The Client

An international asset integrity management services company with a 20-year track record and operations throughout the UK, the USA and the Middle East. The Company and its group entities operated in the Non-Destructive Testing market serving mainly Oil and Gas operators. It designed and developed a range of specialist inspection tools, underpinned by its patent-backed technology and proprietary software. The COVID-19 pandemic led to many client contracts being either postponed or cancelled and as a result the Company was forced to pursue restructuring options.

The Assignment

The Company appointed FRP Advisory (‘FRP”) as restructuring advisors and their role included managing an accelerated M&A process as a rescue option for the Company and its related group entities. We were introduced by FRP to assist in identifying and valuing the critical IP owned and relied upon by the Company and its group entities.  Our IP valuation would be relied on to appraise acquisition offers ahead of a pre-pack administration.

Our Approach

Using our Metisology® approach, we identified an extensive portfolio of IP assets owned across the group, much of which was being shared informally across group entities, with neither a formal licence nor intercompany agreement in place. This made the valuation process more challenging.

Our valuation diligence confirmed that brand recognition, reputation and track record of the business was crucial and contributing materially to winning new business. We concluded that although the IP assets were spread across multiple entities within the group, the interdependent nature of the IP assets including patents, software and key organisational knowledge, meant that valuing the IP as one portfolio increased the overall valuation. A “break-up” sale would significantly and negatively impact the recoverable IP value in an M&A scenario.

The Outcome

We provided, extensive consulting and IP diligence support and a comprehensive IP valuation, assisting FRP gain clarity and confidence in relation to complex IP ownership issues.  We highlighted and narrated the key strengths and weaknesses in the portfolio of IP, and in particular those which materially impacted the valuation. This included a significant data bank relating to the development of the innovative technology was identified by us as being critical to business operations as it was relied upon to maintain vital quality and safety accreditations.

Our IP valuation expertise was relied on by FRP to assess and consider different offers and deal structures, enabling them to have confidence in relation to group IP portfolio and its complex ownership factors, relying on our input when Company management were unable to assist. We catalogued the entire IP portfolio to assist with the SPA negotiations and enable discussions to take place with relevant stakeholders. We delivered our valuation report to a highly accelerated timetable allowing FRP to better appraise buyer offers ahead of the deadline of the accelerated M&A sales process.

IP Assets Valued: Brand & Reputation, Trademarks, Websites and Domain Names, Patents, Key Organisational Knowledge, Software, Database.