The valuation of intangible assets, such as patents, trademarks and other intellectual property, has become an essential part of mergers and acquisitions (M&A). These assets, which are often less tangible but just as important as physical assets, help to create value for companies. The experts at AURIS Finance, an M&A consultancy, take a closer look.
Intangible assets account for an increasing proportion of the value of modern businesses. Patents, trademarks, copyrights and other intellectual property are strategic levers that can transform an M&A transaction. Their valuation requires a methodical and rigorous approach to maximise their contribution to the overall value of the company.
Assessment methods
Several methods are used to value intangible assets. Of these, the income method, the cost method and the market method are the most commonly used. The income method, for example, estimates the value of an asset based on the future income it is likely to generate. This approach is particularly relevant for well-established patents and trademarks that have a history of stable income generation.
The cost method is based on the cost of reproducing or replacing the asset. It is often used for assets whose creation or development required significant investment in research and development (R&D). Finally, the market method compares the asset with similar transactions in the market, providing a benchmark based on real, recent data.
Strategic importance of patents and trademarks
Patents protect technological innovations. Their valuation is based on an assessment of their potential to generate revenue streams through licensing or royalties. A strong patent portfolio can act as a barrier to entry for competitors and strengthen a company’s market position.
Trademarks, on the other hand, represent a company’s identity and reputation. They can build customer loyalty and justify higher margins through the recognition and trust they generate. Valuing trademarks involves analysing their reputation, their positioning in the market and their ability to differentiate the company’s offering.
Emerging intangible assets
In addition to patents and trademarks, other intangible assets such as copyrights, trade secrets and customer databases are becoming increasingly important. Copyrights protect original creations, while trade secrets contain confidential information that provides a competitive advantage. Customer databases, on the other hand, provide valuable insights into consumer behaviour and preferences, enabling more targeted offers and marketing campaigns.
Our experts at your side
The valuation of intangible assets requires specialised knowledge and a deep understanding of market dynamics. Within the AURIS Finance group, our experts specialising in the valuation of intangible assets will support you in all your merger and acquisition operations. Drawing on their experience and knowledge of valuation methodologies, they will provide you with strategic advice to maximise the value of your intangible assets. Whether valuing patents, trademarks or other intellectual property, our specialists are at your side to ensure the success of your transactions.
