The key theme in language industry M&A and Funding in 2021 was the onset of what we have termed a new supercycle. There were more than double the number of trade sales in 2021 than in 2020. The number of funding rounds in 2021 also exceeded that of 2020.
While 2021 saw ongoing disruption from the pandemic in terms of new Covid variants, travel bans, and social distancing in the physical world, financial markets were hitting new all-time highs on a regular basis and global M&A continued its record run from 2020.
As with 2020, rock-bottom interest rates and central bank stimulus continue to motivate investors to find a home for their funds in operating businesses with solid cash flows as well as startups in 2021. Some of this capital made its way into the language industry, thanks to its historic returns, resilience during the pandemic, and promise of “AI-centricity.”
The M&A environment was extremely buoyant throughout 2021. Among the most significant trade sales were Iyuno’s acquisition of major rival SDI in March 2021, TransPerfect’s acquisition of Semantix in July 2021, Welocalize’s acquisition of NLG in July 2021, and Questel’s acquisition of Morningside in March 2021.
Financial investors also continued to play a key role in the language industry in 2021, with a record number of LSPI Leaders selling to private equity (PE) or securing significant amounts in growth equity. SeproTec, thebigword, and MotionPoint all sold majority stakes to PE, LanguageWire swapped PE backers, while Translated, Iyuno, and Smartling secured large amounts of growth equity investments during the year.
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This 46-page MA and Funding Report contains an analysis of the 2021 language industry M&A landscape, and an outlook for 2022. It contains a full list of the 62 transactions covered by Slator including price, earnings or revenue multiples paid where available, sector, country, type (trade sale, private equity investment, IPO, merger), and draws comparisons with previous years’ data.
The report also includes a section on startup funding in the language industry, with a list of 18 funding rounds covered by Slator, as well as an activity analysis. Language industry startup funding was remarkably active in 2021, and the total disclosed amount for core language industry funding in 2021 far exceeded previous years.
AI- and tech-centric pitches continued to entice investors, while remote simultaneous interpreting (RSI), as well as translation management system (TMS), and video and audio localization providers also appealed to investors in 2021.
The report features an overview of the most active verticals for M&A, analysis of the top locations for sellers, a profile of the most heavily-invested private equity firms in the language industry, and more.
The report can be used to gain a deeper understanding of what drives language industry M&A. This comprehensive set of reference data can also be taken as a benchmark for future transactions. The report can be used as a standalone resource and is best read alongside Slator’s complementary catalog of research reports and pro guides, such as the Slator 2021 Language Industry Market Report and the Slator 2020 M&A and Funding Report.
Table of Contents
|Language industry M&A and Funding at a glance: key facts and figures|
|An introduction to language industry M&A and Funding in 2021, including key trends and investors’ perspectives.|
|Analysis of the transaction valuations, revenue, and EBITDA multiples for the handful of transactions that disclosed relevant transaction information. Comparative analysis with 2017, 2018, 2019, and 2020.|
|Coverage and analysis of initial investments by financial investors — typically private equity — in the language industry (nine in 2021).|
|Analysis of mergers between two (or more) LSPs in 2021. Mergers played a less prominent role in language industry dealmaking than acquisitions in 2021, consistent with previous years.|
|Insight into the handful of share placements (three) that took place in the language industry in 2021.|
|In-depth analysis of trade sales — both external and LSP-to-LSP deals — which accounted for the bulk of transactions in 2021. Includes the strategic rationale, locations of buyers and sellers, and seller verticals, as well as profiles of the 20+ most heavily-invested private equity firms in the language industry, which help fuel M&A through buy-and-build strategies.|
|Startup Funding and Growth Investments||34|
|Analysis of top funding rounds and growth equity investments in the core language industry in 2021, focusing on key areas of funding in translation, localization, and interpreting companies.|
|M&A and Funding Outlook||39|
|Read up on what’s driving M&A and funding into 2022 in Slator’s M&A and Funding outlook.|
|A list of additional resources on M&A and Funding in the language industry, with links to SlatorPod episodes and SlatorCon presentations centered on M&A and Funding from 2019 to 2021.|
|Glossary of vertical descriptions and a table of deal advisers (e.g., legal, M&A)|
How to Use This Report
The report is a must-use reference for senior leadership and corporate development professionals at language service providers, investment banking and private equity professionals, as well as corporate strategy and finance advisers, and anyone else interested in the rapidly evolving competitive landscape of the language industry.
The information presented in this report is based on the companies, deals, and countries involved in the transactions that Slator covered between January 1 and December 31, 2021. The report does not constitute an exhaustive list and may not include smaller transactions or represent the total volume or value of M&A transactions in the language industry worldwide.