Successful Acquisitions

Licensing

If you need something that another company owns, one tactic is to acquire the license to use or distribute it. Conversely, licensing your own unique intellectual property to existing companies can be an alternative to buying them.

As a growth tactic, licensing can have the advantage of encouraging high-value people to stay around, which a purchase can jeopardize. By the same token, a licensing agreement poses a problem similar to a strategic alliance. With no equity involvement, what happens when the licensed product reaches the end of its life cycle? What will motivate your partner to create new value or bring you the next great thing?

For your immediate situation, a licensing agreement may be exactly the right tactic. It is especially ...