Mergers and acquisitions should align with your overall business strategy and, by extension, your IP strategy. Mutually beneficial acquisitions are never because of a “gut instinct” but rather a data-backed M&A strategy that includes patent search and analysis. The treasure trove of information in a patent database is valuable for businesses at many stages. M&A are no different. When seeking out and evaluating potential target companies, patent data can help your company develop an M&A strategy and make informed deals.
Understand the Landscape
Patent data, especially when visualized in a semantic map, makes it easy for stakeholders to see the big picture. Understanding the market as a whole, including technology trends and competitors’ latest innovations, is the beginning of a strong merger and acquisition strategy. This overview may also show you which technology areas are too saturated for organic growth, leaving M&A as your only option for continued expansion.
Assess Your Strengths and Weaknesses
With an understanding of the market as a whole, you can better identify your strengths and weaknesses within it. Self-assessment allows you to identify gaps within your IP portfolio. Strategic acquisitions may be able to fill one or more of those gaps. The more you understand your own business, the more likely you are to negotiate mutually beneficial deals that can not only make your company better, but elevate the acquired entity as well.
Reviewing your patent data can also eliminate potential targets from consideration if their IP does not complement your existing patents.
Bring in Multiple Perspectives
The M&A process may be quite siloed, depending on your organizational structure. Taking a close look at patent data with an intuitive search tool is a good way to bring in perspectives from across your business. R&D and IP teams may draw different conclusions from the same patent data. Neither perspective is right or wrong; it’s simply more information your M&A team can use within its acquisition strategy.
Maintain a List of Targets
With a clear understanding of the patent landscape and your company’s IP gaps from multiple perspectives, you should be able to identify a list of potential targets. Using automated reports, IP.com’s patent search software InnovationQ Plus® can keep you up to date on who is innovating in your industry, including newcomers. This functionality makes maintaining such a list much easier.
Complete Due Diligence
Conducting due diligence on your target’s IP is perhaps the most obvious use of patent data during M&A. However, that in no way makes it less important. Examining the target company’s protected technologies for freedom to operate ensures you’re able to use the IP you’re acquiring. You’ll also want to conduct a patent audit to value the IP as accurately as possible.