21 733)       6 880        (21 153)   
Payables  (84 097)       (73 658)       (56 709)       (214 464)   
Financial guarantee contract  (125 000)       —        —        (125 000)   
Fair value of subsidiaries acquired  (94 545)       58 149        (40 588)       (76 984)   
Non-controlling interests  49 163        (23 260)       —        25 903    
Fair value of net (liabilities)/assets acquired  (45 382)       34 889        (40 588)       (51 081)   
Goodwill  218 780        49 298        45 588        313 666    
Total purchase consideration  173 398        84 187        5 000        262 585    
Receivable balances capitalised as consideration*  (173 398)       —        —        (173 398)   
Settled in cash  —        84 187        5 000        89 187    
Less: Cash and cash equivalents in subsidiary  (5 978)       (65 442)       (10 605)       (82 025)   
Cash flow on acquisition  (5 978)       18 745        (5 605)       7 162    
* Of the balance capitalised, R112.3 million was included in trade receivables and R58.1 million in loans receivable at 31 May 2018.

Had the acquisition of the subsidiaries taken place at the beginning of the financial year, it would have contributed to revenue and net profit after tax as follows:

  Glocell
Distribution
Proprietary
Limited
R’000		     AV
Technology
Limited
R’000		     WiConnect 
Proprietary 
Limited 
R’000 		     Total
R’000		  
Revenue 3 847 391     5 101 713     249 958      9 199 062  
Net profit/(loss) after tax 17 460     3 483 979     (2 781)     3 498 658  

Glocell Distribution Proprietary Limited (Glocell) was purchased with the objective of affording the Group access to new channels for the supply and distribution of airtime, mobile devices and contracts.

Management has applied its judgement in concluding that the Prepaid Company Proprietary Limited (TPC), a wholly owned subsidiary of Blue Label Telecoms Limited, has control of Glocell due to the fact that TPC controls all distributions made by Glocell to its shareholders, the application of all free cash, the incurral of any debt by Glocell other than in the ordinary course of its business, the sale of any of Glocell's assets and any loans granted by Glocell.

In most business acquisitions, there is a part of the cost that is not capable of being attributed in accounting terms to identifiable assets and liabilities acquired and is therefore recognised as goodwill. In the case of the acquisition of Glocell, this goodwill is underpinned by a number of elements, which individually cannot be quantified. Most significant among these is the opportunity that the distribution network affords the Group.

AV Technology Limited (AV Technology) was purchased with the objective of affording the Group the ability to advance airtime, data and mobile money services to mobile network subscribers in Africa.

In most business acquisitions, there is a part of the cost that is not capable of being attributed in accounting terms to identifiable assets and liabilities acquired and is therefore recognised as goodwill. In the case of the acquisition of AV Technology, this goodwill is underpinned by a number of elements, which individually cannot be quantified. Most significant among these is the opportunity that the utilisation of Prepaid Airtime Advance System, in Africa, affords the Group.

WiConnect Proprietary Limited (WiConnect) was purchased with the objective of affording the Group access to new channels for the supply and distribution of airtime, mobile devices and contracts.

In most business acquisitions, there is a part of the cost that is not capable of being attributed in accounting terms to identifiable assets and liabilities acquired and is therefore recognised as goodwill. In the case of the acquisition of WiConnect, this goodwill is underpinned by a number of elements, which individually cannot be quantified. Most significant among these is the opportunity that the distribution network affords the Group.

The non-controlling interests recognised as part of these acquisitions have been measured at the non-controlling interests’ proportionate share of the identifiable net assets as at the acquisition date.