Backed by Private Equity, Three German Language Service Providers Form T-Works

Germany remains one of the most fragmented markets with 1,000+ language services providers (LSPs) competing for business from the country’s numerous export-oriented multinationals. Markets such as the US, the UK, and the Nordics have seen considerable consolidation among LSPs over the past three years while Germany has more or less remained on the sidelines. Even when small to mid-sized German LSPs have been snapped up by the likes Wieners + Wieners, Straker, Xplanation, Transline, and BTI Studios, the deal size has remained relatively limited.

Against this backdrop and financed by private equity, three German LSPs, Ü-Werk, WOK (Wohanka, Obermaier & Kollegen) and Enssner Zeitgeist Translations, have been working behind the scenes in 2018 to form a new company called T-Works.

Financing the venture is private equity firm AUCTUS Capital Partners. The Munich-based firm invests in companies that generate revenues of between EUR 10-150m and are based in the DACH region (Germany, Austria, Switzerland).

Slator spoke to Marius Haisch, Associate at T-Works, to find out about the details of the merger. Haisch told Slator that the three companies – Ü-Werk, WOK and Enssner Zeitgeist – will be collectively known as the T-Works group of companies going forward but will continue to operate separately.

The partner companies will look to club together where and when it makes sense to do so, e.g. to jointly pitch for certain customers, participate in tenders together and leverage investment in technology, vendor and workflow management, Haisch also said. The main goal of the merger, Haisch underlined, was to “improve the quality and speed of customer service.”

Skin in the Game

Haisch confirmed that “AUCTUS owns the majority in T-Works but the three founders (Barbara Wohanka, Florian Obermaier and Christian Enssner) are also significant shareholders on the top level of the holding structure.”

Highlighting the different responsibilities that each party will have, Haisch said that the founders will stay on as Managing Directors and will be “primarily responsible for strategy and operations of T-Works whereas AUCTUS will mainly support with its experience in building larger groups through organic growth and M&A.”

WOK, Ü-Werk, Enssner have a combined headcount of about 190 staff across ten European locations. WOK is headquartered in Geisenhausen, Ü-Werk in Landshut, and Enssner in the city of Schweinfurt.

Although there is no customer overlap at all between the T-Work partner companies, Haisch said, “there has been a very close and long-lasting business relationship between Enssner and WOK.”

The companies are currently using different translation management systems (TMS), which Haisch says they plan to integrate. All companies use “commercially available server-based CAT systems. And yes, there are plans to streamline this under T-Works,” Haisch added.

Haisch explains that he thinks neural machine translation is a “very interesting topic” and says that the company has “set up a dedicated team of translators and MT experts who are constantly working on different MT solutions and their implementation in our operations.”

T-Works as M&A Platform

Asked whether AUCTUS envisions a buy-and-build strategy with T-Works as the platform, Haisch affirmed that “yes, we believe there is a clear strategic rationale for further selective acquisitions both in Germany and internationally.”

AIOS acted as M&A advisor on the WOK transaction, which completed in December 2017, Capitalmind acted as M&A advisor on the Enssner Zeitgeist deal, which closed in June 2018, and Schlawien Partnerschaft mbB were advisors on legal matters.

Correction: Marius Haisch is an Associate at T-Works, not AUCTUS Capital as previously stated in this article