A developer of a digital platform that provided an integrated, end-to-end healthcare solution. The Group’s proprietary digital healthcare platform had been in development for ten years, with over $500m invested. The Group’s technology was deployed in over 15 countries and used by some of the world’s largest healthcare providers and so the brand had also earned significant goodwill in its market. The Group had reached a $1bn revenue by year 3 of commercialization, and was generating $15m in licensing revenue, however was still conducting extensive R&D activities and employed more than 100 software and product developers who were developing additional features, which resulted in significant trading losses. When the Company fell into financial distress the main investor decided not to continue to support operations.
We were introduced to the Group by its restructuring advisors who were running an accelerated M&A process. We were engaged to provide an IP valuation on a Forced Liquidation Value (FLV) basis when the Company entered financial distress.
Utilizing our Metisology® approach, we identified all the critical IP assets that underpinned the Group’s operations and its revenue streams. We also conducted a comprehensive business and IP diligence to identify the key factors that would likely impact IP value in an accelerated M&A process. We identified that whilst the Group has developed a sophisticated and patent-backed digital healthcare platform with proprietary artificial intelligence and machine learning-enabled features, it also relied on significant complementary assets, such as healthcare staff and healthcare facilities network, to deliver the full healthcare service.
The platform was positioned in the market as a SaaS solution, and although customer contracts were recurring, any buyer would have to take on or already have, major infrastructure in healthcare, including access to qualified healthcare staff, in order to fully monetize the IP Portfolio. This significantly narrowed the pool of potential buyers and so it was crucial that this was reflected in the valuation on FLV basis.
Our business and IP diligence also uncovered that substantial costs and resources would be required of any potential buyers to onboard customers, resume service delivery, and to achieve profitability. In addition, we leveraged our experience of valuing IP assets deployed in highly regulated sectors and the finding of our diligence to conclude that a break in trading and the resultant brand and reputational damage would negatively impact IP value recovery in the healthcare sector, where trust and continuity of service is paramount. These factors would therefore narrow the pool of potential acquirers and the opportunity to build competitive tension in an accelerated M&A process, negatively impacting on the recoverable IP value.
We delivered an IP Valuation reflecting the likely value of the IP assets on a FLV basis. The Group’s restructuring advisors relied on our report to inform the accelerated M&A process. We were subsequently retained by the Group’s Joint Administrators to provide, based on our extensive experience of selling IP from distress, expert IP valuation advice on the offers received for specific bundles of IP assets from this complex IP portfolio, following the Group’s entry into administration.
IP Assets Valued: Software, Brand, Patents, Key Organizational Knowledge (including data and algorithms)
