The key theme in language industry M&A and funding in 2020 was resilience in the face of Covid-19. Although there were fewer M&A transactions covered by Slator overall than in 2019, a handful of them were exceptionally large and transformative deals. There was also a similar number of funding rounds in 2020 as the year prior, showing venture capitalists’ continued interest in the industry.
The year 2020 brought major macroeconomic disruptions as Covid-19 hit economies around the world. Rock-bottom interest rates and unprecedented quantitative easing continued to motivate investors to find a home for their money by investing in cash-generative businesses servicing resilient industries. Some of this capital found its way into the language industry.
Unlike in previous years, two M&A transactions in 2020 were of major significance in changing the landscape of large language service providers (LSPs). Most notably, Super Agency RWS acquired its closest rival geographically and by revenue, SDL, to become the largest LSP by revenue worldwide. 2020 also saw the creation of another Super Agency through the acquisition of AMPLEXOR by buy-and-build specialist Acolad Group, now the largest LSP by revenue in Continental Europe.
A number of other transactions in 2020 were major private equity-led transactions and highlighted some of the thriving niches of the language industry: the data-for-AI market, healthcare interpreting, and translation management software (TMS). Overall, the M&A environment was relatively buoyant in 2020 — notwithstanding a hiatus in Q2 2020 as peak fear hit the markets — but often involved relatively small transactions.
Slator 2020 Language Industry M&A and Funding Report
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This 40-page report contains an analysis of the 2020 language industry M&A landscape, and an outlook for 2021. It contains a full list of the 39 transactions covered by Slator including price, earnings or revenue multiples paid where available, sector, country, type (trade sale, private equity investment, IPO, merger), and draws comparisons with previous years’ data.
The report also includes a section on startup funding in the language industry, with a list of more than a dozen funding rounds centered around language technology covered by Slator, as well as an activity analysis.
The report features an overview of the most active seller verticals, analysis of the top locations for sellers, a profile of the most heavily-invested private equity firms in the language industry, and more.
The report can be used to gain a deeper understanding of what drives language industry M&A. This comprehensive set of reference data can also be taken as a benchmark for future transactions.
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Table of Contents
| Executive Summary | 3 |
| Language industry M&A and funding at a glance: key facts and figures | |
| Introduction | 4 |
| An introduction to language industry M&A and Funding in 2020, including key trends and investors’ perspectives. | |
| Transaction Valuations | 8 |
| Analysis of the transaction valuations, revenue and EBITDA multiples, for the ca. ¼ of transactions that disclosed the relevant transaction information. Comparative analysis with 2017, 2018, and 2019. | |
| Financial Investors & Management Buy-Backs | 11 |
| Coverage of initial investments by financial investors — typically private equity — in the language industry (seven) in 2020), and transactions (one in 2020) where company management buys out financial investors. | |
| Mergers | 13 |
| Analysis of mergers between two (or more) LSPs, which typically involved smaller transactions in 2020 than mergers in 2019. | |
| IPOs & Share Placements | 14 |
| Insight into the handful of IPOs (two) and share placements (three) that took place in the language industry in 2020. | |
| Trade Sales | 16 |
| In-depth analysis of trade sales — both external and LSP to LSP deals —, which accounted for the bulk of transactions in 2020. From the strategic rationale, to the locations of buyers and sellers. Includes profiles of the 17 most heavily-invested private equity firms in the language industry, which help to fuel M&A through buy-and-build strategies. | |
| Startup Funding | 30 |
| Analysis of top-funded startups in the language industry in 2020. Focusing on key areas of funding in translation, localization, and interpreting startups, across platforms, technology, remote interpreting, and localization SaaS. | |
| M&A and Funding Outlook | 34 |
| From maturing PE holdings to LSPs lagging behind in technology implementation and the increasing role of machine translation in the industry, read up on what’s driving M&A and funding into 2021 in Slator’s M&A and funding outlook. | |
| Additional Resources | 36 |
| A list of additional resources on M&A and funding in the language industry, linking to SlatorPod episodes and SlatorCon presentations centered on M&A and funding. | |
| Appendix | 38 |
| Glossary of vertical descriptions and a table of deal advisors (legal, M&A, etc.) |
How to Use This Report
The report is a must-use reference for senior leadership and corporate development professionals at language service providers, investment banking and private equity professionals, as well as corporate strategy and finance advisers, and anyone else interested in the rapidly evolving competitive landscape of the language industry.
The information presented in this report is based on the companies, deals, and countries involved in the transactions that Slator covered between January 1 and December 31, 2020. The report is not an exhaustive list and may not include smaller transactions or represent the total volume or value of M&A transactions in the language industry worldwide.
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