4. Main acquisitions, disposals and changes in scope of consolidation

Acquisition of Craftware in 2020

On 7 December 2020, the Group purchased 100% of shares in Craftware Sp. z o.o. (‘Craftware’). Craftware deals with analysis, design and implementation of customer relationship management (CRM) systems. Craftware customer base includes blue-chip companies from industries like pharmaceutical, FMCG, retail and finance. The acquisition is consistent with the Group’s strategy that focuses on expanding competencies to more value added ICT (Information and Communications Technology) services in order to meet growing demand of business customers in the areas of digital transformation.

According to the agreement the enterprise value of Craftware amounts to PLN 110 million.  Total transaction value, consisting of the enterprise value and settlements related to cash and working capital, amounts to PLN 126 million and includes acquisition price of PLN 94 million and remuneration for post-transaction services currently estimated at PLN 32 million. Out of the acquisition price, PLN 87 million was paid upon signing of the agreement. The remaining part, currently estimated at PLN 7 million, is a contingent consideration that will be settled before the end of 2024 and will be based on achieving certain financial targets of Craftware in years 2020–2023 as well as on meeting

certain other legal conditions. Remuneration for post-transaction services will be accounted for as a cost related to integration of new subsidiary and will be recognised in the consolidated income statement in years 2020-2022 as labour expense. In the 12 months ended 31 December 2020, the Group recognised PLN 7 million of costs related to acquisition and integration of the new subsidiary.

Due to a short period of time between the acquisition and the date when these Consolidated Financial Statements were authorised for issuance, provisional accounting for a business combination was made. As a result of the transaction, the Group recognised the following assets and liabilities:

Acquisition of BlueSoft and Essembli in 2019

On 12 June 2019, the Group purchased 100% of shares in BlueSoft Sp. z o.o. (“BlueSoft”) and Essembli Sp. z o.o. (“Essembli”) – a subsidiary of BlueSoft. Both companies provide a variety of IT services in the areas of application development and integration, system customization, analytics and cloud services. The enterprise value of BlueSoft and Essembli amounted to PLN 200 million. Total transaction value, consisting of the enterprise value and settlements related to cash and working capital, amounted to PLN 204 million and included acquisition price of PLN 182 million and remuneration for post-transaction services estimated at PLN 22 million. Out of the acquisition price, PLN 147 million was paid upon signing of the agreement and PLN 5 million was paid in 2020. The remaining part, estimated at PLN 30 million, is a contingent consideration that will be settled before the end of 2022 and will be based on achieving certain financial targets of BlueSoft and Essembli in 2019 and 2020 as well as on meeting certain other legal conditions. Remuneration for post-transaction services is accounted for as a cost related to integration of new subsidiaries and is recognised in the consolidated income statement in years 2019-2021 as labour expense. In the 12 months ended 31 December 2020 and 2019, the Group recognised, respectively, PLN 15 million and PLN 10 million of costs related to acquisition and integration of new subsidiaries.