RPX Corporation (NASDAQ:RPXC), a leading provider of patent risk management solutions, today announced that it has executed definitive agreements on its largest syndicated transaction to date with the participation of more than 10 RPX clients. RPX will invest approximately $46 million of its own capital in the transaction, which will serve to significantly increase RPX’s portfolio of patent assets and remove the potential exposure Altitude Capital Partners (ACP) and its management arm, Altitude Capital Management LLC (ACM), present to RPX clients. ACP is a private equity fund whose portfolio companies have generated more than $700 million in licensing revenue since 2005.
Upon the close of the transaction by the end of April 2012, RPX will obtain:
- Ownership or rights to more than 500 US (and more than 50 non-US) patents held by Digitude Innovations LLC (Digitude), an ACP portfolio company, and certain sub-license rights to patents licensed exclusively by Preservation Technologies LLC (Preservation), a subsidiary of Digitude;
- The dismissal of 22 lawsuits in which 10 RPX clients are defendants;
- Certain restrictive covenants from Robert Kramer, the founder of ACM and ACP, to prevent Mr. Kramer from licensing patents against the RPX client network for an extended period of time; and
- Unique data, market insights and NPE analysis expertise of ACM.
The transaction will increase RPX’s total portfolio of patent assets by more than 30%. The company will not increase headcount or ongoing operating expenses as a result of the acquisition.
“This transaction represents immediate substantial savings and value creation for a significant portion of our client network by acquiring and neutralizing a large patent portfolio and pre-empting the future activity of a highly successful NPE,” said John A. Amster, Chief Executive Officer of RPX. “This innovative transaction demonstrates that we are executing our vision for a more rational marketplace where prolonged litigation is not required for a fair exchange of patent value. Our approach to negotiating long-term, restrictive covenants ensures that our investment is not recycled to create more patent litigation and expense for our client network.”
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