Astorg, one of Europe’s leading private equity groups with over EUR8 billion of AUM, has made its first investment in the US with the acquisition of Anaqua, a global leader of intellectual property management solutions. Astorg sees significant opportunities in the IP space and by taking a controlling shareholder position in Anaqua, it replaces Insight Venture Partners and Bessemer Venture Partners.
Boston-headquartered Anaqua serves approximately 50 per cent of the top 25 US patent filers and 50 per cent of the top 25 global brands. Its IP platform is used by nearly one million IP executives, attorneys, paralegals, administrators, and innovators globally.
“We’ve been looking closely at the IP market since 2016,” Michael Beetz, Director of Astorg, tells Private Equity Wire. “In our view, the software element within the IP market is the most attractive segment, in terms of growth profile, margin outlook etc. Within the software segment, we identified as Anaqua a leading global IPMS provider.
“If you think about a large global conglomerate like Sony, Ford or BASF, they have tens of thousands of patents they have to manage on the back of all their R&D activities.
“Anaqua has built a software platform that allows corporations to manage the entire IP life cycle with a single end-to-end solution. What is a particular patent worth to the corporation? Which are the patents that are quoted by competitors in terms of new research coming down the line? It basically allows corporates to extract strategic information for the C-suite to make decisions on its patents.”
As companies continually shift towards using increasingly sophisticated software to satisfy their IP management needs, the Astorg team believes there is a lot of white space in the market that Anaqua has yet to penetrate.
“The US is Anaqua’s largest market. We think there is still plenty of further organic growth in the US, and the same is true of Europe and Asia” says Beetz.
The Astorg acquisition follows the recent launch of AQX, Anaqua’s leading-edge software platform. With the integrated AQX platform, Anaqua’s customers can seamlessly access analytics and tech-enabled services to transform their IP assets into business success.
“We are excited about our partnership with Astorg, because together we will further accelerate Anaqua’s innovation and leadership in the rapidly expanding Intellectual Property management space,” says Bob Romeo, CEO of Anaqua. “In our conversations with Astorg, we articulated growth in our core software markets, with a keen focus on Europe and Asia, as well as an expansion into natural extension markets, including foreign filings and enterprise legal management.”
Romeo adds that Astorg recognised “our unique partnership with clients” and shared its vision in transforming IP into business success, which Romeo thinks will be a game-changer for the IP industry.
“What does this mean? In addition to being a legal function, IP has become a business function,” explains Romeo. “Organisations are increasingly recognising the strategic role IP plays in how a company innovates, delivers products, and drives revenue. As a result, the demand for IP teams to help their organisations gain a competitive advantage, maximise the value of their IP, and avoid damaging litigation from infringing others is intensifying.”
IP is becoming one of the most valuable assets that large corporates have today. Beetz says that the stock of patents is growing globally by around 8 to 10 per cent per year, “so there is an embedded growth rate in the IP market.
“As with any Astorg investment, we are always looking at interesting bolt-on opportunities to reinforce the growth potential of the business. Anaqua is very interesting from that perspective because they’ve recently done five acquisitions; this has helped establish them as a platform for consolidation in the market.”
“Since my initial interactions with the Astorg team,” says Romeo “it has been clear that they have a deep appreciation for the IP industry. We shared our vision of creating one integrated software and tech-enabled services platform to inform IP strategy, enable IP decision-making, and streamline IP operations with our newest software, AQX. Astorg understands that vision and recognises our proven ability to consistently deliver innovative, market-leading solutions.”
Beetz points out that there is still a degree of fragmentation in the IP marketplace, with other attractive companies to consider. “It’s difficult to say which M&A opportunity may materialise in the end because it’s competitive, there are other PE firms looking at this space. But there are still plenty of opportunities for us to go after.
“We raised our latest fund Astorg VII, at EUR4.2 billion last December and this is the first investment in that fund. It’s also our first investment in the US. We are exclusively looking for global, B2B, niche market leaders. In that regard, Anaqua ticks all the boxes for our strategy,” concludes Beetz.