• No results found

Software M&A: What you need to know before buying or selling software assets

N/A
N/A
Protected

Academic year: 2021

Share "Software M&A: What you need to know before buying or selling software assets"

Copied!
26
0
0

Loading.... (view fulltext now)

Full text

(1)

Software M&A: What you need to know before

buying or selling software assets

(2)
(3)
(4)
(5)

Due diligence is becoming more

focussed

Increase in technology and digital media M&A since Q1 last year leading to:

focussed

ƒ More competition

ƒ Higher valuation multiples

ƒ Focus on delivering an efficient due diligence exercise identifying material

risks and facilitating the acquisition and integration of the target

S h t h tl i d f ?

So, what areas have we recently seen an increased focus on?

ƒ Integration

ƒ Information security and data management

ƒ IP and open source issuesIP and open source issues

ƒ Regulatory issues

(6)

Managing a diligence exercise

ƒ Make sure everyone understands the purpose of the acquisition, including:

Managing a diligence exercise

– Key business drivers and issues

– Plans for the target business

– Impact for the buyer

ƒ Set timings and materiality threshold early in the process

ƒ Pull together an appropriate internal and external team (lawyers,

accountants, investment bankers, consultants to undertake code review)

– Coordination can be very time consumingCoordination can be very time consuming

– Consider need for engagement letters, estimates, etc. from advisors

ƒ Management presentations to legal teams – put the business in context and can facilitate an understanding of key issues early on

(7)

Managing a due diligence exercise

ƒ If the target is a competitor, manage information sharing risk

Managing a due diligence exercise

ƒ NDA issues

ƒ Deal risks – how are they presented and graded? For the seller, managing the issues and identifying the “golden nuggets”

ƒ Ensure there is an understanding of the interaction between the sale and purchase agreement and due diligence including:

purchase agreement and due diligence, including:

– Warranties, indemnities and conditions to closing

– Assessment of disclosure

– Data room and general disclosure of the contents of the data room

ƒ Understand how due diligence is being managed at the target – what is their infrastructure? Do they understand the process?

(8)

Intellectual Property

ƒ Significance of IP assets in technology deals

Intellectual Property

Why it matters:

ƒ Focus on smarter DD analysis – deeper review of key assets:

what are the key

h th h d l d

what rights t t th what are the key

product components?

how were they developed?

who developed them and when?

protect them and how strong

are they?

ƒ What can go wrong?

Don’t have the rights post-deal to continue business Rights have been encumbered

(9)

What to look for

REGISTERED

UNREGISTERED

What to look for

Types of rights:

REGISTERED

℗,™, DR, domain names

UNREGISTERED

©, databases, confidential info.

- Relatively easy to establish - Potential for entitlement claims - Harder to establish as no title documents; - Need to check chain

of creation and

t t

OWNERSHIP

entitlement claims

- Expensive and often inconclusive contracts - Easier to assess validity inconclusive - Assess importance: defensive or basis of revenue streams? validity - Value likely to be linked to product revenues

VALIDITY

AND VALUE

(10)

IP Analysis

IP Analysis

How is the IP generated?

Possible encumbrances

For every key product component Internal employees Licences component, think about:

Key product

components

Consultants Security

components

External providers Claims 3rdparty components 3rdparty licence terms

(11)

Third party rights

ƒ What are third-party rights and why worry about them?

– Impact of claims

Third party rights

Don’t forget:

– Not covered by standard DD

– May impact business operation and expansion

H t h thi d t i ht ?

ƒ How to approach third party rights?

– Brands: searches

– Patents: freedom to market opinions

ƒ Patent Trolls

– What are they?

(12)
(13)
(14)
(15)
(16)
(17)
(18)
(19)
(20)
(21)
(22)
(23)
(24)
(25)

Risk and Compliance – How we can help

Clearvision

Obligation-free scan of a portion of code to

identify any 3PIP license challenges

ƒ

Schedule periodic code scans service (no license purchase

required)

ƒ

Purchase Black Duck software licenses

Purchase Black Duck software licenses

Kemp

p

Little

ƒ

The UK’s leading technology and digital media law

firm. Please contact us if you would like to discuss any

of these issues in more detail

(26)

References

Related documents

Policy alternatives to improve farmers capacity to adapt and anticipate the climate change should consider: (a) development of food crops practices and field school of climate,

In fact, evaluation of security risk assessment method is challenging because it includes a number of confounding variables: the type of training received (e.g. all papers on the

We first analyzed the Common Core State Standards for English and Mathematics, and the Next Generation Science Standards, and then conducted teacher focus groups to

With respect to particular items covered by the survey, the number of prospective buyers of radios was greater in early 1951 than in early 1950; the TABLE 17 number planning to

(1991) "An annotated bibliography of computer supported cooperative work: Revision 2." Research Report, Department of Computer Science, University of Calgary,

Estas metas têm que ter um mínimo de dificuldade associada, caso contrário não será obtida a atenção necessária para produzir o caminho para atingir o objetivo, nem será

reputation of a wine with PDO is closely related to its structural aspects, minimum quality standards, level of differ- entiation and contextual factors?. These contribute, along

Libraries are therefore seen as spaces and places that can be used to include and integrate youth into civil society (Derr and Rhodes, 2010; Feinberg and Keller, 2010 and