EverEdge February Newsletter

Good morning,

In this month's newsletter we focus on the valuation of intangible assets: why you need to value them, when to value them, and how to ensure any valuation is accurate.

The valuation of intangible assets is one of the most important and vexed issues in finance, investment, company performance and commercialization today. With intangible assets now accounting for 87% of all company value (and in some cases, 95% or more) it seems inconceivable that many management teams, boards and investors have no idea how much these critical drivers of company value are worth.

Selling your company? Entering a JV? Acquiring a business? Raising capital? Paying tax? Conducting R&D? All of these (and more) are examples of when an accurate valuation of your intangible assets is critical.

In New Zealand this month, the Labour-led Coalition government is considering recommendations from its Tax Working Group to implement a capital gains tax, specifically including intangible assets. With intangible assets currently being largely off-balance sheet and frequently not accounted for, the proposed tax opens a Pandora’s Box of potential implications and issues. Meanwhile, in the UK, the Financial Reporting Council is currently consulting on making changes to the way that intangible assets are treated on the balance sheet, which is a step in the right direction for more accurate valuations of these assets.

To bring you to speed, we've assembled a short 'Clayton’s Notes' article on the valuation of intangible assets. We've also included a case study on a recent valuation we conducted for Tourism Holdings Limited (NZX:THL) as part of its entry into a joint venture with a large American company. The valuation enabled thl to significantly reduce the cash contribution it had to make to the JV by recognizing the value in its intangible assets. 

If you'd like to learn more about intangibles, we've included links to a number of events our team is speaking at over the coming months in Boston, Singapore, Brisbane, Sydney, Melbourne, and Auckland, among others. Many of these events are open to all, so we hope to see you some of you there.  

In the meantime, if you'd like any further information about our valuation, or broader advisory, services, please feel free to get in touch with us at anytime. 

Paul & the EverEdge team 
Upcoming EverEdge speaking engagements

Leveraging Intangible Assets to Build a Competitive Edge 
RIMS US Webinar, Mar. 7

Twilight talks: Driving Growth & Profitability
Export Council of Australia
Brisbane, March 12
Sydney, March 13
Melbourne, March 14

Managing your Intangible Assets 
Institute of Directors
Rotorua, March 28

Intangible Assets Driving Success and Failure: the Risks and Rewards of a Critical Asset Class
Lowndes Business Intelligence Series
Auckland, April 10 

RIMS 2019 Annual Conference & Exhibition
Boston, April 28 - May 1 

Risk Forum APAC 2019
Singapore, May 30 

CIO Summit 
Auckland, June 12-13
Get in touch
Case Study: Tourism Holdings Ltd

EverEdge valuation helps Tourism Holdings realize the true value of its intangible assets and enables it to substantially reduce its cash contribution to a major joint venture transaction.

Article: Valuing Intangible Assets

The world’s five most valuable companies are together worth £3.5 trillion, but their balance sheets report just £172 billion of tangible assets. Like many companies, the most valuable assets these companies own are off-balance sheet. So how do you identify and value your intangibles?  

Video case study: Valuation for IPO uncovers hidden value in intangible assets

If you are working towards an IPO or exit, make sure your company's intangible assets have been accurately priced.

Client impact
“EverEdge provided Kotahi with technology valuation advice during an offshore acquisition. Their advice was professional, pragmatic and insightful. I would recommend them to any company undertaking M&A involving intangible assets."
David Ross, Chief Executive, Kotahi. 

EverEdge Capital makes commercialization Investments

A robust pipeline of opportunities is continuing to flow for EverEdge Capital, the investment arm of EverEdge. This month, EverEdge Capital has agreed terms to pursue two live commercialization projects and has a further five high quality projects under negotiation with intangible asset owners. 
Francis Milner, the Chief Investment Officer has observed that “many owners and developers of high value intangible assets exhaust their resources through the process of creating and validating their technologies, products, or solutions. However; they often have ‘nothing left in the tank’, financially and emotionally, when it comes time for commercialization and monetization of their assets. Despite many of these opportunities having mass application and significant profit potential, they do not fit standard industry investment models and criteria, typically lacking a dedicated management team or effective plan for commercialization”. 
EverEdge Capital’s commercialisation fund was established to address this specific gap in the market, where asset owners lack capital, time, or expertise to commercialize their intangible assets. 

Get in touch
Leveraging Intangible Assets to Build a Competitive Edge

Recently, EverEdge CEO Paul Adams was interviewed for a podcast created by the Risk and Insurance Management Society (RIMS).  Paul spoke on the topic of how to leverage your intangible assets to create a competitive advantage.  This content is a good precursor to a webinar Paul is hosting for RIMS in March (details above). 

UK Financial Reporting Council (FRC) consults on intangible asset reporting

The UK's Financial Reporting Council (FRC) has launched a major review of the reporting of intangibles as businesses move more towards operating within knowledge-based economies. Read more about the consultation and have your say by clicking the link below. 

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