There is no doubt that the New Tech sector is currently booming, including in the area of mergers and acquisitions (M&As). The recent amendment to the Companies & Partnerships Code has introduced a new form of division, i.e. a division by separation (known as a spin-off), and has regulated the cross-border division process. Let’s look at how these changes will affect existing technology transfer practices.
Harnessing the potential of innovation: tycoons and start-ups
The development of the technology sector is driven by international technology transfer, with M&As being its indispensable part.
The largest market players base their innovative projects not only on their own knowledge and market research, but also on cooperation with smaller players. The wealth of resources of developed enterprises should therefore not overshadow the important role played by start-ups and other agile enterprises taking their first business steps in the technological globalisation process.
M&As as a tool for technology transfer
In practice, the IP commercialisation process is often accompanied by the creation of SPVs. So far, the transfer of IP together with the surrounding infrastructure has taken the form of an in-kind contribution of an organised part of an enterprise to a special purpose vehicle (SPV).
The new form of division will undoubtedly present an alternative, where it will be possible to spin off a specific part of a business in a single transaction to an entity directly dependent on the entity carrying out the spin-off. This will make reorganization much easier.
The spin-off of an SPV, which is a carrier of technological know-how, will also be a significant incentive for potential investors.
The amendment to the Companies & Partnerships Code has also introduced a cross-border division into the Polish legal system. As a result, internal reorganisations as part of the operations of technology enterprises have become an opportunity for foreign expansion, thus becoming a global vehicle for technology transfer.
Challenges and opportunities for the New Tech sector
M&As help to accelerate technological development and increase business competitiveness in the global market, encouraging the transfer of knowledge, experience and resources and enabling the growth of start-ups and ambitious emerging businesses.
At the same time, the New Tech sector will have to face many challenges and overcome a number of barriers that could hinder this process, including cultural, legal and regulatory differences. Ensuring an adequate level of intellectual property protection is a major challenge in itself.
But even despite the inevitable difficulties, one thing is certain: new forms of domestic and cross-border reorganisations are sure to play a major role in technology transactions that will dominate the M&A market in the near future.
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