The global language industry remained resilient in 2022, despite macroeconomic uncertainty, global inflation pressures, and fears of an energy crisis in Europe. Globally, M&A deal volumes have slowed significantly compared to the record set in 2021. Debt-financed acquisitions have become more challenging as a result of rising interest rates.
Nonetheless, private equity remained very active in 2022. Language service providers (LSPs) in particular remained attractive acquisition targets for private equity given that they are typically profitable companies, as opposed to unprofitable startups further out on the risk curve.
Moreover, LSPs are also perceived by some investors as the beneficiaries (and potential winners) of the ongoing AI boom; mostly because they already have a deep understanding of how AI can be added to real-world, useful workflows.
Slator covered a similar number of M&A transactions in 2022 as in 2021. There were more trade sales but fewer financial investments by private equity in 2022 compared to 2021.
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This 44-page report contains an analysis of the 2022 language industry M&A landscape, and an outlook for 2023. 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 remained active in 2022. AI- and tech-centric pitches continued to entice investors, while speech-technology applications (e.g., machine dubbing) became more favored among investors.
The total disclosed amount for core language industry funding in 2022 was lower than the previous year but higher than in 2020.
The report also features an overview of the most active verticals for M&A, an 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.
M&A Advisory Services
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 2022, 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. Five-year comparative data.|
|Coverage and analysis of initial investments by financial investors — typically private equity — in the language industry.|
|Mergers, IPOs, MBOs, and EOTs||15|
|Analysis of mergers (between two LSPs), initial public offerings (IPOs), management buyouts (MBOs), and employee ownership trusts (EOTs).|
|In-depth analysis of trade sales — LSP-to-LSP deals — which accounted for the bulk of transactions in 2022. Includes the strategic rationale, locations of buyers and sellers, and seller verticals.|
|Private Equity Profiles||27|
|Profiles of the 20+ most heavily-invested private equity firms in the language industry, which help fuel M&A through buy-and-build strategies. Includes analysis of private equity exits in 2022.|
|Startup Funding and Growth Investments||35|
|Analysis of top funding rounds and growth equity investments in the core language industry in 2022, focusing on key areas of funding in translation, localization, and interpreting companies.|
|M&A and Funding Outlook||40|
|Read up on what’s shaping M&A and funding into 2023 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 centered on M&A and Funding from 2020 to 2022.|
|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 LSPs, 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 tracked and / or covered between January 1 and December 31, 2022. 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.