“Taking the luck out of making IP fortunes!”

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IP VALUATION

Why is the value of IP important?

Understanding the value of IP can be challenging for many businesses, irrespective of their size or sector. We have a decade of experience in identifying and valuing key intangible assets, including brands and trade marks, software, patents, trade secrets and databases. With over £130bn invested in IP in the UK each year, it’s no surprise that an increasing number of companies require an IP valuation to improve their investment decisions and achieve their business objectives.

How can we help?

We have conducted hundreds of IP valuations for clients at various stages of their life cycle: enabling newer businesses to develop strategies or make better informed decisions about how to best exploit their IP and helping them communicate the value of their IP assets to investors in order to secure funding;  helping established businesses to ringfence and value IP assets prior to committing them to a joint venture or partnership and to maximise an exit price during negotiations with a buyer, particularly where the business valuation doesn’t reflect the investment made in developing IP.

Finance providers are increasingly recognising the ability to take security over IP assets under different corporate structures, and have relied on our independent IP valuation report to understand the risk in providing debt to IP-rich businesses. You can find more information on the IP-Backed Finance section.

Metis Partners has been carrying out a variety of IP valuations for clients in different scenarios in order to:

  • Provide a purchase price allocation of goodwill and intangibles
  • Inform a transfer price for internal and external IP transactions
  • Help settle disputes over IP value in certain business scenarios
  • Support equity investment or to restructure debt by offering IP assets as security
  • Assist in IP risk management and negotiations prior to joint ventures and partnerships

Below are some of the applications of IP valuation services offered by Metis Partners:

Raising Finance or Investment

Raising finance, refinancing or securing investment can be challenging for many businesses, particularly those that don’t rely significantly on traditional securitised assets, such as land and property. Tangible assets are readily understood by lenders and investors and reliably valued by asset valuers, however, if a company’s competitive advantage is adequately protected by its IP assets, and it can be demonstrated that they underpin revenues and forecasts (and that competitors lack equivalent IP assets), banks or investors will consider taking security over them, provided a reliable and independent IP valuation is performed.

Please see here for an example of our approach and the outcome for the client:


IP Asset Transfers and Setting up an IPCo

An IP holding company, or IPCo, can fulfil a number of business needs, including recognising IP value on a balance sheet and safeguarding IP assets from the risks of a trading business. We have advised dozens of clients on setting up an IPCo and valuing and transferring IP assets from the operating company to the IPCo.  An independent IP valuation will ensure the assets have been transferred at fair value, should this be challenged by any third-parties, such as creditors or HMRC.

The benefits of a separate IPCo

  • Protects critical IP assets and shelters them from risks associated with the trading business

  • Provides an independent and defensible valuation of the identified IP assets

  • Solves working capital or funding problems by leveraging a hidden asset class

  • Identifies IP assets which have potentially been overlooked and undervalued by management and that can provide access to new revenue streams

  • Prevents adverse credit ratings resultant from balance sheet deficits in year end accounts by monetising previously unrecognised IP asset value


Please see here for an example of our approach and the outcome for the client:

Support for PPA Valuations and Accounting for Intangibles

Whether adopting FRS 102 or IFRS 3, all companies making an acquisition must now fully recognise all assets and liabilities acquired at their fair value, to assist in arriving at purchased goodwill. These requirements have resulted in lower value being attributed to goodwill and many more intangible assets appearing on group financial statements.

Metis Partners has expertise in identifying and valuing IP across various sectors, along with extensive knowledge and experience of relevant accounting standards, which guarantees a smooth process when working alongside auditors. We appreciate our clients have a demanding schedule when meeting audit deadlines and post-acquisition requirements, and our IP valuation process and quick reporting have secured successful auditor sign-off.

Please see here for an example of our approach and the outcome for the client:


Legal Disputes

IP can be the core of a business, which means that unfortunately it can also be at the core of a strenuous legal dispute between two parties. Metis Partners has advised many clients on the value of disputed IP during or in advance of court proceedings, to ensure any claim accurately reflects the impact to the business. Our independent IP valuation process has not only helped companies place a value on patents during infringements cases, but also to support software copyright claims or professional negligence resulting in loss of IP rights. Our proprietary methodology ensures we achieve a thorough understanding of the business and the quality of the IP assets that underpin it. This is fundamental in providing the most practical IP valuation advice to our clients.


Our services

Desktop IP Valuation – for scenarios where a quick indicative IP valuation will suffice, primarily to serve certain internal purposes, a Desktop IP Valuation is ideal in providing a concise report that can enable company management to understand the value of its critical IP and implement this within an overall strategy, whether it be in advance of a joint venture partnership, an exit plan, or a commercialisation strategy.

Full IP Valuation – where full disclosure and comprehensive commentary on our IP valuation process and methodology applied, quality of IP assets valued, and all valuation inputs are required, a Full IP Valuation would be necessary. This detailed report is sufficient to be relied on by third-parties such as investors, auditors, and tax authorities.

Contact us

For further information on our IP valuation services and how we can help you understand and maximise the value of your IP, please get in touch with Saj Ali, Senior IP Valuation Manager, at saj@metispartners.com or on 0141 353 3011.