Who’s Behind the Merrill Translations Buyout?

As we exclusively reported on April 14, 2016, Merrill Corp. is selling off its translation services arm Merrill Translation Services. The buyer: a new company called United Language Group (ULG), headed by original Merrill Translations founder Jeff Brink as CEO.

Brink is not going to buy out the business on his own though. The transaction will be financed by Minnesota-based private equity firm Northern Pacific Group, according to a report in the Minneapolis Business Journal. The report picked up on an earlier press release published by ULG on April 20, 2016, which publicly announced the deal.

Northern Pacific was set up in 2012, according to Managing Partner Jeff Greiner’s LinkedIn profile. It made the first two investments in July 2014 and March 2015 when it acquired analytics and financial reporting software-maker Delaget and marketing-tech company Outsell.

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The firm labels itself as a growth equity investment firm, which tries to position itself somewhere between venture capital and traditional private equity investments. The company currently has four employees.

According to the Business Journal article, Northern Pacific expects to invest between USD 20m and USD 25m in each company, with a maximum of USD 50m per transaction. That would give ULG enough firepower to look at acquiring language service providers in the lower- to mid-sized range.

Acquisitions are definitely in the cards for ULG with Northern Pacific Group partner Peter Offenhauser saying they “expect to be very active in this highly fragmented USD 40-billion industry.”

It appears Northern Pacific has not actually closed its first official fund yet, according to the same Business Journal article; but is nonetheless doing initial investments now.

According to a PitchBook Data report for 2015, Northern Pacific targets to raise USD 250m for its Northern Pacific Group Investment Partners fund.

Interestingly, prior to setting up Northern Pacific, Managing Partner Jeff Greiner was a Senior Advisor at Norwest Equity Partners, the investor backing Welocalize.

Private-equity firms have become a driving force in the language services market. Since the beginning of 2015, when PE firm Zurmont Madison exited CLS Communication with a trade sale to Lionbridge, a number of high profile investments have been announced.

Moravia kicked off the current investment cycle when it announced in February 2015 that New York investment firm Clarion Capital Partners acquired a majority stake in the localization services company.

In June 2015, Semantix changed hands as Litorina Kapital sold the Swedish LSP to fellow PE firm Segulah. In the same month, Norwest Equity Partners took a significant stake in Welocalize.

In January 2016, French PE group Naxicap announced the acquisition of Paris-based LSP Technicis. In the same month, Finland appeared on the PE map, as Finnish private equity firm Korona Invest bought AAC Global, the language services arm of media company Sanoma.

A spokesperson for ULG told Slator that the company will be available to answer questions around the transaction after the close of the deal.