Small Caps | Oct 11 2022
The acquisition of Smart and Biggar opens up a pathway to replicating the consolidation success IPL Ltd has experienced in Australia in the Canadian market.
-IPH's acquisition of Canada’s Smart and Biggar provides a platform for further consolidation of Canadian market
-Company has a proven track record of successfully integrating acquisitions and delivering synergies
-Asian operations have continued to outperform expectations
By Danielle Austin
Analysts largely expect the acquisition of Canadian-based Smart and Biggar to provide a platform from which IPH Ltd ((IPH)) can pursue a consolidation strategy in a new market. The company has completed the acquisition for an initial purchase price of CAD282m, with a further potential earnout of CAD66m.
With an aim of consolidating secondary, and typically fragmented, intellectual property services markets, IPH is the banner for a network of intellectual property businesses. Currently the leading intellectual property services group in Asia Pacific and Canada, IPH has a proven track record of successfully integrating acquisitions and delivering synergies.
The purchase of Smart and Biggar could signal IPH’s intention to pursue other Canadian-based acquisitions over the medium-term. According to some market observers, IPH has proven itself to be a well-placed and relatively defensive stock.
Analysts have outlined a number of key opportunities available to IPH moving forward. Firstly, the company could look to pursue bolt-on acquisitions in Canada to further gain market share.
Secondly, the company may look to enter a new secondary intellectual property market such as Brazil or South Africa, likely through the acquisition of a leading patent filer.
Thirdly, analysts see potential for IPH to seek out adjacent business in translations services, patent renewals, or intellectual property software.