In industry, a company’s value is no longer measured solely by the tonnage of its machines or the surface area of its warehouses. Analysis of our assignments over the 2017–2025 period shows that the Industry, Machinery & Equipment sector represents our fourth pillar of expertise.
Whether in Deep Tech, advanced robotics, or measurement equipment, value is shifting from hardware to intangible assets: patents, embedded software, know-how, manufacturing secrets, and more. The following are the key methods and trends for valuing these tangible assets that have become intelligent.
1. Technology Takes Precedence over Brand
Unlike the luxury sector, where brand is often dominant, in the industry, it is patented technology or technical know-how that captures the largest share of valuation. The evaluator’s task is to isolate the intrinsic value of the technical innovation from the other assets.
The Tech/Brand value gap: In a recent case involving a specialist in robotics and cobotics, our analyses revealed a striking disproportion. The patented technology enabling the memorization of technical gestures was valued at more than €13 million, while the associated brand represented only around €2 million, which is already significant.
The breakthrough premium: For energy-efficiency innovations still protected by manufacturing secrets, valuations can rise sharply when the addressable market is global. We observed operating license valuations exceeding €70 million, based on future cash flow projections, DCF, well before mass production.
2. The Challenge of Embedded Software and the IP Box
A major trend observed over the past two years is the valuation of software within the machine. Many industrial SMEs are unaware that they may be eligible for the favorable IP Box tax regime on the software component of their physical equipment.
Distinguishing hardware from software: For a global leader in testing and measurement devices, the assignment consisted of determining what share of the machine’s selling price derived from the integrated detection software.
The verdict in numbers: The analysis revealed that the software license could contribute between 43% and 50% of the overall value of the finished product. This method allows a hardware sale to be partly reclassified, from an accounting perspective, as intellectual property income, thereby optimizing innovation taxation.
3. Justifying International Flows: Transfer Pricing
Industrial groups often manufacture in one country and sell in another through subsidiaries. Valuation then serves as a legal tool to justify financial flows, namely royalties, between the parent company holding the patents and its distribution entities.
Calibrating the royalty rate: In the high-precision sensors sector, MEMS, we were engaged to audit the remuneration terms of a license granted to a U.S. subsidiary. The market study validated a royalty rate between 0.05% and 0.8% of revenue, thereby supporting transfer pricing compliance.
The “forced” license: In construction litigation contexts, valuation may be used to establish a license price to avoid patent infringement proceedings. Our experts recommended royalty rates of around 2.5% to allow a competitor to use a patented process on a specific construction site.
4. From R&D to Market: The Evolution of Methods
Industrial valuation follows the product life cycle. Our methods adapt depending on whether the machine is at the prototype stage or in mass commercialization.
Seed stage, cost approach: For young innovations, such as innovative professional cooking devices, we monitor development costs and early patents to establish value, estimated here at just under €1 million for the patent.
Maturity stage, income approach: For installed equipment, such as industrial valve systems or precision engraving technologies, the future royalty approach takes over to reflect the actual market position and recurring sales.
Conclusion
Valuing an industrial company today requires a dual reading. It is no longer enough to audit the machine fleet; one must evaluate the “grey matter” that drives it. Whether preparing for the sale of logistics storage technology or structuring an electronic components group, the financial expert must be able to dismantle the value creation mechanism, bolt by bolt, line of code by line of code.
