People in Glasshouse (Advisory) shouldn’t throw stones…because they have been sold to Grant Thornton…

Well that was the lamest title ever!  Here’s some decidedly lame conversational interplay between me and my (hypothetical) butler, Dougal, and then I’ll get to the meat of this post.

“Sir, sir, it’s the CEO of IPH on the phone.”


“The CEO of IPH, only the largest patent attorney business in the world!”

“Tell him I’m busy.  I don’t need another directorship, Dougal!  <sotto voce> You have to beat these guys off with sticks!”

“No, no, he has breaking news.”

“What is it?”

They have sold the R & D tax incentive business of Glasshouse Advisory.”

“Ah, how sad…”

Yes, the R & D tax division of Glasshouse Advisory (formerly part of Griffith Hack, now (briefly) part of IPH) has been sold to Grant Thornton (a mid-tier accountancy firm with a number of small cap technology and biotech companies as clients).

Why?  Well, probably because, even though there is superficially an interface between patent attorney businesses and the R & D tax incentive offering, it never seems to work to combine the two offerings.  That is, in the sense that there seem to be no particular synergies between the core business of patent attorney firms (filing patents) and an R & D tax offering (getting companies refunds from the tax office for their R & D expenditure).  R & D tax groups seem better aligned with accountancy firms.  No doubt because of the tax focus.

I have mentioned a similar lack of synergy between patent attorney firms and other superficially appealing businesses (see here) and the same principles apply.

The qantm (slight patent attorney pun here) of the sale is yet to be determined although the AFR article that mentions the sale estimates the revenue of the R & D tax business of Glasshouse Advisory is about $2.5 million dollars.  Not amazing.

And, now, a mea culpa.  In previous posts, here and here and here, I have used a multiple of 10x profit to determine the amount that a company will sell for.  Stop salivating lady and gentleman partners of profitable firms because I have spoken to a reputable source and they were of the view that for the acquisition of private firms (as opposed to an IPO)  a multiple of between 6x and 8x is more common, with extremes of 4x and 10x appearing now and again.

You can’t count your chickens….

Anyhoo, bye for now.


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