Brand Valuation - Buying and Selling

APPRAISING: THE POWER OF THE MARKET MARKET SECTORS, MARKET PRICES, GOING TO THE MARKET NAT BALDWIN, METIS PARTNERS

WHAT DOES THIS GUY DO? BUYS, SELLS AND VALUES INTELLECTUAL PROPERTY ASSETS

WHAT’S THIS PRESENTATION ALL ABOUT?

ACCOUNTANCY?

WHY? EVERYBODY ? LIKES $$$

WHO DOES IT APPLY TO?

JUST TECH COMPANIES?

OR MULTINATIONAL BRANDS?

EVERYBODY? EVERYBODY

1. GOING TO MARKET 2. MARKET PRICES 3. MARKET SECTORS AGENDA!

A GAME A GAME

GAME SLIDE 1: TATA’S ACQUISITION OF JAGUAR & LAND ROVER FROM FORD 2008
Purchaser: Tata Motors
Brand: Jaguar and Land Rover
Intellectual Property Assets: Jaguar and Land Rover brands as well as associated brands. The formal IP assets included numerous design rights, patents and trademarks relating to the logos and corporate identities.
Key info:
Daimler, Lanchester and Rover brands included in the sale
Jaguar had 22 trademarks in the UK and this included the iconic E-Type Jaguar.
Land Rover had 20 trademarks in the UK relating to the Rover and Land Rover brands.
Clue: Ford had bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.7 billion in 2000. What were the IP assets worth in this 2008 deal?

1. GOING TO MARKET – SELLING IP (THE ONLY TRUE METHOD OF VALUATION!)

WHAT’S THE CONTEXT FOR SELLING THE BRAND/IP? M & A (wider business sale)? Non-core assets? Distressed sale?

IDENTIFICATION IDENTIFICATION/BUNDLING/SHRINK WRAPPING

SOURCE: CONSOR
Trademarks
Corporate Identity Assets
Real-Estate Related Assets
Other Brand-Related Assets
IP Contracts
Communications-Related Assets
Patent-Related
Bundles of Value
IT/Software
People-Related Assets
Internet-Related
Assets
Data/Information-Related Assets
Other Technology Assets
Product-Related Assets
Research-Related Assets
Miscellaneous Assets

HOW DO YOU BUILD A PROCESS THAT TICKS ALL THE BOXES AND ENSURES YOU GET AS CLOSE TO MARKET VALUE AS POSSIBLE?

MARKETING Pro-active marketing is key. Maximise value by getting out there, researching the market and analysing who the likely buyers of the assets you have are. Here are some tips: • Harness the power of the Internet • Have a global presence • Target competitors

COMPETITIVE TENSION IS KEY

MAXIMISING VALUE – THE STORY OF A BRAND

THE ASSETS: STRONG AWARD WINNING BRAND: 5 YRS TRADING + SIGNIFICANT MARKETING SPEND • MULTIPLE GROCERS (EG. SAINSBURY’S/WAITROSE) • INDEPENDENTS (EG. HARVEY NICHOLS) • DEPARTMENT STORES (EG. JOHN LEWIS) • CORPORATE/FOOD SERVICE (EG. BRITISH AIRWAYS) • HOTELS/TRAVEL RETAIL (EG. FIRMDALE HOTELS) REGISTERED TRADE MARKS

MARKETING MATERIALS • PRODUCT CATALOGUES • BRAND MANUALS • PRODUCT PACKAGING DATABASES • SUPPLIER INFORMATION • CUSTOMER INFORMATION E-COMMERCE WEBSITE AND DOMAINS NAMES THE KEY: LEVERAGE PAST MARKETING EFFORTS

GAME SLIDE 2: KRAFT’S ACQUISITION OF CADBURY 2010 Purchaser: Kraft Brand: Cadbury Intellectual Property Assets: Goodwill in the brand of Cadbury. Numerous trademarks with 20 alone in the UK. Many hundreds of patents with 56 in the UK under Cadbury UK Ltd. 27 design rights in the UK and more worldwide. Key info: The trademarks of the brand relate to the marks of the Company such as ‘Milk Chocolate’ and ‘Summertime’ as well as the corporate logo ‘Cadbury’ registered in 1886. The patents include the unique methods of manufacturing chocolate, the packaging and even the composition of the chocolate itself. Clue : In November 2009 a formal hostile takeover bid of £9.8 billion was made by Kraft but failed. What do you think the Cadbury’s brand is now valued at?

2. MARKET PRICES

BUY V. SELL POSITIONS

WHAT DO BUYERS LOOK FOR?:
Increase sales
Charge a premium for products or services
R educe production costs
Increase the speed of production
Improve the quality of their products
Create a customer following
A void or reduce development costs

FACTORS AFFECTING PRICE…

MARKET POTENTIAL 1. Size and value 2. The nature of the market 3. Market location 4. Price customers are willing to pay 5. Potential market share

DEVELOPMENT AND INVESTMENT?
Is the product/service ready for market?
What is the cost of getting it to market?
Risk that competitors get to market first
Buyers will take the costs of development, IPR protection, production and advertising into account

THE COMPETITION/BARRIERS

LIFE OF THE BRAND/IPR
Period of income generation
Economic life not necessarily the legal life
Technological change
How quickly can competitors adapt?

