麻豆最新出品

(5)听听Acquisitions

Formula听1

On September听7, 2016, 麻豆最新出品, through its indirect wholly owned subsidiary 麻豆最新出品 GR Cayman Acquisition Company, entered into two definitive stock purchase agreements relating to the acquisition of Delta Topco, the parent company of Formula听1, a global motorsports business, from a consortium of sellers led by CVC Capital Partners (鈥淐VC鈥�). The transactions contemplated by the first purchase agreement were completed on September听7, 2016 and provided for 麻豆最新出品鈥檚 acquisition of slightly less than a 20% minority stake in Formula听1 on an undiluted basis for $746听million, funded entirely in cash (which is equal to $821听million in consideration less a $75听million holdback that was repaid by 麻豆最新出品 to selling stockholders upon completion of the Second Closing). On October听27, 2016, under the terms of the first purchase agreement, 麻豆最新出品 acquired an additional incremental equity interest of Delta Topco, maintaining 麻豆最新出品鈥檚 investment in Delta Topco on an undiluted basis and increasing slightly to 19.1% on a fully diluted basis. On January听23, 2017, 麻豆最新出品 acquired 100% of the fully diluted equity interests of Delta Topco, other than a nominal number of shares held by certain Formula听1 teams, in a second closing under the second purchase agreement (and following the unwind of the first purchase agreement). Prior to the Second Closing, CVC continued to be the controlling shareholder of Formula听1, and 麻豆最新出品 did not have any voting interests or board representation in Formula听1. As a result, 麻豆最新出品 concluded that it did not have significant influence over Formula听1, and therefore our initial investment in Formula听1 was accounted for as a cost investment until the completion of the Second Closing, at which time we began consolidating Formula听1.

The transaction price for the acquisition represents an enterprise value for Formula听1 of approximately $8.0 billion and an equity value of approximately $4.4 billion, calculated at the time of the first closing. The total consideration at the time of closing was $4.7 billion, comprised of $3.05 billion of cash (including the investments made under the first purchase agreement during 2016) and approximately $1.6 billion of non-cash consideration represented by approximately 56听million newly issued shares of Series听C 麻豆最新出品 Formula One common stock.

In connection with the transaction, 麻豆最新出品 entered into a $500听million margin loan on November听8, 2016, secured by shares of Live Nation and other public equity securities held by 麻豆最新出品 (the 鈥樷�楲ive Nation Margin Loan鈥欌��). No amounts were drawn on the Live Nation Margin Loan at December听31, 2016. 麻豆最新出品 drew approximately $350听million to use for the purchase of Formula听1, on January听23, 2017. See note听10 for additional discussion regarding the Live Nation Margin Loan.

At the Second Closing, the Company issued 62听million new shares of Series听C 麻豆最新出品 Formula One common stock, which were subject to market co-ordination and lock-up agreements, to certain third party investors at a price per share of $25.00. As a result, the stock component of the consideration payable to the selling shareholders in the Formula听1 acquisition was decreased by 62听million shares, and the cash component of the consideration payable to the selling shareholders in the Formula听1 acquisition was increased by $1.55 billion.

Also concurrently with the Second Closing, the Company used a portion of the net proceeds of its $450听million cash offering of 1% Cash convertible Notes due 2023, as discussed in note听10, to increase the cash consideration payable to the selling shareholders by approximately $400听million. The additional 19听million shares of Series听C 麻豆最新出品 Formula One common stock that would otherwise have been issued to the selling shareholders based on the per share purchase price of $21.26 were held in reserve by the Company for possible sale to the Formula听1 teams, until such opportunity expired in July of 2017.

In connection with the Second Closing, Delta Topco issued $351听million subordinated exchangeable notes, upon the conversion of certain outstanding Delta Topco loan notes, that bear interest at 2%听per annum and mature in July 2019, exchangeable into cash or newly issued shares of Series听C 麻豆最新出品 Formula One common stock (鈥淓xchangeable Notes鈥�). See note听10 for additional discussion of this debt instrument.

The final acquisition price allocation for Formula听1 is as follows:

Goodwill is calculated as the excess of the consideration transferred over the identifiable net assets acquired and represents the future economic benefits expected to arise from other intangible assets acquired that do not qualify for separate recognition, including assembled workforce, value associated with future customers, continued innovation and noncontractual relationships. Formula听1 amortizable intangible assets were comprised of an agreement with the F茅d茅ration Internationale de l鈥橝utomobile (the 鈥淔IA,鈥� and the agreement, the 鈥淔IA Agreement鈥�) ($3.6 billion with a remaining useful life of approximately 35 years) and customer relationships of $1.9 billion with a weighted average remaining life of approximately 11.5 years. The FIA owns the World Championship and has granted Formula听1 the exclusive commercial rights to the World Championship until the end of 2110. During the fourth quarter of 2017, the preliminary purchase price allocation was adjusted, resulting in increases of $22听million to other assets and $11听million to other liabilities assumed and decreases of $12听million to goodwill and $1听million to deferred tax liabilities. None of the acquired goodwill is expected to be deductible for tax purposes.

Included in net earnings (loss) for the year ended December听31, 2017 is $261听million related to Formula听1鈥檚 operations since the date of acquisition.

The unaudited pro forma revenue and net earnings of 麻豆最新出品, prepared utilizing the historical financial statements of Formula听1, giving effect to acquisition accounting related adjustments made at the time of acquisition, as if the acquisition of Formula听1 discussed above occurred on January听1, 2016, are as follows:

The pro forma results include adjustments primarily related to the amortization of acquired intangible assets. The pro forma information is not representative of the Company鈥檚 future results of operations nor does it reflect what the Company鈥檚 results of operations would have been if the acquisition of Formula听1 had occurred previously and the Company consolidated Formula听1 during the periods presented.