Calling themselves an “intellectual property investment bank”, Silicon Valley-based Inflexion Point Strategy, LLC ”represent[s] technology companies and institutional investors in the acquisition and sale of patent portfolios having strategic value and in the sourcing and execution of IP-intensive M&A transactions.” Inflexion Point grabs hold of the growing notion that IP is much more than a bundle of legal rights, and they are one of the leaders at the frontier of the IP market that continues to push the idea that IP is a commercial asset. The company, through its affiliated Inflexion Point Analytics firm, represents both sell-side and buy-side entities in IP-based transactions. Most of their work derives from patent acquisitions, sales, or M&A transactions involving significant or highly valued intellectual property, including spin-outs and other strategic restructuring activities. On their website, they restate a familiar sentiment that I focus on daily:
Typically those involved in corporate mergers, acquisitions, and divestitures pay little attention to the embedded value of the relevant IP, preferring instead to pursue a path toward transaction value based on historical financial data and economic rules-of-thumb built around traditional accounting metrics such as EBITDA , P/E multiples and free cash flow. With over 70% of the value of NASDAQ represented by intangible assets IP should be a much more important factor in an entity’s acquisition value. For acquisition targets, IP, properly considered, can be leveraged to achieve a better result. For acquirors, consideration of the target’s IP can close a price gap that would otherwise kill the deal.