Michael D. Moberly, Principal, Founder kpstrat and ‘Business Intangible Asset Blog
Today, business leaders, management teams, boards, and investors are (fiduciarily) obliged to ‘take’ inventory of, conduct due diligence on, and monitor key (mission essential) intangible assets being sought in a (buy – license – invest) transaction and which a favorable (lucrative, competitive, sustainable) transaction outcome is reliant.
Let there be little – no debate, intangible assets, whether recognized or appreciated, is the primary target of – rationale for most every buy-sell-license (transaction) outcome, I am familiar, irrespective of sector.
By (a.) differentiating, (b.) taking inventory of, (c.) conducting due diligence on, and (d.) monitoring the intangible assets sought and in play, a prospective buyer – licensee – investor, can more reasonably ensure, those assets are…
- intact, and may remain so unchallenged, and less-at-risk of undermining or devaluation during or post-transaction.
Preferred objectives to a., b., c., and d., above is to sustain – enhance the ‘intangible asset underliers’ to products-services-brands, and investments, and operating cultures, i.e., their attractivity, valuation, revenue generation (capability-capacity), and competitive advantages post-transaction.
Experientially (initially) some parties politely characterize the above as unconventional. To be sure, it is! But, let there be no debate, transaction pre – post due diligence of intangible assets in play is relevant and important, by
- differentiating, taking inventory of, and monitoring particular – (mission essential) intangible assets in play and respectfully bringing same to sellers’ – licensors’ attention represents a prudent strategy for
- negotiating arbitrate-able ‘return – recovery provisions’, when a pre – post transaction intangible asset inventory – due diligence – monitoring reveal particular intangible assets, i.e., their valuation, competitive advantage, are, for example…
- may not be wholly intact, are being contested, and/or the assets origins and/or sustainability are suspect.
- undermining of brand – reputation – operating culture is about to commenced.
Readers are respectfully encouraged to review other posts at ‘Business Intangible Asset Blog’ where these and related matters-issues are examined.