IP Valuation realising value from intangible assets · Asset financing IP can be used to support asset financing, for example, as collateral in a loan from a pension fund, subject

realising value from intangible assets

IP Valuation

IP Valuation

Specialists in

IP Portfolio Management, Strategy,

Valuation, Brokering, Transactions

IP Valuation

IP Valuation

Helping you extract and protect value from creativity and innovation

Valuing and monetizing your IP, reducing risk,

resolving disputes and convincing investors.

Valuing your key assets

Many of today’s most promising ventures are built on intangible assets, which may

account for 80% of a company’s value. Whilst people often have a good idea of how

their tangible assets can be used, they are often less clear when it comes to assessing

the value of intangible assets. Valuable intangible assets can: leverage debt and

equity, help with raising finance, clarify ownership, underpin a business, be at the core

of disputes and determine cash and income going forward.

Identifying and pinpointing the value of key assets, and ensuring that the value is

sustained, is crucial for all individuals and organizations as their plans develop and

perhaps change direction.

Our independent IP valuations support all purposes including: investments,

structuring, M&A, IPOs, share issue, licensing negotiations, disputes, damage

assessments, asset financing, tax planning, probate, divorce, and insolvency - and we

also advise on appropriate and comparator royalty rates to help shape a deal.

Investments and divestments

Return on investment, particularly in technology sectors, depends heavily

on how well intangible assets have been identified and protected. By

becoming aware of the importance of these assets and their value, you limit

the dependence of your investment on subjective assumptions, reducing

investor risk.

Prior to exit, a business may need to consider the sale of a package of IP to

another party as a business option and to determine a fair sale price. Our

valuations, which take account of relevant risk factors, will enable you to

understand the value to potential buyers - and provide a royalty benchmark and

an articulation of the value to inform negotiations.

JVs and Share agreements

Where IP is a key input to a new company or joint venture, its value can affect

the share structure. We have experience in providing IP valuations needed for

this purpose.

Licensing & Franchising

Licensing-in is advantageous when a company has a lack of internal resources

and/or speed to market is critical. Our valuation models consider the markets,

likely market share and timing, and provide a benchmarked royalty rate range to

investigate the minimum rate that would make licensing profitable.

When licensing out, a key consideration is to determine appropriate financial

terms for the licence. The valuation model contains product volume

assumptions, and a royalty rate that is benchmarked or justified through

scenario modelling. In the case of franchising, the franchisee risk is considered

as part of the market risk.

A justification and details of the valuation, clearly set out, will help you to inform

and deliver an effective negotiation.

Mergers and Acquisitions

In a merger or acquisition, the value of IP within the target company should

be recognised. Typically, a high percentage of company value is in the form of

intangible assets that do not appear on the balance sheet. Our valuation model

for a potential M&A target analyses the intangible assets by type, economic

impact and, as appropriate, separates IP holdings into technology clusters

related to key markets.

“Coller IP assisted us with IP valuation

in connection with administration of a

large retail-sector company – we found

their valuation very effective and their

fast response enabled us to complete

the process on an urgent and short

timescale”

Sam Hancock, KPMG

We believe that every valuation is unique and must

be treated as such. We rank amongst the top

international companies providing IP valuations and

our clients appreciate our evidence-based approach

and our ability to assess risk.

CollerIP provides valuations for

the full spectrum of purposes

and scenarios. A selection are

summarised here;

Insolvency and Restructuring

If a business becomes insolvent, intangible assets may

be the only assets remaining. Insolvency practitioners

need to establish the value of all significant business

assets to satisfy creditors and comply with insolvency

regulations. We assist by identifying and valuing IP

and other intangible assets. Monetisation of these

assets may maximise returns to creditors or assist

a recovery.

“Coller IP undertake a large amount of

the IP valuation work in connection with

our activities in the SSAS market. In all

our dealings with Coller IP, they have been

outstanding.”

Anthony Carty, Director, Clifton Asset

Management plc.

Litigation

In IP infringement and other commercial disputes, a valuation helps you to

review the cost benefits of legal action, and when legal action is started, to

calculate the range of values that the party would be prepared to accept to

settle. For infringement, our valuation models consider both past revenues

from an infringing product and future revenues projected to the end of life of

the IP asset.

