Using Patent Citation Analysis to Target/Value M&A Candidates

Abstract

OVERVIEW:Patent analysis can be used for several aspects of Merger & Acquisition activities, including targeting, due-diligence, compatibility, and valuation. In the due-diligence stage, it can also be used to ensure that the target company's technology infrastructure is sound and that its key inventors still work at the company. In assessing technology compatibility, patent analysis can provide insights into the fit between the patent portfolios of the acquiring company and its acquisition target. Having established the technological quality and compatibility of a target company, patent analysis can be used to assess whether the stock market appears to be valuing it fairly. In addition, these methods can be used to identify undervalued companies in which to invest, and for competitive intelligence applications. Although not applicable to every industry, patent analysis is particularly effective in industries with substantial patented technologies, including telecommunications, information technology, pharmaceuticals, biotechnology, chemicals, and automotive.

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