FISH, OD:
A few somewhat puzzling aspects of the transaction:
1. French labor law: I am puzzled by this sentence:
"In order to accommodate French labor law, InterDigital has made an irrevocable offer to Technicolor and certain of its subsidiaries to purchase Technicolor’s patent licensing business."
What exactly did we do to accommodate French labor law?
2. Joint R&D: The following paragraph is confusing:
"InterDigital and Technicolor will also engage in jointly-funded R&D to supplement InterDigital’s portfolio, which the companies plan to evolve and strengthen over time. The R&D collaboration will bring together the efforts of hundreds of engineers in InterDigital Labs and Technicolor Research and Innovation (R&I), and will leverage Technicolor’s recognized leadership in video, media and entertainment, and InterDigital’s recognized leadership in mobile, IoT and video. InterDigital will own the patents related to the joint research, and Technicolor will receive a license back to the assets resulting from the targeted research conducted by R&I."
Sounds to me like Technicolor will contribute R&D resources to develop patents for IDCC's portfolio. The ONLY return for Technicolor on their expenditures will be a license to newly developed patents. In the meantime, IDCC will be able to monetize these new patents. It sounds like a good deal for IDCC.
3. The following is somewhat concerning given the relative lack of success in IDCC's efforts to monetize their own patents:
"InterDigital believes there is substantial unlocked licensing value in the Technicolor portfolio."
I hope the purchase price was based more on Technicolor's current licensing revenue and less on potential future revenues.
What do you guys think?
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