According to a regulatory filing, RWS paid EUR 30.1m (USD 33.1m) at closing. Deferred payments of USD 7.1m, due on the first and second anniversary of completion, respectively, bring the total purchase price to USD 47.3m.
The deferred payments are “conditional on the Propylon management team remaining in place.” If the deferred payments are made, the deal would value Propylon at over 3x annual revenues (USD 12.7m for 2022), and approx. 15x EBITDA.
Propylon’s flagship product is a component content management system for drafting, managing, publishing, and updating legal and legislative content. The company’s list of clients with multi-year contracts includes a number of US State legislatures and national parliaments.
Founded in 1999, Dublin-headquartered Propylon has approximately 100 employees in Ireland and the US. Current CEO John Harrington will continue to manage Propylon during the transition period and beyond.
The filing described the deal as “in line with [RWS’] strategy to actively pursue acquisitions” — the most notable being, of course, the company’s November 2020 acquisition of competitor SDL for USD 817m. Since the SDL deal, RWS has bought Japanese patent translation agency Horn & Uchida (July 2021) and Dutch content tech company Liones (March 2022).
The Propylon acquisition further builds out RWS’ content management stack and may also serve as a content on-ramp for the language services business.
RWS’ half-year results, released in June 2023, showed USD 460m in revenue, with sales contracting by 6.8% in organic constant currency (OCC). The company’s full-year revenue outlook is approximately USD 938.1m, slightly under full-year 2022 revenues of USD 940.1m.
Resuming work on previously postponed projects, plus launching new products and initiatives, will contribute to increased organic growth in the second half of 2023, CEO Ian El-Mokadem said in an earnings call.
Propylon may well have been one of the targets El-Mokadem referred to as “attractive opportunities to deploy our cash,” adding that RWS was already “at an advanced stage with a number of bolt-on opportunities.”RWS Group CEO, Ian El-Mokadem, will deliver the keynote presentation at SlatorCon Zurich 2023 on October 4.