A question for Shiva

Shiva,

Two questions for you…

Why would principals of the firms that sold into IPH accept shares as part of the consideration?

They didn’t have to sell to IPH. They could have remained independent. There are over 100 firms in Aust., of all sizes. Only a portion have taken the listed route.

Since listing IPH bought the firms below and paid much of the consideration in shares in IPH.

• Cullens principals took 50% of the purchase price in Shares @ $6.97
• Ella Cheong principals took 20% of the purchase price in shares @ $5.49
• Pizzey’s principals took 50% of the purchase price in shares @ $5.41
• Fisher Adams Kelly principals took 100% of the purchase price in shares @ $4.58
• Callinans principals took 50% of the purchase price in shares @ $6.98

It would make sense that the principals who sold their firms for SHARES as well as cash would have a pretty good grasp of the future of the IP market – particularly what it takes to survive and even grow.

Remember, by selling their firms, these principals effectively bought IPH shares at multiples that imply pretty good growth for IPH and certainty in the area of IP services where IPH operates.

Certainly there will be increasing automation and other evolutions but not to the devastating level you are talking of.

A much more balanced article can be found here: http://www.ipwatchdog.com/2016/11/08/australias-listed-firms-sav-ip-profession/id=74520/

Those that survive and grow will be the ones with the capital to expand their services and gain efficiencies.


As an aside, I note you’ve posted 21 times on HC, all posts have been about IPH - all very negative. Mostly these posts have been alarmist. (e.g. talking about IP firm principals running for the listed door exits when in reality prior to April 2013 the regulatory regime in Australia did not even permit patent attorneys to incorporate and therefore list on the ASX). The real reason they did it is likely much more complicated and includes the future of the businesses they built, access to capital, limiting debt, growth etc.

On the 8^th November, you posted a link to an article on a law blog only a few days after it was written.
The article was written by a Brisbane based IP lawyer who works in a boutique firm. The article was, of course critical of IPH.
The most interesting point about the article is it was written by a former employee of an IPH subsidiary, Cullens, who ceased working for them early this year (according to LinkedIn).

Here is a link to the article. Clicking on the authors name conveniently reveals a LinkedIn button for a profile on the author. http://www.ipwatchdog.com/2016/10/30/australias-listed-ip-firms-doomed-to-fail/id=74185/

Is there something you are not telling us?