Exclusive-Clarivate’s IP unit draws private equity interest, sources say

By Amy-Jo Crowley and Milana Vinn

LONDON/NEW YORK (Reuters) -CD&R and Nordic Capital are among private equity groups weighing possible bids for Clarivate’s intellectual property (IP) unit, two people with knowledge of the matter told Reuters.

Clarivate, which has headquarters in London, said in February it was exploring strategic alternatives including potential divestments as part of plans to create value for shareholders, and had appointed Morgan Stanley and Moelis & Company as financial advisers.

The New York-listed information group has been holding conversations with bidders about its IP unit and invited them last month to submit indications of interest, the people said, speaking on condition of anonymity because the matter is private. The two private equity funds were among those that submitted expressions of interest, the people said.

The sources cautioned that no deal was guaranteed and Clarivate may decide to focus on other divestitures if offers for its IP unit are not eventually high enough.

Spokespeople for Clarivate, CD&R and Nordic Capital declined to comment.

The plans come after Clarivate's shares have fallen 90% from a high in 2021 as it struggles with organic growth and customer retention.

Revenue at the group was $2.56 billion in 2024, compared to $2.63 billion a year earlier, while earnings before interest, tax, depreciation and amortisation (EBITDA) narrowed to $1 billion from $1.12 billion a year earlier, according to its latest annual report.

Clarivate, which has an enterprise value of $6.6 billion according to LSEG data, is hoping for a valuation north of $4 billion for the IP assets, the two people and a third one said.

However, certain prospective bidders believe the IP unit may be worth less, the people said.

EBITDA at Clarivate’s IP unit fell by 10.5% to $358 million for the year ending December 2024, partly driven by lower subscription revenues and a decline in renewal volumes, according to its latest annual report.

Nordic Capital has been considering buying the IP unit via Anaqua, the IP software business it acquired last November for $2.5 billion, the people said. Anaqua did not respond to requests for comment.

Clarivate’s top shareholder is private equity firm Leonard Green & Partners with a 16.9% stake, followed by Clarkston Capital Partners with 10% and Italy’s Agnelli family with 9.7%, according to LSEG data.

Clarivate’s IP business, previously called CPA Global, offers software and services that manage patents, trademarks and contracts for law firms and corporations. It also provides the Derwent World Patents Index (DWPI) database, which contains patent applications and grants from patent issuing authorities. Clarivate agreed to combine with the business in 2020 in a $6.8 billion deal.

(Reporting by Amy-Jo Crowley in London and Milana Vinn in New York; Editing by Anousha Sakoui and Susan Fenton)