Settlement negotiations are often facilitated by the availability of benchmark

data on royalty rates and modelling of the cost of royalty payments under a

licence agreement. These inform discussions of assumptions and resulting

financial calculations.

We provide expert witness statements compliant with court rules of evidence.

Asset financing

IP can be used to support asset financing, for example, as collateral in a

loan from a pension fund, subject to an independent valuation of the IP. We

deliver many valuations of a range of IP assets for this purpose, meeting both

regulatory and tax authority requirements.

Asset Impairment reviews

We deliver impairment reviews of balance sheet intangible assets for the

purposes of financial reporting to current standards.

Tax liabilities

Transfer of commercially valuable intangible assets between entities and/

or between tax jurisdictions gives rise to tax liabilities. Tax authorities are

increasingly alert to these. It is important to be aware of the value of such

assets. We prepare valuations and transfer pricing reports, suitable and

robust for tax inspection, to help you manage your tax liability in discussions

with tax officers.

Private Client

A valuation of IP contained within a company, or royalty stream associated

with an artist or performer, may be required to settle a dispute, probate,

inheritance tax, divorce or other family matter. Our independent valuations

clarify and provide solutions for these purposes.

“We found the approach adopted by Coller IP and

presentation of the findings was helpful to the Board in

understanding the risks and opportunities in entering into

the licence agreement with our partner. The work enabled

us to go into the negotiations better prepared.”

Patrick Cohen, Finance Director at Oxsensis Limited

“We are particularly pleased with Coller

IP’s ability to provide a fit for purpose

valuation to meet tight timescales”

Paul Clark, Partner at MCR

Whether you are an individual with

a novel business idea, a start-up

or an established business, we

are dedicated to helping you to

understand, protect and realise

the full commercial value of your

intangible assets.

IntellectualProperty

IntellectualCapital

IntellectualAssets

PositioningReputationBrandingRelationshipsContracts

PatentsTrade MarksDesignsCopyrightDatabasesTrade secrets

Un-recorded inventionsKey skillsKnow-howProcessesMarket dataInformation

• Intellectual Property - provides legal protection

• Intellectual Assets - relate to people and processes

• Wider Intellectual Capital - provides channels for realising value

…successful businesses protect and manage all three

Where is the value in your business?

Three areas contribute to most of the value of

today’s businesses…

Intangible Assets

Awarded for services in IP Valuation.

Coller IP Management LtdFugro House, Hithercroft Road , Wallingford, Oxfordshire, OX10 9RB

116 Park Street, London, W1K 6AF

TEL +44 870 402 1611 or +44 1491 820 611FAX +44 870 402 1659 or +44 1491 820 659Email [email protected]

Next steps We welcome all enquiries, from early spin-out to

multinational companies, professional advisors,

investors and individuals. Share with us the purpose

for your intangible asset/IP valuation. We will work

with you to identify key valuation points for your

organisation, family or business.

We look forward to your next valuation challenge!

The Coller IP valuation team

www.collerip.com

© Coller IP 2016

IP Valuation

International Best PracticeColler IP provides training on IP Valuation for large

corporates wishing to implement international best

practice.

How we value your intangible assets Our valuations of Intellectual property (IP) and other

intangible assets are based on well-accepted, tried and

tested methods using the following approaches:

• Cost approach – based on establishing the cost to

replace the functionality of an asset, discounted for

obsolescence.

• Market approach – seeking to identify market

comparators for transactions of a similar nature, where

these can be found.

• Future Income approach – using a bespoke financial

model to calculate the net present value of future cash

flows attributable to the IP, discounted for risk.

A frequently used method, called Relief-from-Royalties,

uses a combination of these - a benchmarked royalty rate

(market approach) with a future income approach.

All three approaches, properly applied, are recognised

as valid and appropriate within the specialist field of IP

valuation by those requiring transparency and robustness,

for example, investors, courts, arbitrators, regulators and

tax authorities.

We believe that every valuation is unique and must be

treated as such. We rank amongst the top international

companies providing IP valuations and our clients appreciate

our evidence-based approach and our ability to assess risk.

IP Valuation