The Company

A market-leading ecommerce retailer of British-branded produce. The retailer boasted revenues in the tens of millions by leveraging a significant and proprietary software platform, securing partnerships with some of the UK’s best-known supermarkets. It had created an active and segmented database of circa 350,000 customers, underpinning substantial recurring revenues and highlighting customer loyalty. The Company faced financial difficulty following operational challenges, including Brexit, and soaring logistics costs that significantly increased operating costs.

The Assignment

We were engaged by Gordon Brothers (delivering the physical asset valuation support) to assist the Company’s restructuring advisers by delivering a distressed IP valuation which acknowledged the financial difficulty that the Company was experiencing and the challenges to their current business model which were likely to continue.

Our Approach
  • Utilizing our Metisology® approach, we identified each of the IP assets that underpinned the Company’s three revenue streams.
  • Our IP diligence confirmed significant brand loyalty, with 30% of customers returning on a monthly basis, driving repeat revenues.
  • The brand achieved widespread brand awareness through its multi-channel operations delivering to a global customer base, resulting in consistently generating tens of millions of revenue annually
  • Despite the Company developing proprietary and complex order and inventory management software which was critical to daily operations, we established that software development was not well documented nor annotated, and so could be difficult to transfer to a third party in a break-up sale scenario.

Overall this resulted in the Company’s IP portfolio commanding a lower value than initially anticipated.

The Outcome

We provided an IP Valuation on in-situ and ex-situ bases, demonstrating the likely value of the IP assets from an accelerated M&A scenario. The Client and the advisors relied on our report to assess offers received for the Company and IP assets, and ultimately concluded a successful accelerated sale of the Company and its IP assets to a private equity firm. They backed current management, ensuring the survival of this popular brand to the benefit of its employees and a loyal customer base.

IP Assets Valued: Brand & Reputation, Trade Marks, Ecommerce Website and Domains, Software, Customer Databases, and Key Organizational Knowledge.