|Rank||Company||Revenue, million euros||Revenue data for||Acquired by||Profile|
|2||Datawords||€55.00||2017||marketing & loc|
|5||HL Trad||€16.50||2017||Technicis in 2018||translation|
|6||Mapi group||€14.00||est 2016||Icon in 2017||CRO, total revenue 70 mil euros|
|7||Linguistique Communication Informatique||€12.00||2016||Novae Group in 2018||marketing & loc|
|10||TextMaster||€10.00||2017||Technicis in 2018||translation|
|12||Telelingua France (part of Telelingua group)||€7.00||2016||Technicis in 2018||translation|
|15||Exequo||€5.30||2016||Lionbridge in 2018||videogame services|
In the past 2 years, 5 out of the 15 largest French language services companies have been acquired. Two leading finance-backed LSPs added 90 million euros in revenue by buying up smaller firms, and grew by 130 percent. Dozens of smaller deals also took place under the radar.
Benjamin du Fraysseix’s Technicis group, backed by venture capital firm Naxicap Partners, has acquired three mid-sized companies in 2018.
As a result, the group’s combined revenue jumped from 30 to 100 million euros. We expect Technicis to continue its roll-up strategy by acquiring mid-size companies in key markets.
Datawords, under the leadership of Alexandre Crazover, shopped for acquisitions outside the language industry. They added digital and content companies using finance from their investors, Cathay Capital, Bpifinance, and Capzanine.
Consequently, the company’s revenue increased from 40 million euros in 2016 to 60 million euros (2018 target).
Add the acquisition of the game services firm, Exequo by Lionbridge, and the acquisition of MAPI clinical research firm by ICON, and you’ll get the picture of just how hot the French market really is for M&A.
In our experience, US-based build-and-buy LSPs have been apprehensive of the French market due to a high tax burden (top-5 in Europe) coupled with the tradition of employees to unionize. Someone always protests in France – if not your own company, then airline pilots, taxi drivers, or perhaps dairy farmers are on strike, clogging roads with tractors and spilling milk in the streets. Instead of France, these investors looked for acquisition targets in Germany, Poland, Sweden, and the UK. Before they could make up their minds however, French groups made their move, and thoroughly scooped up the mid-market.
Their question is probably – is this the right time to sell?
It’s unlikely that mid-sized LSP numbers will increase by smaller firms growing up. Challengers such as ITC, Powerling, and Labrador Translations still have a long way to go to reach 10 million euros. Organic growth rates are typically very modest in France since it is a very mature market. All of the companies in the 10+/- million euro range have been in the business for years, or even decades. The only exception is Lylo Media. Founded in 2012, Lylo Media is a dubbing and subtitling company that specializes in the explosively growing segment of media localization.
As the mid-sized language services companies get gobbled up by larger players, clients face fewer options. In the new vendor landscape, buyers can either go with a very large group and become one of their many clients or choose a much smaller company.
Companies acquired by Technicis continue to operate under their own brands as independent units. However, this approach of sewing together successful companies should eventually give way to optimization and integration. sales and management teams, portfolios, and software, and processes will become more uniform. Once Technicis group has a centralized vendor management function, their suppliers will face vastly different business conditions when negotiating rates and deadlines.
In the UK, two mid-sized LSPs out of the top-20 have been acquired in the past year, translate plus and Language Connect. At the same time, top providers, RWS and SDL, have put on a lot of weight via acquisitions, and the distance between them and the next translation provider looks insurmountable.
In Russia, the landscape has been reshaped by the merger of ABBYY LS/Traktat and the rapid growth of Janus. Instead of 5-6 medium-sized companies competing shoulder to shoulder as was the scene 5 years ago, today’s market is overshadowed by two players with USD 20+ million each.
In the Nordics, finance-backed LSPs are actively consolidating businesses. The leader Semantix has acquired mid-sized players, TextMinded and Amesto. Dutch LiveWords is another company very active in M&A, especially after it was acquired by Bencis Capital Partners in 2016.
France may have seen an extraordinary M&A spree, but a similar situation is also developing in the other countries.
Mid-sized companies sell like hotcakes everywhere.
When considering selling a company there are simple things you can do generate buyer interest. Here’s what you need to know about mergers and acquisitions.
Podcast: The M&A Conversation: How to Prepare for Growth or Exit Buying and selling companies has become a regular activity in the language services market. Whether you are planning to grow your revenue or to retire, it is useful what is the process and how to develop conversations around the value of your business. Jonathan […]
Today’s news in the industry is that Welocalize has acquired SearchStar –a firm specializing in digital media buying, analytics, and conversion, further increasing their already-impressive capabilities in the realm of digital marketing performance services. Combined with Welocalize’s recent acquisition of Adapt Worldwide, which enhanced Welocalize’s multilingual SEO offerings, this latest acquisition builds out Welocalize’s ability […]
On Friday, a new company was born from the merger of Stratus Video and InDemand Interpreting. Together, they are now the third largest interpreting company in the world, with a combined revenue of over USD 100 million, and possibly the leader in medical remote interpreting. Stratus and InDemand Mergeand Become the Third Largest Interpreting Group […]