SAN FRANCISCO--(BUSINESS WIRE)--RPX Corporation (NASDAQ:RPXC), a leading provider of patent risk management solutions, today announced that it has executed definitive agreements on its largest syndicated transaction to date with the participation of more than 10 RPX clients. RPX will invest approximately $46 million of its own capital in the transaction, which will serve to significantly increase RPX’s portfolio of patent assets and remove the potential exposure Altitude Capital Partners (ACP) and its management arm, Altitude Capital Management LLC (ACM), present to RPX clients. ACP is a private equity fund whose portfolio companies have generated more than $700 million in licensing revenue since 2005.
Upon the close of the transaction by the end of April 2012, RPX will obtain:
- Ownership or rights to more than 500 US (and more than 50 non-US) patents held by Digitude Innovations LLC (Digitude), an ACP portfolio company, and certain sub-license rights to patents licensed exclusively by Preservation Technologies LLC (Preservation), a subsidiary of Digitude;
- The dismissal of 22 lawsuits in which 10 RPX clients are defendants;
- Certain restrictive covenants from Robert Kramer, the founder of ACM and ACP, to prevent Mr. Kramer from licensing patents against the RPX client network for an extended period of time; and
- Unique data, market insights and NPE analysis expertise of ACM.
The transaction will increase RPX’s total portfolio of patent assets by more than 30%. The company will not increase headcount or ongoing operating expenses as a result of the acquisition.
“This transaction represents immediate substantial savings and value creation for a significant portion of our client network by acquiring and neutralizing a large patent portfolio and pre-empting the future activity of a highly successful NPE,” said John A. Amster, Chief Executive Officer of RPX. “This innovative transaction demonstrates that we are executing our vision for a more rational marketplace where prolonged litigation is not required for a fair exchange of patent value. Our approach to negotiating long-term, restrictive covenants ensures that our investment is not recycled to create more patent litigation and expense for our client network.”
The portfolios to be acquired cover a broad range of technologies including Mobile Handsets, TVs, Cameras, PCs, Media Players, Content Delivery, Video-on-Demand, Internet Streaming, and Enterprise Networks.
“RPX is a pioneer in furthering the development of patents as a more liquid asset class, and has been a trusted advisor in representing its operating company clients,” said Mr. Kramer. “They have demonstrated a unique talent to structure complex multi-party transactions that are a winning proposition for all parties.”
As is frequently the case with RPX acquisitions, RPX will acquire sub-license rights to the Preservation patents for its client network only. RPX also will obtain certain license options for future RPX clients, including seven companies who remain in litigation against Preservation. Consistent with RPX’s founding principles, RPX will have no involvement in any litigation as a result of this transaction, and reaffirms that it will not assert or litigate any of its patents.
By acquiring the assets of ACM, RPX will gain access to the inner workings of a successful patent licensing business, including deal flow, patent analysis process, proprietary pricing models, and significant historical transactional data. RPX believes this acquisition will enhance its market intelligence and patent risk management capabilities.
RPX Chief Financial Officer Adam Spiegel noted that the transaction also underscores the efficiency of the RPX model in reducing patent risk for companies in its client network. “The deployment of RPX capital in structured transactions such as this one creates value for the entire RPX client network. This transaction illustrates an important element of our overall acquisition strategy and is not expected to change this year’s targeted acquisition budget,” said Mr. Spiegel.
As of December 31, 2011, RPX has invested over $370 million to acquire more than 1,900 patent assets across six major technology sectors: consumer electronics and PCs, e-commerce and software, media content and distribution, mobile communications and devices, networking, and semiconductors.
About RPX Corporation
RPX Corporation (NASDAQ: RPXC) is a leading provider of patent risk solutions, offering defensive buying, acquisition syndication, patent intelligence and advisory services. Since its founding in 2008, RPX has introduced efficiency to the patent market by providing a rational alternative to litigation. The San Francisco-based company’s pioneering approach combines principal capital, deep patent expertise, and client contributions to generate enhanced patent buying power. By acquiring patents, RPX helps to mitigate and manage patent risk for its growing client network.