Joff Wild

Yesterday CPA Global issued a press release confirming that it is to be acquired by private equity firm Cinven. Although the sum involved has not been disclosed, Bloomberg reports that the deal values CPA at £950 million ($1.5 billion). In January 2010, when mezzanine finance outfit ICG acquired a 49% stake in the global IP outsourcing business, CPA’s overall valuation was set at £440 million. So that means it has doubled in value in two years. If that does not tell you something about changing perceptions of IP then I do not know what does.

In the press release Cinven makes it very clear where it sees the growth potential:

CPA Global fits with Cinven's strategy of investing in world-class European companies where it can accelerate their global exposure using Cinven's sector expertise and Asian portfolio capability. China will be a significant patent market over the next five years and our Asian portfolio team is ideally positioned to help deliver growth in this region. We look forward to working with the management team to support the business in its next phase of development both in Europe and globally.

And Cinven is, of course, absolutely right. The rise in Chinese patent applications, and grants, has been extraordinary over the last five years; and we are only at the beginning. There are no domestic providers of patent management and renewal services in China, and the Chinese government has recently prioritised the import of more IP consultancy businesses into the country, so the opportunities for companies such as CPA are immense. But it is not just China. Patent filings and grants are on the rise all over the world – on Tuesday the EPO confirmed that 2011 had been a record year, while at the beginningh of January it emerged that the USPTO had issued more patents in 2011 than ever before. Internationally, WIPO statistics show that the surge began in 2010, after a dip in 2009 (indeed, you could say that ICG made its purchase at exactly the right time in January 2010 – just after a difficult 2009, something that may have dropped the price it had to pay for its CPA stake by a few million). And all this is before you factor in the almost inevitable rise in patenting we will see in countries such as Brazil, India and Russia over the next decade.

But it’s not just IP management services that have these opportunities. The need for patent intermediaries of all kinds, as well as aggregators, is only going to increase over the coming years as the number of people looking for advice on how to manage and maximise the value of what they own grows - while more and more companies look to buy IP and/or license it in. Basically, if you are involved in IP service provision of whatever kind and you play your cards right, then you are in the middle of a bull market - even in places such as the US and western Europe, where the general economic times are not exactly rosy. Obviously, work is not going to fall into anyone’s hands, and it may well be a matter of looking beyond the traditional prosecution, licensing and litigation markets and models; but in a world where there are more IP owners than ever before, and more valid rights in ownership, it is hard to believe that anyone who understands how IP and IP markets work will not make a very good living from their knowledge.