January 19, 2021
On the first day of 2020, Namibian Nimbus Infrastructure Limited executed the business combination with Paratus Telecommunications Pty Limited and subsequently changed its name to Paratus Namibia Holdings Limited.
The Paratus Group provides ICT network solutions, satellite connectivity and infrastructure in more than 24 countries in Africa – connecting Africa from the West to the East coast.
According to the 2020 Annual Report of Paratus (page 73), management engaged an independent valuation expert to perform the purchase price allocation for this acquisition. PwC Namibia – the auditor of PNH – treated the PPA valuations and its underlying assumptions as key audit matter for review.
Among others, PwC reviewed the royalty rate used by the expert to value the Paratus trade name. PwC “researched similar transactions on the Markables database and observed a broad range of royalty rates” and “accepted management’s royalty rate of 1.0%.”