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*New* Slator 2022 Language Industry M&A and Funding Report out now

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Financial Results • By Anna Wyndham On 23 Mar 2022

RWS Buys Liones, Forecasts FY 2022 Revenue to Reach USD 1 Billion

RWS Buys Liones, FY 2022 Revenue to Reach USD 1 Billion

RWS announced, on 23 March 2022, the acquisition of Dutch content and authoring tech company, Liones Holding BV. Purchase price was EUR 17.5m (USD 19.3m). Additional payments of EUR 2.5m (USD 2.75m) will be made at intervals of one year and two years after completion.

The deal marks RWS’ second acquisition since the appointment of CEO Ian El-Mokadem in June 2021. In the first deal, RWS tucked in Japan patent company Horn & Uchida in July 2021.

Liones recorded an operating profit of EUR 2m (USD 2.2m) on revenues of EUR 4.9m (USD 5.4m) for the year ended December 31, 2021, giving the deal a revenue multiple of 4.6x based on the total purchase price, including follow-on payments.

Already a player in the structured content market with its product Tridion Docs, RWS will now own Liones’ flagship product Fonto, a cloud-based authoring solution. The platform will, according to CEO El-Mokadem, “enhance RWS’ capability to enable our customers to make the optimal use of their content.”

Ahead of hosting a Capital Markets Event webcast on March 23, 2022, RWS also shared its FY 2022 update. Reporting a positive start to the current financial year, RWS aligned with analysts’ forecast consensus: GBP 761.2m in FY22 revenue (USD 1bn) and GBP 140m (USD 185m) in adjusted pre-tax profit.

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RWS said its Regulated Industries division continues to perform well, following strong results in FY 2021. The Language and Content Technology division has seen accelerated growth, but IP Services reported a slowdown linked to upcoming changes in the European patent system.

Meanwhile, the company’s SaaS revenues are building faster than anticipated. RWS sees SaaS making up 25% of overall technology revenues for FY 2022–24, and more than 50% for FY 2024–2026.

RWS said it is closely monitoring the Ukraine-Russia situation. In terms of regional operations, the company has 55 staff who are Ukrainian citizens and 80 staff located in St. Petersburg. The RWS Kyiv office is currently closed.

In terms of organic growth, RWS’ update set out targets for 4% growth, in line with the market for FY 2022–24, and 6% growth — outperforming the market — for FY 2024–2026.

March 24, 2022 Update: Investors reacted negatively to the announcement with RWS shares down by as much as 30% on the day of the announcement. At the time of the update on March 24, 2022, shares are still down 25% compared to the day before the announcement. Investor concerns likely center on the conservative forecast and the impact of Europe’s Unitary Patent (UP). RWS said in its Capital Markets Event on March 23, 2022 that the likely revenue impact of the UP would be GBP 12m in FY22, with around GBP 25m of revenue and GBP 8m of EBITDA potentially at risk on an annual basis.

Slator will provide further coverage of the Capital Markets Event in the coming week.

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content authoring RWS SaaS
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By Anna Wyndham

Senior Research Analyst at Slator. Linguist and hiking enthusiast. Based in Madrid.

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Slator is the leading source of news and research for the global translation, localization, and language technology industry. Our Advisory practice is a trusted partner to clients looking for independent analysis. Headquartered in Zurich, Slator has a presence in Asia, Europe, and the US.
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