- IP search platform Corsearch acquired by private equity firm for $140 million
- Sale to go through a strategic review and customary closing conditions
- Move is continuation of a trend of IP services company acquisitions
It has been announced that information services company Wolters Kluwer has agreed to sell trademark search platform Corsearch to private equity entity Audax Group in a $140 million deal. The move is the latest acquisition in a series of deals centred on IP services companies, and once again demonstrates the attractiveness that private equity firms see in IP technology.
Wolters Kluwer Governance, Risk & Compliance confirmed the acquisition of trademark search platform Corsearch in a press release released over the weekend. The $140 million cash purchase still needs to go through a strategic review and is subject to customary closing conditions, but it is understood the deal will be finalised by the end of the year. It follows Wolters Kluwer's announcement in April that it was considering “strategic alternatives” for Corsearch as it looked to focus investments on its compliance and risk management software and services.
The move, when finalised, will bring to an end a 17 year association between the two entities; Corsearch was purchased by Wolters Kluwer in early 2000 and was quickly merged into its own CCH Trademark Research Corporation. In the years since, Wolters Kluwer has made numerous acquisitions of technology companies and placed them under the Corsearch umbrella; examples include the acquisitions of Edital in 2010 and CitzenHawk in 2013. It is understood that Corsearch has continued to grow its business; in 2016, it had revenues of an estimated $58 million, with “mid-single digit” growth between 2014 and 2016.
The buyer, Audax Private Equity, has a significant list of investments in technology platform companies. Research released two weeks ago revealed that Audax is the second most active investor by deal count in the first three quarters of 2017. In all, according to the report, it has made 13 acquisitions in 2017 to date, with Bloomberg noting that many of Audax’s deals are “add-ons” for its existing acquisitions. A representative from Audax, co-CEO Geoffrey Rehnert, confirmed that Corsearch is not an add-on buy, and in fact suggested it plans on purchasing further companies to merge into it. “Corsearch is a leader in the trademark solutions field and has significant opportunities to capitalize on favorable industry dynamics and a healthy market environment,” he said in the announcement. “We look forward to working with Tobias Hartmann and the Corsearch team to build a leading platform through organic growth and add-on acquisitions.”
The deal is the latest in a series of IP services company acquisitions. In July, CPA Global announced it had purchased Korean IP services provider Markpro as it sought expansion in Asia. Then just last month, Cinven announced an agreement to sell CPA Global to another private equity investment firm, Leonard Green & Partners, for a reported $3.1 billion. In an even bigger sale, last year Thomson Reuters sold its IP services business – now named Clarivate Analytics – to Hong Kong-based Baring Asia and Canada’s Onex Corporation for a reported $3.55 billion.
This latest acquisition is not as steeply priced as those mentioned above, and with that in mind Audax Private Equity clearly sees significant upside. The question now, perhaps, is whether this trend will continue, with more IP services platform falling into private equity hands in the comings months and years. As these private-equity owned companies are likely to go on further acquisition hunts in a bid to increase their value – and subsequent sell-on price tag – it seems likely.
As to what it means for trademark owners, Audax Private Equity (and, indeed, all private equity investors) will seek growth of the bottom line in a bid to profit from their investments. If or when the deal goes through, Corsearch customers will have their fingers crossed that Audax doesn’t plan on attaining more revenue from the existing customer base. In an environment of increased competition in the trademark search space, putting prices up doesn’t seem like a good strategy on the face of it.
Corsearch is a well-regarded trademark search platform – in our last IP services survey (issue 53 of World Trademark Review), Corsearch came out top as the preferred trademark search platform (with an average rating of 8.05 out of 10). With Audax Private Equity's self-described track record of “building on” its investments and “optimising operations”, then this move could be good news for rights holders using the company for trademark searches. In terms of the longer term plan, however, it is a case of wait and see.
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