Lionbridge, the largest language service provider (LSP) by revenue, announced on December 12, 2016, that it had entered into a definite agreement to be acquired by private equity firm H.I.G Capital. The purchase price of approximately USD 360m represents a 17% premium over the 60 day trading average of the Nasdaq-listed company. H.I.G Capital is a Miami-based private equity group with over USD 21bn in assets.
Private equity has been moving aggressively into language services over the past few years. Major language service providers such as Moravia, Welocalize, Semantix but also smaller players like AAC Global are majority-owned by PE groups. However, taking Lionbridge private marks the biggest foray by PE into language services to date.
In a statement sent to Slator, Clint Poole, Lionbridge’s Senior Vice President of Marketing, said that Lionbridge thinks there are “many advantages to being private” at this stage of the company’s development, such as having access to additional resources for investments in technology.
Poole also highlighted the advantages of not having to manage the business quarter by quarter, reducing regulatory costs that come with being a public company, and getting the freedom to focus on the company’s long-term development.
Lionbridge’s Board of Directors has unanimously approved the deal. But the company has a regulatory obligation for a 45-day so called “go-shop” period where the board can look for a better deal. Lionbridge cautions that “there can be no assurance that this process will result in a superior offer.” At this point, it is unlikely that a strategic buyer from within the language industry emerges and tops H.I.G Capital’s offer.
Slator will provide continued coverage on the transaction later this week.