Woolworths. Toys R Us. Maplins. Just a few of the well known brands that have left the high street. Whatever the reasons for their decline, they remain businesses that (all things being equal) the public would want to use. More than that, they remain businesses with valuable assets – their intellectual property (IP).
Research by a leading valuation company revealed that over 80% of the value of a company can be found in its IP. Where a business is failing, it may well be resurrected or developed by another company or team who see the value in its trade marks, it processes or its book of work (to name just a few assets) and can exploit them more effectively.
When a business goes into administration or liquidation, this can be a great opportunity for a successful competitor to improve their businesses cost effectivley. We have worked for businesses on both sides of this process, and the key issues we have found fall into two areas: Firstly Administrators, liqui- dators, the Governments Bona Vacantia unit (for companies), and the o cial receiver (for individuals) tend to have limit- ed experience of IP and do not have a full handle on what is owned – this puts the burden of due diligence on the purchaser, but means there are deals to be had. Secondly when you buy these assets there will be no warranties in most cases. What this means is that if the company or individual had in fact transferred the assets to someone else prior to their difficulties, then you may not have acquired good title to the assets. Some due diligence is required!
Of course, it is not always necessary to wait for these com- panies or individuals to fall into financial difficulties – you can seek deals at any time to improve your business and that of the new acquisition. An example from a past client was that of a fashion company who acquired a number of competing high street fashion brands. By having a spread of businesses they saved money on the design stage (designs were allocated to the most appropriate brand) and they benefited from greater economies of scale. It always begs the question – how could you develop your business using IP?
We can assist at any stage in the process, be that identifying the IP of potential targets or assessing the strengths and weaknesses of a range of targets to help you choose between them; conducting due diligence into those companies at the deal stage; and ensuring that you obtain full title if you take the deal forward.
If you’d like to discuss this with us, or would like us to assess the assets you have then get in touch by phone 01327 223555, email firstname.lastname@example.org or visit: