Another week another major language industry acquisition. On October 31, 2018, Copenhagen, Denmark, headquartered LanguageWire announced the acquisition of European rival Xplanation, a Belgian-based language service provider (LSP) of similar size. LanguageWire CEO Henrik Lottrup (pictured) told Slator in an email interview that the transaction closed October 30, 2018. The terms of the deal were not disclosed.

Xplanation, led by CEO Véronique Ozkaya, who prior to joining Xplanation in 2012 worked in senior Sales positions for Lionbridge and Moravia, is based in the Belgian city of Leuven and generated USD 35m in revenues in 2017. The company was privately owned by the Belgian Herbots and Dossche families as well as the Diepensteyn Holding Company owned by Jan Toye, wealthy Belgian owner of brewery Palm.

LanguageWire, which in 2017 sold a majority of the company to Danish private equity fund CataCap, more doubles in size with the Xplanation acquisition. CEO Lottrup says that the combined revenue of the two companies will exceed EUR 60m in 2018 (USD 68m). Together the two companies have 350 employees in 19 offices across 13 countries and work with 8,000 freelancers. The combined customer count is 3,000.

Asked how the deal came about, Lottrup said that “over the last 12 months LanguageWire has been in dialogue with several LSPs in the market. Our goal has not been to become big, but to build a company that fits to our business model and where both entities strengthen the customer proposition. We found the best fit with Xplanation and relatively soon the owners agreed on the overall terms.”

Challenging Industry Leaders

Asked about the rationale for the acquisition, Lottrup said that they wanted to “combine two European specialized, technological and solution-oriented companies to create an even more powerful multilingual content provider and challenger to industry leaders.” Lottrup also highlights that Xplanation’s presence in Asia and the United States significantly broadens LanguageWire’s geographic footprint.

The two brands will be operated separately for now, but Lottrup said there’s “a clear ambition to integrate into one company operating with same brand, technology and business model.” Furthermore, the senior management teams from both companies will continue in their respective leadership roles.

Gradual Migration

In terms of technology, LanguageWire has always been a strong proponent of build over buy. The company operates on a proprietary translation management and productivity platform that covers much of the supply chain. Lottrup confirmed that they “will gradually be migrating Xplanation’s customers to LanguageWire’s platform. This will happen over the course of the next two years and in close dialogue with each customer.”

Asked about recent developments in neural machine translation and how they are impacting LanguageWire’s business, Lottrup says that they have already made operational adjustments and highlights that the Xplanation acquisition “will not affect our investments in machine learning and NMT tools. Already, today LanguageWire is investing significantly into this area.”

With this latest acquisition, October 2018 is shaping up to be one of the busiest months ever in language industry deal making, as LanguageWire’s acquisition of Xplanation comes hot on the heels of Technicis’ acquisition of AAC Global and IP translation provider MultiLing being acquired by IP Service Provider Questel. The month even saw a successful IPO of Straker Translation on Australia’s ASX in a listing that values the New Zealand LSP at over USD 60m.

LanguageWire was advised on the transaction by EY-Parthenon, Deloitte and Danish law firm Gorrissen Federspiel.

Rasmus Lokvig, Partner at CataCap, will speak at SlatorCon Zurich on November 29th.