Fidel Technologies, a Tokyo-based mini-conglomerate active in language and staffing services, fintech, and IT services, announced it had acquired LinguaNext on November 30, 2016. A software localization platform developer, LinguaNext was owned by VC fund Helion Venture Partners for three years prior to the sale.

Post-acquisition, the company was rebranded as LinguaSol, reflecting the change in value proposition from products-only to solutions and services. Hence the “sol” in the new name, explained Fidel CEO Sunil Kulkarni, to whom Slator reached out regarding the acquisition.

“Fidel is roughly a USD 4m firm and LinguaNext is roughly a USD 1.5m firm [in revenue terms],” said Kulkarni, who declined to comment on the price or earnings multiple he paid for LinguaSol. Kulkarni did confirm, however, that he is now the CEO of both Fidel and LinguaSol “for the time being” and, at present, Fidel has “no other external investors besides myself.”

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He said they intend to eventually name a new CEO for LinguaSol “as the product basket and the geography coverage increase.”

Due to the service nature of the business, we prefer to work with the tools provided or requested by the clients—Sunil Kulkarni, CEO of Fidel Technologies

Regarding the motivation behind the acquisition, Kulkarni said that although Fidel had been in services, it “lacked the solution or the products side of it.” He added that LinguaSol is already working on its own machine translation (mainly for Indian and other Asian languages), TMS, and post-editing framework, “which we will start using internally in the coming year. Once tested and fine-tuned, we want to make it available to our partners and ecosystem.”

Asked what translation productivity tools and TMS technology the two companies use to manage the translation services side, Kulkarni replied, “Due to the service nature of the business, we prefer to work with the tools provided or requested by the clients,” naming SDL Trados, Memsource, memoQ, “and a few others.” [The company’s localization services division, Filose, is an authorized reseller of SDL Trados and Systran, according to the company website—Ed.]

The LinguaSol acquisition was financed through “bank loans and internal accruals” and “local partners or firms in Pune, India,” advised on the deal, according to Kulkarni.

This is Fidel’s third acquisition. In 2014, they acquired the small localization team of CSC KK (not to be confused with American multinational IT company CSC), which Kulkarni describes as “a Japanese company in Japan” into systems integration.

Earlier this year, Fidel took a majority stake in a small Japanese patent translation firm specializing in Asian (Chinese, Japanese, Korean) languages. Kulkarni declined to name the firm. He said, “Currently, it’s not even mentioned anywhere on our website,” adding that they plan to announce the deal by mid-2017. The CEO described the acquisitions as strategic in terms of providing support to key clients and gaining access to local Japanese talent.

LinguaSol will continue to exist as a separate entity. At the time of the acquisition, Fidel’s headcount stood at 194, and LinguaSol’s at 30.