An engineering technology company which had developed proprietary compressor technology, had secured almost £50 million in investment to date, and although it had actively pursued commercialisation of its innovative products, it had generated only minimal revenue.
The Company faced financial distress following an unsuccessful fundraising attempt, and subsequently entered into administration. We were engaged by the Company’s administrators to estimate the IP value in an insolvency scenario, ahead of a potential sale of the Company’s IP.
Recognizing that the Company had not fully commercialized its technology, we determined that the cost approach was appropriate in valuing the Company’s IP assets. Utilizing our Metisology® approach, we identified and appraised an extensive patent portfolio and related key organizational knowledge which underpinned the proprietary technology. We also appraised proprietary software which was integral to the Company’s product, but which was not fully developed.
We also conducted desk-based market research in order to understand the market in which the Company’s technology was to be deployed and the competing technologies available, concluding that there would be a lack of immediate demand for the Company’s products. Our Information Discovery exercise revealed that significant investment would be required to further develop and fully commercialize the product and, in our experience of running IP sales, this would significantly impact the likely IP buyer appetite and reduce the recovery value that could be expected.
We advised the Company’s administrators of the IP inventory owned by the Company, prior to the start of the accelerated M&A process. We delivered our IP Valuation report on the Orderly Liquidation Value (OLV) and Forced Liquidation Value (FLV) bases, providing them with the necessary information and IP narrative to conduct a sale of the Company’s IP assets.
IP Assets Valued: Key Organizational Knowledge, Software, Patent Portfolio.
