Across the pond, where public companies have taken a much larger stake in tech transfer activity than they have in the U.S., a deal between two firms may signal industry consolidation. London-based tech transfer company IP Group will take a 20% stake in the much smaller Fusion IP in a \u00a33.2 million ($5.7 million) agreement. A co-investment provision for the larger company will allow IP Group to take a share in any new companies incubated by Fusion. Sheffield, U.K.-based Fusion has exclusive arrangements to commercialize discoveries at the universities of Cardiff and Sheffield, which both spend approximately \u00a390 million annually on research. Fusion’s investments are valued at \u00a36.4 million, and each year the company creates two or three spinoffs — principally in the fields of information technology, engineering, and biotechnology. IP Group, which is more than nine times the size of Fusion, with a market capitalization of \u00a3140 million, also commercializes third-level research from a group of 10 universities, including the universities of Leeds, Oxford, Bath, and Glasgow.<\/p>\n
“We as a company were quite keen to raise a small amount of additional money — a couple of million or, maximum, \u00a33 million,” says David Baynes, CEO of Fusion IP. “We got money out there in the marketplace talking to institutions, but then we had a chat with the IP [Group] guys.” Those conversations convinced Fusion that the IP Group’s stake was a better deal. Through the co-investment agreement, any new deal funded by Fusion would create a company that is 12% owned by IP Group, 48% owned by Fusion, and 40% owned by the academic initially responsible for the commercialized discovery. In addition, IP Group offers an in-house recruitment team for tech start-ups and a capital markets team that raises money for portfolio companies. “Those are quite nice resources for us to be able to tap into,” Baynes says.<\/p>\n