New Threshold IP Driven Transaction In Non-Distressed Situation
SAN FRANCISCO, CA. February 12, 2013 Leading intellectual property (IP) transactions to date such as Nortel's (NT) $4.5 Billion sale of 650 patents to a consortium of companies resulting in the creation of Rockstar IP and Motorola Mobility’s (MOT) $12.5 Billion sale of over 17,000 patents to Google (GOOG) have been shaped in part by the financial distress or activist pressure experienced by the seller. The acquisition last week by Bridge Crossing LLC, an acquisition vehicle of Allied Security Trust lead by ARM Holdings, of 498 of MIPS Technologies, Inc. (MIPS) patents for $350 million in conjunction with an acquisition of 82 patents and the MIPS operating assets by Imagination Technologies (IMG.L) for $100 million presents a new lens on the value of IP to business as the first side-by-side sale of pure patent related assets and the operations which created them.
"In yet another Ocean Tomo assisted first-ever event, the business and investment community can see in a non-distressed situation -- a company not in bankruptcy or subject to activist pressure -- the value of a patent driven transaction as separate but complimentary to a business acquisition" explains Michael D. Friedman, Ocean Tomo's Head of Investment Banking. Ocean Tomo acted as intellectual property advisor to MIPS for the purpose of advising the company in connection with its desire to effectuate and maximize this IP driven transaction and to evaluate whether the consideration was fair to MIPS from a financial point of view. MIPS is a leading provider of industry-standard processor architectures and cores for home entertainment, networking, mobile and embedded applications. The resulting transaction involved the sale for $350 million by MIPS to Bridge Crossing, LLC all of its right, title and interest in 498 active issued U.S. and foreign patents and patent applications.
Bridge Crossing, LLC is a special purpose vehicle formed by Allied Security Trust I, a member-based defensive patent aggregator.
“Ocean Tomo was selected by MIPS at the very beginning of the IP monetization process to advise on strategy. Over the course of about 18 months we helped identify the key assets and shape the type and value of the deal that was ultimately consummated” notes Dr. Elvir Causevic, Ocean Tomo's Managing Director of Strategy. “MIPS demonstrates what is possible when companies consider IP as a strategic business asset: a dramatic increase in shareholder value and an efficient transfer of technology, all without litigation risk.”
MIPS and Ocean Tomo devised an atypical IP strategy early on in the monetization process, built around maximizing value, while keeping litigation and ecosystem risks to a minimum. The deal consummated closely followed the strategy and value forecasts developed. Last Thursday's announcement follows Ocean Tomo's ground breaking assistance as advisor to Sterling Partners in its leveraged buyout of Mosaid Technologies, a leading IP licensing and enforcement company. In the Mosaid transaction, Ocean Tomo acted as Sterling’s banker, leading the IP diligence and helping to secure equity co-investors and IP-collateralized debt financing.
About Ocean Tomo, LLC
Established in 2003, Ocean Tomo, LLC, is the Intellectual Capital Merchant Bank® firm. The company provides financial products and services related to Intellectual Property, including expert testimony, valuation, strategy, research, ratings, investments, risk management and transactions. Ocean Tomo assists clients – corporations, law firms, governments and institutional investors – in realizing Intellectual Capital Equity® value broadly defined.