Analysis: Clarivate and CPA Global enter into $6.8bn merger
Two IP giants combine in a major deal that raises questions for the IP management sector.
Clarivate and CPA Global have agreed to merge to create a $15 billion company – a significant deal in the IP management landscape. CPA shareholders will receive a 35% stake in Clarivate.
The Philadelphia-headquartered Clarivate, which is noted for its strength in IP analytics and brand protection, was formerly Thomson Reuters’s IP and science division before it was spun off for $3.5 billion to Onex and Baring Private Equity Asia. It has a storied transactional history, including the acquisition in December of Darts-ip – itself a leading player in IP analytics – as well as the purchase of numerous smaller companies that specialise in patents, trademarks, IP searches and life sciences industry analysis. Just over a year ago, Clarivate entered into a $4.2 billion merger with Churchill Capital, a publicly listed, tech sector-focused investment vehicle; it has been a publicly traded company ever since.
CPA Global, a regular fixture at all the world’s major IP conferences, has a less diffuse set of services: rather than focusing on the entire life cycle of innovation, it specialises in patent, trademark and design right management and protection. It, too, has been no slouch when it comes to corporate transactions: it bought IP management company ipan/Delegate last year. Headquartered in London, CPA has over 12,000 corporate and law firm customers.
Whereas Clarivate is especially strong in America and Asia, CPA Global is dominant in Europe. Its story, like the story of the IP sector in the new millennium, is one of skyrocketing value. In 2010, it was first snapped up by Intermediate Capital Group for £440 million; two years later, it was bought by Cinven for more than twice that. Five years after that, Leonard Green & Partners acquired CPA for $3.1 billion.
Clarivate buying it out is a small turn of events: CPA actually acquired Clarivate’s IP management business in April 2018. Buying CPA outright will ensure Clarivate’s market dominance in IP portfolio management and protection. Clarivate already had one especially widely used product in this domain, CompuMark; with the addition of CPA Global’s portfolio, Clarivate will have few serious competitors when it comes to managing and protecting brands, trademarks or domain names around the world. The move will also strengthen its existing edge in the realm of patent prosecution.
There is no shortage of IP service providers, search companies and portfolio managers; it is a busy ecosystem. But if you ask top US law firms which company they use for IP management or analytics, Clarivate will be the first name they give. It has been for years. When it comes to IP search companies, Clarivate’s only serious competitor is Corsearch, which has itself been making strategic acquisitions such as Yellow Brand Protection and Pointer Brand Protection.
The Clarivate/CPA tie-up is the latest, and arguably most significant, in a long line of moves that have consolidated Clarivate’s market dominance globally. The question now is: for a full service in IP, who can compete with Clarivate? If competition regulators come a-knocking, Clarivate can point to the fact that it sold MarkMonitor, one of its two flagship brand protection products, to OpSec Security earlier this year. But this will do little to mask the fact that when it comes to IP management service providers, law firms and large corporates are running out of options.
Legal advisor to Clarivate: Davis Polk & Wardwell
Financial advisor to Clarivate: Evercore
Legal advisor to CPA Global: Latham & Watkins
Financial advisor to CPA Global: Goldman Sachs
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