Consolidation is accelerating

  • Investors in IP service providers will be seeking exit strategies within the next decade
  • Consolidation among service providers will accelerate
  • Ultimately, a few large providers will dominate

Another question that service providers will have to confront is about funding. The past few years have seen significant investment in IP businesses, notably from venture capital firms. There are questions around whether this is sustainable, what the investors expect and what their exit strategy is. These are likely to be resolved in the next decade.

Money coming into the sector, combined with innovation in products and services, has also driven consolidation. For example, the company now called RWS inovia has made some 15 acquisitions in the past 20 years, including Article One Partners and inovia, as well as having a partnership with Minesoft. This has reduced its exposure to its original business (translations), as that work has become commoditised. The past few years have seen many other acquisitions in the IP field. Here are just a few:

  • Clarivate Analytics acquired peer review platform Publons and academic journal provider Kopernio in 2018.
  • Questel acquired patent translation company Multiling in September 2018.
  • CPA Global bought Innography, an IP search and analytics software provider, in 2015 and added Filing Analytics and Citation Eagle (both from Practice Insight) in August 2018.
  • IP administration services Valipat and Envoy merged to form Delegate in 2016.
  • IP asset managers Anaqua and Lecorpio merged in 2017.

Most interviewees predict that this wave of consolidation will continue. Many of the most exciting tools are coming out of start-up companies, but they will need to partner with a bigger entity for access to clients and marketing (in an echo of what is happening in other sectors such as life sciences). “The fundamental issue is scale. You need expertise and assets,” contends one executive; while the head of one service provider notes: “We’ve been looked at by many finance groups. Consolidation is accelerating and the trend is huge.”

At least one IP service provider CEO believes that the industry is heading in the same direction as accountants and global law firms: “Consolidation is accelerating and we see it following a similar path to other business process outsourcing industries. It has been slower in our industry, because there are protected professions, jurisdictional differences and generally more inertia... but in the end I expect we will have three to five big actors in the IP sector.”

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