Michael D. Moberly, Principal, Founder kpstrat and ‘Business Intangible Asset Blog – A Business Intangible Asset Strategist & Risk Mitigator
Conducting intangible asset specific due diligence in pre + post transaction contexts is relevant to asset valuation and ‘price tags’ especially for prospective buyers, licensees, and/or investors.
Intangible assets sought by buyers – licensees – investors, are frequently unique and product-brand specific. As such, they are seldom wholly or quickly replicable, replaceable, or renewable. Especially if-when risks materialize, e.g., assets are being contested, undermined, and/or misappropriated.
It’s essential for prospective (asset) buyers – licensees – investors hold a ‘clear picture’ of the assets’ transferability + probability for sustainable translation to advance (buyer-licensee-investor) competitive position + revenue generation capability, etc.
There are three reasons to conduct intangible asset specific due diligence in both pre and post transaction contexts…
- examine the ‘objective essential’ intangible assets being sought and in play relative to their origins, ownership, and application.
- unravel – describe – assess actual risks, challenges, or contests present, not present, and probable.
- consider findings favorable or adverse relative to transaction objectives and insight to the assets transferability, valuation, and whether (pre-post) transaction negotiation adjustment is warranted.
Collectively, intangible asset specific due diligence offers insight to the transferability, sustainability, convergence, and translation of sought-after assets, e.g.
- to a new operating culture and their projected capability to converge and foster competitiveness, generate revenue, and elevate business valuation as buyers, licensees, and investors intend.
Knowledge – forewarning of the presence, absence, and/or probable imminence of particular-risk vulnerabilities, criticalities, and challenges, e.g., undermining, and reputational devaluation, etc., is insight with benefits.
Credible intangible asset due diligence can provide buyers, licensees, and investors, etc., with elevated tactical + strategic insights and/or assurances that the particular-intangible assets developed – held externally are or may not be worthy of their valuation ‘price tag’.
Intangible asset specific due diligence can also offer prospective buyers – investors – licensees’ credible insights for ‘transaction negotiation’ by…
- revealing + unraveling potential (imminent) challenges and/or risks that could affect the assets + if-how and circumstances either can-may affect transaction valuation ‘price tag’ negotiations, e.g., the assets transferability and sustainability with credibly lower vulnerability to – probability of experiencing pre or post transaction adversity.
Similarly, intangible asset specific due diligence can advance buyer – licensee – investor insights to the probability + criticality that particular-risks can materialize and stifle – undermine momentum and near terms objectives.
The ‘Business Intangible Asset Blog’ is experientially researched, written, and produced by Michael D. Moberly, to provide readers with perspectives and nuanced insights to distinguish, value, and safeguard business things intangible designated as ‘mission essential’.
Readers are-encouraged to review and comment on this, and other posts, @ Business Intangible Asset Blog’.