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office of Blakes. Ownership of patents in a particular area — without preference to a particular use or technology — is an attractive feature for technology buyers, he said, as opposed to a "true" M&A where a buyer is focused on an acquisition target's IP. "If you have a strong patent portfolio and are attacked for infringement, you have an ability to defend yourself in part by finding infringement of your patents by the plaintiff, These disputes often get settled through cross-licensing arrangements where each of the parties provides rights to use their patents to the other. "If you don't have a strong portfolio in the first place, you have nothing to offer up. Indeed, the Ernst & Young report " says Hewat. " notes that the increasing importance of IP caused transactions targeting patents to grow in the first quarter of this year. There are a lot of subtleties that come product, but it's also acquiring the people who design, develop, and commercialize that product. It might also be acquiring that company's customer base. Successful buyers are heavily focused on integration, including how they inte- grate the acquired company into their corporate culture, says Hewat. The involvement of senior HR on the buyer' tech acquisitions to be more strategic than financial, is more complicated." Are you comple- " says Arnone. "The math into play in the tech sector that you wouldn't see in other industries, says Hewat. A buyer might be acquiring a menting your product line or are you replacing what you already have? Are you going to cannibalize your sales? Are there customers who are going to be affected or motivated to leave because of whom the buyer is? "Your ultimate asset is your work- force," says Chad Bayne, a partner with Osler Hoskin & Harcourt LLP. "It's very unique to the technology field." But, he adds, acquiring a company just for its talent is not as in vogue as it was a few side is typical in a tech M&A. "There is more of a need in a lot of s years ago. Ernst & Young notes that social net- working transactions, for example, have changed in character, as post-IPO com- panies appear more focused on acquiring strategic mobile technologies instead of talent acquisitions or geographic expan- sion as they previously were. While there's a lot of talk about Facebook and Pinterest, the reality is that businesses are paying for enter- prise tools, says Bayne. Salesforce has transformed itself — through strategic acquisitions — to a company focused on social media for the enterprise. And HootSuite was originally a dashboard for social media targeted at consumers; now it's transformed into an enterprise company. At the end of the day that's where you make money, because that's where you can charge licensing and support fees. "Apple has sort of bucked that trend (in the consumer space), but how many Apples are out there?" says Bayne. "It's a rare phenomenon." IH 38 • OCTOBER/NOVEMBER 2012 Computershare_IH_Oct_12.indd 1 INHOUSE 12-08-22 2:54 PM

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