Many businesses are bought and sold for the sole purpose of obtaining the company’s history, reputation and other brand-oriented intellectual properties, but in many transactions there is a disconnect between the buyer and seller regarding what assets are to be included in the brand bundle. Brand extension and licensing offers brand owners the opportunity to access new markets and increase their financial performance but carries the risk of brand dilution and added costs. Therefore, brand valuation related due diligence should be a key component of brand-based transactions.

From our experience advising and managing brand transactions, when performing due diligence related to a brand acquisition or preparing for the sale of a brand-oriented company, the ability to identify and/or promote the important factors that are driving the brand’s value leads to better transaction outcomes for both the buyer and seller. A clear understanding of the components of brand valuation leads to clear communication during the negotiation process and fewer post-transaction disputes.

Therefore, we have adopted a typical brand valuation due diligence checklist to focus on brand-based transactions. Brand-based transactions can be business or business unit acquisitions, trademark and brand asset licensing, and brand extension opportunities. We hope utilizing this check list will enable more successful brand transactions.

Brand Valuation Due Diligence Checklist

Company & Financial Information

    • Historical income statements, balance sheets and cash flow statements for the relevant business units for the past five (5) years
    • Most recently completed business plans, budgets and/or projected financial and operating results for the relevant business units (including projections for each key source of revenue, including licensing or royalty income streams)
    • What proportion of the Company’s revenues is derived from products or services using proprietary trademarks or trade names?
    • Timeline of relevant events (company origin, key contracts, license and other major agreements, acquisitions, etc.)
    • Copies of any 3rd party analysis or valuations of the Company
    • List and description of primary responsibilities for the key employees at the Company


Intellectual Property Assets

    •    Description of Company’s licensing strategies
    •    Copy, or summary description, of all technology or intellectual property licensing agreements between the Company and any other businesses
    •    Are there any inter-company charges for use of intellectual properties?
    •    List all IP registrations for patents, trademarks and copyrights; in all countries, including provisional and non-provisional
    •    Description of any, process and/or production know-how and trade secrets
    •    List all Domain names and websites, and description of e-commerce activities
    •    Brief description of key customer and supplier relationships
    •    Copies of prior analysis, if any:  internal analysis and/or 3rd party reviews; and/or valuation or analysis of the Company’s intellectual property assets
    •    Discussion and data related to historical costs incurred to create the Subject Assets


Industry & Market

    • Discussion of major competitors, and/or comparable companies, covering areas such as: product line description, estimated revenues or market share, relative strengths and weaknesses, known expansion plans or acquisitions, what companies might be potential new entrants into this space, etc.
    • Copies of independent market or industry research relevant to this particular space, covering such areas as:  historical performance, performance forecasts, descriptions of industry trends, etc.


Marketing, Advertising & Promotion

    •    Description of ongoing promotional programs, including marketing and advertising campaigns
    •    Promotional strategy and budget for product sales
    •    Capital raising or fundraising strategies
    •    Review of distribution channels employed – past and present


Internet and Social Media

    • Access to the company’s website analytics software, (often, but not always, Google Analytics).
    • If access is not immediately available, relevant analytic data related to website visits, time visitors remain on the site and number of page views per unique visitor, etc.
    • List of domain names, registrar details and proof of ownership
    • Website platform details and any work-for-hire contracts
    • List of social media accounts and username and password login details


Each transaction opportunity is unique and this list may not include all of the items a potential buyer, seller, licensor or licensee will need to consider in a specific transaction.

To obtain a PDF copy of this checklist, please click here.

For an article related to Brand Valuation, please click here.

To learn more about brand due diligence and the analytical steps we recommend before executing brand-related transactions contact Brian or Doug at Nevium at 858 255 4361.