Marquee Asset What It Means How It Works Example
Marquee Asset: What It Means, How It Works, Example
What Is a Marquee Asset?
A marquee asset–also called a "flagship asset" or "crown jewel"–is a company’s most prized possession. It is a highly visible symbol of success and often contributes the most to the bottom line. A company with a coveted marquee asset may become a target for a bigger rival or a rival with deep pockets, even if the rest of the company’s portfolio is less significant.
Key Takeaways
– A marquee asset is a company’s most prized and valuable asset.
– The marquee assets can be physical or intangible, such as goodwill or patents.
– The "crown jewel" defense is a hostile takeover defense that involves selling the target firm’s marquee asset to make it less desirable to the acquirer.
Understanding Marquee Assets
Marquee assets are common in smaller companies that have limited resources and focus on specific industries, like resources and biotechnology, rather than large, diversified companies. A mineral property with significant mineable resources might be considered a junior exploration company’s marquee asset. For a small biotechnology firm, a medication with sales in the hundreds of millions of dollars would be its marquee asset.
Companies are generally unwilling to part with their marquee asset unless they are in dire financial straits. However, smaller firms with marquee assets may face the risk of a hostile takeover as larger firms seek to acquire and utilize these assets. In such situations, the buyer may shut down the smaller company’s operations after taking the marquee asset. To preempt this risk, the company possessing the marquee asset may employ a "crown jewels" defensive maneuver by selling off the asset.
Example of Marquee Assets
Marquee assets can be tangible or intangible benefits to a company. For instance, an algorithm developed by a company to decipher and present data uniquely to its industry could be considered a marquee asset. Patented technology and manufacturing processes that are difficult to reverse engineer and mass-produce can also be marquee assets. Additionally, the knowledge, connections, and reputation of a key individual within the company can be considered marquee assets. Some companies also consider brand names and brand recognition as marquee assets.
