The Company

A UK-based provider of bespoke packaging automation equipment, machinery, and associated spare parts. The Company is a global operator, boasting a 40-year track record within the tobacco industry as well as a successful recent expansion of its offering into the cannabis, food, and fast-moving consumer goods (FMCG) industries. However, the Company began to experience financially difficulty following major sales disruptions as a result of the COVID-19 pandemic and the failure of a key distribution channel.

The Assignment

We were engaged by the Company and its restructuring advisors to provide a distressed IP valuation when it experienced financial distress, prior to the Company entering into a pre-pack administration.

Our Approach

We determined that an income approach was appropriate in valuing the Company’s IP assets. Utilizing our Metisology® approach, we performed a comprehensive review of the Company’s IP Portfolio, assessing the extent to which its IP assets underpinned key revenue streams and its competitive advantage. Find out how Metis Partners performed an Intellectual Property (IP) sale for a mechanical engineering business. Visit their website for complete details

Through our information discovery process, we determined that a key revenue stream of the Company was underpinned primarily by third-party IP, meaning that we were required to exclude the majority of this revenue from our analysis in order to ensure that our IP valuation was both robust and commercially sound.

Our analysis also identified that the Company owned an extensive IP portfolio, including brand-related assets, patents, organizational knowledge, and databases. However, the value of this IP portfolio and the likely buyer appetite were negatively impacted by a number of internal factors, including a lack of formal IP protection in commercially relevant territories and the absence of an active IP strategy.

The Outcome

We delivered an IP Valuation, reflecting the likely value of the Company’s IP assets on an ex-situ basis, representing the an estimated amount that may be reasonably expected from the sale of the IP assets in a highly accelerated M&A scenario with very limited opportunity for marketing. Our valuation assisted Management and their restructuring advisors in informing their strategic decision-making in advance of the Company entering administration.

IP Assets Valued: Brand, Patents, Key Organisational Knowledge, and Databases.