Slator covered Spain-based MondragonLingua’s acquisition of New Jersey-based Global Word Inc in a brief article. We reached out to MondragonLingua CEO Adelaida Maidagan Lazkano to find out more details about the deal.
Though Lazkano was not able to disclose the size of the deal and, therefore, the multiple paid, she shared exclusive and interesting details surrounding the two companies and their plans.
Slator: Can you tell us a bit more about how the deal was managed?
Lazkano: “We conducted comprehensive Due Diligence with [advisory firm] IZAR CAPITAL Group. [We also took] counsel from The Law Office of Raymond T. McKenzie, Esq. and LKS Lawyers in Spain.”
Based in Washington DC, Izar Capital Group is a boutique advisory and merchant banking group. Raymond McKenzie is a corporate and franchise law attorney based in Maryland, USA, while the LKS Group is a legal reference focusing on the Spanish professional services sector.
Slator: How did MondragonLingua finance the acquisition?
Lazkano: “We got the backing of Luzaro, a Basque Government’s financial institution that provides advantageous finance in the form of participative loans, which are then materialized by certain banks, in this particular case by two Spanish banks, 50% each.”
Luzaro EFC SA is a financial institution that grants equity loans for financial investments and consolidation, and development of internationalization processes.
Slator: Can you tell us a bit about both companies in terms of full time employees and management structure, as well as share your plans for the two companies post-acquisition?
Lazkano: “MondragonLingua has an average of 250 employees (138 FTEs) and Global Word has got 10. MondragonLingua’s group revenue prior to this acquisition is EUR 9 million [USD 9.8 million]. [Global Word Inc] will eventually most probably be integrated with our subsidiary in the USA, Mondragon Lingua USA Inc, [with an integration timeline of] one or two years. One of the two [Global Word] partners continues working in the company in a senior management position, mainly related with production. Sales strategy and technological innovation will be MondragonLingua’s main contribution.”
It appears that for Global Word’s partners, the acquisition was a planned exit strategy with one of them exiting from the company after what its website claims is more than three decades of operation.
Slator: In the press release for the acquisition, it was reported that MondragonLingua acquired Global Word for strategic purposes, particularly for expansion into the US. Can you briefly elaborate on MondragonLingua’s expansion and growth strategy?
Lazkano: “The translation industry is growing as a consequence of the globalization of the economy and the growing need to communicate in other languages. It is a very atomized industry with over 27,000 Language Service Providers in the world, 80% of which employs less than 10 people, which means there is opportunity for M&A processes. On the other hand, the capacity to offer technology based solutions is becoming a key competitive advantage in this mature market and the size of the companies is tightly related with this capacity. So MondragonLingua wants to continue strengthening its competitive position through its plans for growth, both in Europe and in the USA.”
Slator: So MondragonLingua is actively considering more potential acquisitions as part of its strategy for growth?
Lazkano: “We’ve been in talks with several other potential candidates and will continue doing so. This does not mean we’ll get into another M&A process right away, but it’s always important to know how the market is moving for when the time comes.”