The Client

The Company had a 40-year track record of manufacturing and distributing specialist retail products throughout North America. The Company sold both own-brand and third-party branded products from circa 400 brick-and-mortar stores and its e-commerce website and generated circa $400m in revenue.

The Assignment

We were engaged by a prominent US commercial finance company, which provides asset-based loans secured against both tangible and intangible assets. The Client was considering further liquidity options in relation to the Company and had concerns about the underlying value of the IP assets from a previous appraisal. We were engaged to appraise and value the Company’s critical IP assets to enable the Client to better understand the value of the key IP assets and the likely ease of sale and recovery in a downside scenario.

Our Approach

Using our Metisology® approach we discovered and confirmed an extensive IP portfolio including a market-leading corporate brand, numerous product brands, more than 300 registered trade marks, multiple patent filings across 13 patent families, almost 100 domains, and 4 ecommerce websites that contributed more than 25% of total revenue.

A surprisingly valuable IP asset in this case was the customer database, rich in content, which contained millions of entries actively used for customer analytics and to drive the Company’s marketing activities. Crucially this database was also critical in securing more than 15 marketing partnerships and generated an independent revenue stream for the Company of more than $20m per annum.

We performed both an IP Audit and IP Valuation in order to:

  1. Confirm the status and protection of the key IP assets being used as collateral and identify any risks that may undermine the value of those assets at the time or in an accelerated sale and recovery scenario;
  2. Make recommendations on actions that the Company could take to mitigate the identified IP risks, which would enhance the value of the IP, and provide additional comfort to our Client in its lending decision
  3. Deliver valuation advice that reflected both the fair value of the IP assets and the potential downside valuations, if value had to be recovered from the accelerated sale of the IP assets
The Outcome

The Client recognized that the Company had a high-profile corporate brand in its market but wanted additional transparency over: the full IP Portfolio owned and utilized by the Company, the value that the IP assets contributed to the business, the associated strengths and weaknesses of these IP assets in securing future cash flows and as collateral, and opportunities to mitigate the identified risks in the short and longer term.

We identified gaps in IP protection in relation to brands, patents and data management. Registrations were missing in some key commercially relevant territories, and we made recommendations that would strengthen the IP portfolio, including in respect of the patent filing strategy, trade mark protection, the registration of domains, and monetising and protecting the future value of the hugely valuable revenue generating customer database.

IP Assets Valued – Brands, Trade Marks, Websites & Domains, Patents, Customer Database, Key Organizational Knowledge