Using patent citation analysis to target/value M&A candidates

OVERVIEW: Patent analysis can be used for several aspects of Merger & Acquisition activities, including targeting, due-diligence, compatibility, and valuation. In the due-diligence stage, it can also he used to ensure that the target companys technology infrastructure is sound and that its key inventors still work at the company. In assessing technology compatibility patent analysis call provide insights into the fit between the patent portfolios of the acquiring company and its acquisition target. Having established the technological quality and compatibility of a target company, patent analysis can be used to assess whether the stock market appears to be valuing it fairly. In addition, these methods can be used to identify undervalued companies in which to invest, and for competitive intelligence applications. Although not applicable to every industry, patent analysis is particularly effective in industries with substantial patented technoiogies, including telecommunications, information technology, pharmaceuticals, biotechnology, chemicals, and automotive.