THE ECONOMIC CLIMATE

LEGAL AND REGULATORY

THE PAYMENT STRUCTURE

RE-CAP: FACTORS AFFECTING PRICE – SOME PRACTICAL ADVICE:
The potential market
The competition
The need for further development and investment
The economic life of the IPR
The economic climate
Legal and regulatory matters
The Payment Structure

GAME SLIDE 3: GOOGLE’S ACQUISITION OF MOTOROLA MOBILITY 2011 Purchaser: Google Brand: Motorola Mobility - formerly known as the Mobile Devices division of Motorola until it was spun-off as a separate entity in January of 2011. Intellectual Property Assets: 24,500 patents and patent applications. 17,500 registered and 7,500 applications. Key info: The patents relate to wireless, audio, video, security, user interface and product designs. Includes numerous patents related to various industry standards, including 2G, 3G, 4G, H.264, MPEG-4, 802.11, open mobile alliance (OMA) and near field communications (NFC). Clue: The final acquisition price represents the value of the patents. How much do you think one patent is worth? Is there such thing as a benchmark value?

3. MARKET SECTORS

IP BY SECTOR Source: SEC Filings of companies identified in Mergerstat Review IP Assets Whole of market Manufacturing Computer, Software, Supplies and Services Communications Drugs, Medical Supplies and Equipment Banking and Finance Goodwill 61% 60.2% 67.0% 70.5% 37.0% 85.5% Marketing-related Intangibles 6.2% 3.0% 5.4% 0.5% 1.9% 0.2% Technology-Based Intangibles 13.5% 15.2% 12.1% 2.1% 53.0% 0.0% Customer-Related Intangibles 12.7% 18.9% 10.2% 19.2% 2.3% 14.3% Contract-Based Intangibles 4.6% 0.7% 3.1% 7.6% 5.7% 0.1% Miscellaneous Intangibles 2.0% 2.1% 2.2% 0.1% 0.1% 0.1%

Retail : Brand is clearly very important and well understood by the sector. See recent insolvency brand sales: Jane Norman, Woolworths, Oddbins. High-Tech market : Formal IP is important and understood. Note the difference in value between granted patents and patent applications. Property/construction : A difficult time for the sector and the market for formal IP is depressed as corporates seek to stick to core products and services. Recruitment : Again, suffering in the economic climate. Usually based primarily on IP and there are buyers although extra effort has to be taken to preserve value and prohibit unauthorised appropriation (i.e. of candidate and client databases etc.). Hospitality : Brand and marketing assets are known to be valuable although frequently legal protection is lacking. SOME QUICK THOUGHTS ON IP BY SECTOR..

1.Tata and Jaguar/Land Rover: Tata acquired the brands of Jaguar and Land Rover in 2008 for $2.3 billion. IP assets: £900 million 2. Kraft and Cadbury: Kraft acquired Cadbury for £11.6 billion in 2010. But IP assets now estimated to be worth £12.0 billion (Brand portfolio valued at £3.2 billion). 3.Google and Motorola: Google acquired Motorola Mobility for $12.5 billion (£8 billion) in 2011. IP assets: The IP assets made up the whole acquisition price. TOTAL IP ASSETS VALUE: £20.9 BILLION THE RESULTS ARE IN…

PHOTO CREDITS HTTP://WWW.FLICKR.COM/PHOTOS/NICORA/177091741/ HTTP://WWW.FLICKR.COM/PHOTOS/TOOTDOOD/3048687944/ HTTP://WWW.FLICKR.COM/PHOTOS/59937401@N07/5858086884/ HTTP://WWW.FLICKR.COM/PHOTOS/NEILDORGAN/2929353256/ HTTP://WWW.FLICKR.COM/PHOTOS/LOURO/220138348/ HTTP://WWW.FLICKR.COM/PHOTOS/MINIMYRAN/4521523920/ HTTP://WWW.FLICKR.COM/PHOTOS/50043277@N00/259742285/ HTTP://WWW.FLICKR.COM/PHOTOS/IDCLARE/2371158843/ HTTP://WWW.FLICKR.COM/PHOTOS/53327228@N03/5161943957/ HTTP://WWW.FLICKR.COM/PHOTOS/PHILL_DVSN/3189995780/ HTTP://WWW.FLICKR.COM/PHOTOS/KRANTZSTONE/2462382185/ HTTP://WWW.FLICKR.COM/PHOTOS/DEEBEEANDSWIVEL/2273572243/ HTTP://WWW.FLICKR.COM/PHOTOS/THETHINKING/3454083790/ HTTP://WWW.FLICKR.COM/PHOTOS/ANDY101/1977269900/ HTTP://WWW.FLICKR.COM/PHOTOS/KAYAKER1204/5058491970/ HTTP://WWW.FLICKR.COM/PHOTOS/8647329@N08/2600861035/ HTTP://WWW.FLICKR.COM/PHOTOS/AUTO123/4099248476/LIGHTBOX/ HTTP://WWW.FLICKR.COM/PHOTOS/MOBIGATES/956888222/

NAT BALDWIN – METIS PARTNERS [email_address] 0141 353 3011 @BusinessBaldwin

Brand Valuation - Buying and Selling

by Metis Partners on Nov 09, 2011

Accessibility

Categories

Upload Details

Usage Rights

Statistics

Brand Valuation - Buying and Selling Presentation Transcript