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Patent-rich companies ripe for takeover

By Mark Dunne on November 04 2008

Patent-rich ventures with healthy balance sheets and low market valuations are perfect acquisition targets for companies seeking to expand, according to exclusive research by Business XL.

Conducted in association with patent-mapping specialist CambridgeIP, Business XL has identified AIM’s 68 most IP-intensive companies, which hold more than 5,000 patents between them, and has named the largest, smallest, best-performing, most cash-rich companies on the market.

The study reveals that the ten most patent-rich companies on the market have filed more than 2,500 patents, while the ten most cash-rich intellectual property (IP) companies have £242 million on their combined balance sheets.

After Imperial Innovations, the technology transfer arm of Imperial College London, automotive technology developer Transense Technologies and fuel cell specialist IdaTech ranked second and third respectively as the most patent rich small caps on the market.

Currently valued by the market at under £7 million, Transense has 361 patented technologies on its books and therefore has one of the lowest price-per-patent ratios in the study. While US-based IdaTech is appealing but less of a bargain with at total of 357 patents and a valuation of around £48 million.

To purchase a copy of the full report, contact Calvin Green on 0207 250 7056 or calvin.green@vitessemedia.co.uk

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Comment by andrew ernill at 6:17pm, 04 Nov 2008

With a MARKET VALUE OF 3.3M Transense Technologies is even more undervalued than you suggest.The market currently values the patents at around zero despite having major companies as licencee's.Realistic?

Comment by patrick taylor at 7:05pm, 04 Nov 2008

I was surprised at the number of patents quoted for Transense. They list 23 on their website - I know they lapse redundant patents so perhaps that many have been registered over the company's existence. There are a significant number of AIM companies with interesting patents but it would appear that care should be taken as numbers registered is not the same as marketable patents. In the current climate these companies deserve a serious look as they may have low cash burn and very significant upside from a bombed out price. The risk for investors is that the technology may not be endorsed or prove problematic - AFC Energy, CAP-XX, and Torotrak provide examples. Not to say that problems will not be solved or that commercialisation will not happen eventually. Of those mentioned I am biased to Transense - but then I am a shareholder, and no longer invested in the others.

Comment by Ilian Iliev at 12:48pm, 11 Nov 2008

Dear Taylor, the number of patents reported includes patent applications as well. When we undertook the research, we also wanted to capture indicators of the 'future' - in other words, how many patent applications are in the pipeline. You're also quite right that simple 'numbers registered' may be an insufficient measure. In some of the additional analysis we conducted (which you can find in the full report) we looked at a ranking based on the number of patent citations - and the ranking starts looking somewhat different. Yours truly, Ilian Iliev (CEO CambridgeIP)

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