GE Ventures, the venture capital subsidiary of General Electric Company (GE - Analyst Report) , and Allied Minds, an intellectual property commercialization firm, recently collaborated with each other to seek new growth opportunities for start-ups and entrepreneurs. The financial details were, however, kept under wraps.
As part of its operations, Allied Minds reviews countless intellectual property opportunities from some of the best universities and federal labs of the country to indentify commercialization prospects and viability of the projects. Once an upcoming technology gets ratified after due diligence, Allied Minds forms, funds and manages a subsidiary company for commercialization of the project with the inventors and their institutions getting an ownership stake in it.
On the other hand, GE Ventures offers an easy access to the state-of-the-art technology and extensive intellectual property portfolio of its parent firm General Electric through licensing, technology transfer, joint development, and other strategic business models. In addition, it boasts unrivalled resources including 35,000 engineers, 5,000 research scientists, 8,000 software professionals and 40,000 sales, marketing, and development executives across 100 countries to tap the business potential of the nascent technology.
The strategic alliance will seek to leverage Allied Minds’ commercialization process and GE Ventures’ innovation expertise to explore fundraising, start-up development, and management capabilities of start-ups and budding entrepreneurs. The joint venture agreement further gives Allied Minds the exclusive right of first refusal to license certain General Electric technologies that are of strategic interest to the companies. General Electric will also have the opportunity to invest in select projects of Allied Minds’ network that includes over 160 university and federal research partners.
In order to augment its revenues, General Electric has also initiated steps to supplement its digital presence in Europe and foster growth of the industrial ecosystem for the continent’s overall development. The strategic move is largely fuelled by the market predictions that digitization of products and services is likely to yield an excess of 110 million Euros in annual revenues in Europe over the next five years.
General Electric has also opened a new digital office in Paris – Digital Foundry, which is likely to be the hotbed for the industrial ecosystem. The Digital Foundry forms a global network of centers through which GE Digital intends to incubate local startups, form client collaborations to develop new applications and extend the burgeoning community of industrial developers in Europe. GE Digital also acquired Meridium, Inc., a global leader in asset performance management (APM) software and services for asset-intensive industries. The acquisition will facilitate GE Digital to augment its comprehensive APM offering by leveraging Meridium’s expertise in cognitive analytics, reliability centered maintenance, operational risk management and asset health, as well as intelligent asset strategies.
We remain encouraged with such strategic endeavors of this Zacks Rank #2 (Buy) stock. Some other favorably ranked stocks in the industry include Raven Industries Inc. (RAVN - Analyst Report) , Sumitomo Corporation (SSUMY - Snapshot Report) and Barloworld Ltd. (BRRAY - Snapshot Report) , each carrying the same Zacks Rank as General Electric. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Raven has a long-term earnings growth expectation of 10% and is currently trading at a forward P/E of 45.0x.
Barlow has a long-term earnings growth expectation of 7% and is currently trading at a forward P/E of 10.2x.
Raven has a long-term earnings growth expectation of 5% and is currently trading at a forward P/E of 11.3x.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>