Intellectual Property firm AJ Park buys rival Baldwins for $7.9m

Intellectual property firm AJ Park is set to acquire rival Baldwins Intellectual Property for $7.9 million in one of the biggest deals in the IP space for some time.

The deal, which is conditional on Commerce Commission approval, was set to go ahead in March but was delayed while the businesses worked through the Covid-19 lock-down.

ASX-listed IPH Ltd, which owns AJ Park, said it would proceed in an announcement to the exchange today with completion expected in the third quarter of this year.

The $7.9m purchase price includes a deferred consideration of $400,000 with the initial amount paid 65 per cent in cash and 35 per cent in IPH shares. The deferred part of the settlement will also be paid in cash.

Andrea Dickens, AJ Park's managing director, said it was the largest player in the intellectual property space in New Zealand with Baldwins also in the top three.

She didn't anticipate there being any difficulties in getting the deal over the line with the competition regulator.

"We are very confident we will get Commerce Commission clearance."

She said the IP market had become increasingly competitive and fragmented over the last 10 years with Australian patent attorneys also able to file in New Zealand.

"So there will be plenty of competition."

Dickens said the deal had not come about because of the Covid-19 situation but had been delayed by it.

"We were very close to an announcement in March. We had to put everything on hold."

Under the agreement, Baldwins will join the AJ Park business and operate as one firm.

AJ Park employs 170 people in both Auckland and Wellington. While Baldwins has four partners as well as other IP staff working from both cities as well.

It clients include large multi-national corporations, universities, government agencies, start-ups and individual inventors.

Dickens said it would not be in any position to talk about organisational changes until it received Commerce Commission clearance.

She said the proposed acquisition would provide benefits for both businesses, their people and clients.

"Baldwins is a quality IP business with a highly qualified and experienced specialist IP team. We are delighted to have the opportunity to bring together the strengths of two New Zealand IP businesses as one combined firm under AJ Park.

"AJ Park clients will have access to a deeper pool of IP expertise and Baldwins' clients will benefit from access to AJ Park's larger IP team and direct access to the Asian market through the IPH group Asia business."

Baldwins' Chairman, Wes Jones said: "We believe this combination will allow us to best position our business for the future, both in New Zealand and internationally. As a combined firm we can provide enhanced career opportunities for our people and offer a strengthened client service capability including an enhanced international offering.

"We believe AJ Park is a good strategic fit for our business and, subject to clearance by the NZ Commerce Commission and completion of the transaction, we look forward to joining the firm later this year."