It’s been a while since we touched on the subject of Mergers and Acquisitions (M&As) but this is a topic still at the forefront of many of our customers minds.
M&As are a common way for software suppliers to grow and expand their portfolio, merging with or acquiring competitors and providers of complimentary services to expand their organisation without the need to research and develop new applications. But how do you ensure you retain access to the critical Intellectual Property (IP) you have acquired?
As we touched upon in our previous article, it’s not always possible to retain the people who hold the knowledge to build the application as part of a merger or acquisition and therefore it is essential that the IP is accurately captured to ensure that your investment is protected.
A Transfer of IP Agreement from SES ensures that the IP for the application is held securely by an independent 3rd party and released to you as the acquiring company once the merger or acquisition has been completed and the full sum has been paid.
However, the key to this process is a Remote Code Validation Test performed on the source code to demonstrate that it can be accurately redeployed. Remote Code Validation involves the developer performing a full rebuild of their application. As part of the process, an SES testing consultant will witness the full rebuild of the application via a secure remote connection and document the entire process. The independent report compiled by the SES testing consultant coupled with the audio and visual recording of the build guarantees that you will be able to accurately redeploy the application once the merger or acquisition has been finalised.
The Remote Code Validation is an essential aspect of the Transfer of IP Agreement as it demonstrates the way in which the application is built. This is vital to your development team as they will need this information to successfully continue to support and develop the application going forward.
In addition, without the Remote Code Validation process there are no guarantees that the code you have acquired as part of the M&A will be accurate and usable, significantly impacting your ability to recoup your investment.
SES is a trusted partner to clients in more than 40 countries. If you are interested in finding out more about how Software Escrow can protect your investment when entering into mergers and acquisitions, please get in touch to speak to one of our specialists.
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