10 months ago when Danish private equity fund Catacap bought LanguageWire, they told Slator that they intend to pursue a buy-and-build strategy. And so they have. On March 19, 2018, they acquired 100% of Denmark-based Frontlab ApS. Interestingly, LanguageWire’s first acquisition under private equity ownership is not a bolt-on acquisition of another language service provider (LSP) to expand market share or vertical capabilities but a small software company that provides solutions to optimize the production of content for enterprises, LSPs, and creative agencies.
LanguageWire declined to reveal the deal price or terms, or how the deal was financed, but Language Wire CEO Henrik Lottrup told Slator that Frontlab had 2017 revenues of about EUR 0.5m, of which 80% was in SaaS fees. The company has been growing at 20% annually for the last two years and Lottrup said they expect this to continue.
To be Fully Integrated
Frontlab was a privately held company founded and owned by Ib Tørsleff and Ruvan Fernando. It has a full time headcount of five staff, who will now become part of the LanguageWire team.
Frontlab’s solution will be integrated into LanguageWire’s platform for managing multilingual content production and translation as a core component. LanguageWire owns and develops its proprietary translation management (TMS) and productivity technology. The company says this integration process will take place over 2018 in what will be “a close collaboration between LanguageWire’s development department and Frontlab’s own team”.
Integration notwithstanding, LanguageWire also told Slator that Frontlab will continue to operate under the same name and service all their existing customers. Lottrup said there are no client overlaps between the two companies.
Complement, Not Conflict
Frontlab’s solutions integrates into popular translation productivity tools such as SDL Trados, Memsource, MemoQ and Across. It counts among its client LSPs such as TextMinded (now part of Semantix), which LanguageWire competes with in the Nordics region. When asked if this acquisition creates a conflict of interest, Lottrup said, “The LSPs that currently use Frontlab will not experience any difference. They will still be able to use the Frontlab tool like today and within the coming days further information will be sent out to the Frontlab customers.”
He also revealed that they are in dialogue with other software companies too for acquisitions. However, they saw Frontlab as the market leader for solutions that improves Adobe Indesign workflows.
“For the modern CMO, our platform suite now includes the market leading solutions for both handling both online content (CMS, PIM, DAM) and offline content (InDesign etc.),” Lottrup said.
For expert analysis and a full list of all deals covered on Slator including price, earnings or revenue multiples paid where available, sector, country, type, and more, download the Slator 2017 M&A Report.