The sale of Thomson Reuters’ IP data company illustrates the growing significance of IP in M&A

Historically the value of a company has often been deemed to be the sum of its tangible assets. However more and more emphasis is being placed on the value of a company’s non-tangible assets, in other words its intellectual property, so for example brands, trademarks, royalty agreements, patents and in some cases its people.

Intellectual property is big business for the companies that own it and the lawyers who are trying to protect it for those companies - the number of patent ligation cases in 2015 was not far short of six thousand, illustrating that new and old patents alike are worth the money spent in protecting them.

As we know, private equity firms look to invest in strong companies with proven track records, and in addition they look for companies who operate in growth sectors. The announcement of the intended acquisition of Thomson Reuter’s Intellectual Property and Science business by Baring Private Equity Partners and Onex Corporation for USD 3.55bn is just the latest in a series of deals where companies active in the world of IP, whether that be the tracking of it or the management or development of IP products, are finding themselves subject to interest from private equity buyers. Baring and Onex were not the only PE firms initially cited as being interested in the Thomson business, with Cinven, BC Partners, Advent, CVC Capital, Bain and Carlyle group – some of the industry’s biggest hitters - also reported as being interested. For me this demonstrates that when assessing the value of a company, corporate and financial buyers should be utilising the increasing amount of available data on the subject company’s IP portfolio to find its true potential.