Spotting the Signals: When IP Can Make or Break a Deal
By Robin Sparrefors, Principal, Head of Strategy & Growth at Konsert Strategy & IP, a Rouse company.
Plenty of deals get done without much thought to intellectual property (IP). But when IP matters, it really matters – enough to shape whether a merger or a spin-out creates lasting value or quietly unravels.
Savvy merger and acquisition (M&A) teams in corporates, investment banks, and private equity know to spot those moments early. Looking in divestitures for signs of entangled assets, or lurking IP risk and untapped synergies in acquisitions that could give newly formed businesses a head start. If the signs are there, IP planning moves to the front of the queue long before contracts are drafted.
It wasn’t always like this. For years, IP was a technical footnote for M&A teams. Now, sharper foresight, better data, and a clearer understanding of IP’s role in business success is changing the way IP is utilised.
You can see the shift most clearly in R&D, innovation or technology-intensive deals. Businesses built on data, software, or AI can’t afford to treat IP as a legal technicality, but a critical enabler of deal and post-deal success. And in this world, “IP” is broad – it is patents, yes, but also intellectual assets, know-how and data. These elements are crucial to ensuring long-term value, sustaining continuity and scaling benefits.
Intellectual property has gone from background detail to deal driver. The teams that understand this are using IP as a way to negotiate, protect, and grow the value they came for.
IP as a competitive edge in acquisitions
A common signal that IP will need to be a top priority, particularly in industries undergoing digital and AI transformation, is when the target of an acquisition offers connected, data-driven, or software-enabled products. These are often businesses where IP is central to market position, differentiation, and risk management. Yet in fast-moving deals, where speed, and financial diligence drive the process, traditional IP assessments are often seen as too slow or cumbersome. As a result, critical IP-related risks can be undervalued or overlooked entirely. This can expose buyers to hidden liabilities, integration challenges, or missed value opportunities.
The issue is not just whether IP is considered. It is whether it is considered at the right time and in the right way. The combination of traditional legal, technology/IT, and commercial due diligence is often insufficient. Recognizing this, many corporate M&A teams and advisors are updating their playbooks. They begin by assessing whether the transaction involves meaningful IP, and based on that, determine how early and how deeply to involve IP professionals. This approach allows them to remain efficient in lower-risk transactions, while safeguarding value in technology and data-intensive deals.
One effective way to manage this is by establishing “IP narratives” for each deal. These narratives provide a clear and shared view of how IP contributes to the commercial logic of the acquisition. They help align legal, commercial, and technical teams throughout the entire transaction, from scouting and negotiation all the way to integration.
When managed effectively, this approach prevents surprises after signing, reduces reliance on post-close clean-ups, and ensures that IP supports the “full-potential / value creation plan”, rather than disrupting it.
IP as a competitive edge in divestitures
Another signal in divestitures involving significant R&D investment or shared technology and data foundations is the risk of intellectual asset entanglement. When future business units are built on overlapping innovation and know-how, IP requires more than just legal review — it demands a dedicated separation workstream of its own.
Trying to carve out a business unit without clear rules around who will own, use, and manage IP can cause problems. At best, it creates inefficiencies; at worst, it puts the entire value of the deal at risk. When data sets, know-how, and patents remain entangled between NewCo and RemainCo, it can lead to delays, post-closing conflicts, and erosion of deal value. More fundamentally, if either entity is left without the IP it needs to operate and compete, the long-term business plans break down.
Effective M&A teams spot this early and apply a structured framework to IP separation. They identify and categorize intellectual assets, delineate ownership and access rights, and ensure that each entity emerges with the IP it needs. Just as importantly, they put in place control measures and governance mechanisms to avoid future disputes and ensure smooth, independent operation from day one.
Rather than relying on general arrangements and vague carve-out clauses, leading M&A teams treat IP as a pillar of continuity and competitiveness. In innovation and data-intensive sectors, clean separations require more than just legal agreements – they require operational clarity, business alignment, and careful execution.
Challenges in IP separation are common, but entirely manageable with the right foresight.
Structuring the post-deal IP organisation
A third signal, often obvious in hindsight but still overlooked in practice, is the role of the IP organization — whether in a business being carved out or in the two organizations coming together in a merger. In many companies, IP teams are much smaller than the broader R&D or legal functions, and are often addressed only indirectly, as a byproduct of larger organizational decisions. As a result, they may receive little focused attention during integration or separation planning. Yet in technology and data-driven businesses, these teams are essential. They do more than manage rights; they maintain continuity, enable scale, and help realize synergies after the deal.
The risks of neglecting this are substantial. Without a clear plan for the future IP organization, acquirers may face operational inefficiencies, weak innovation protection, margin erosion due to inactive IP management, or even lost business.
Experienced deal teams understand the importance of planning for IP organizational transitions. In carve-outs, this involves equipping both NewCo and RemainCo with the right talent, governance structures, and processes. The goal is not just to allocate people, but to create fit-for-purpose and business-effective IP functions aligned with their organizations’ respective strategies. In mergers, the focus shifts to identifying integration challenges early and co-designing an IP function that supports the ambitions of the combined business. It also means laying the groundwork to fully leverage the combined strength of the merged IP portfolios, unlocking synergies and enabling stronger strategic positioning post-integration.
When handled well, this ensures that the IP function is fully operational from day one. It is positioned to protect value, support innovation, and contribute directly to delivering on the deal’s strategic goals.
Making IP a core element of deal strategy
There are clear signals for when IP needs attention in deals: innovation-led business models that rely on access to critical technology and data; acquisition targets offering connected, data-driven, or software-enabled products; entangled know-how and data; or overlapping technology platforms. Overlooking these can put the deal’s value, and future, at risk. – iIn fact in these transactions, overlooking IP is a strategic risk.
Successful M&A teams spot these signals early. They plan deliberately, coordinate across legal, technical, and commercial teams, and make IP a core part of the transaction. Doing so helps companies stay agile, protect what matters, and get the full value out of the deal.
Robin Sparrefors is a Principal and Head of Strategy & Growth at Konsert Strategy & IP, a Rouse company. He leads Konsert’s practice Strategy & IP for Business and Technology executives – helping companies to transform technology innovation practices to fuel growth with digitalization.
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