On October 18, 2022, Summa Linguae announced the acquisition of Get It (aka Getit), a fellow Poland-based language service provider (LSP) with a focus on the life sciences space.
This latest acquisition will add some USD 3.5m in annual revenues and USD 0.9m in EBITDA to Summa Linguae’s financials, according to a press statement. The LSP will pay “approximately USD 4.3m in cash and two potential annual earn-out installments to acquire 100% of Get It,” the same announcement stated.
Summa Linguae CEO, Krzysztof Zdanowski, told Slator the annual earn-out installments are contingent upon revenue retention. “For us, it was key to lock the EBITDA multiple (x5). We are happy to pay more and share the growth as long as our multiple is preserved.”
He said Get It’s revenues in 2021 came in at PLN 16m (USD 3.25m) with PLN 3.2m (USD 0.65m) EBITDA and “2022 is looking to be some 20% better.”
Prior to the sale, Get It was 90% owned by its founder, Piotr Czajkowski, and 10% by an angel investor. Czajkowski “will leave after a short transition period. All of the management will stay,” Zdanowski said.
Get It has a full-time head count of about 40 people and, post-deal, the combined organization will total some 320 employees. The Get It brand will be completely folded into that of Summa Linguae Technologies.
Summa runs on Plunet, while Get It uses XTRF, which will be phased out in favor of the former, Zdanowski said. As for translation productivity tools, the two companies use a variety of them. The CEO added, “Get It’s preference is memoQ and we will keep it as the main CAT tool for Get It clients post acquisition.”
Resilient to Inflation
According to Zdanowski, the deal began when the Get It founder approached him after a meeting of POLOT or the Polish Association of Language Service Providers, of which both LSPs are members.
Asked what attracted him to the deal, the CEO pointed out that Summa’s client portfolio currently spans three verticals — IT & tech (60%), life sciences (15%), and e-commerce (10%) — hence the interest in Get It’s life sciences expertise.
Zdanowski told Slator, “We believe clients from the life sciences space generate steady, uninterrupted demand for localization services, not so dependent on economic circumstances and resilient to potential downturns and inflation.”
Majority of Revenue From Data-for-AI
In light of recent developments in the data-for-AI space (most notably at embattled Appen), we asked for the Summa Linguae CEO’s take on the sector. According to Zdanowski, “This service line is very attractive. It keeps growing much faster than traditional localization. We are experiencing 30–40% growth in organic demand in the category and it has already become the majority of our revenue — very difficult to achieve from a much more mature and established localization client base.”
He added, “AI and AI-enabled products are at the forefront of the world’s R&D and a lot of money is poured into them. We, as their data team, are directly benefiting from it.”
A significant portion of Summa’s revenue (35%) is still derived from localization and related services. Zdanowski said, “Although our main strategic focus lies with broadly understood NLP and data services, localization is still very important and we are on the lookout for good deals in the space.”
As such, the CEO said, “Summa continues to actively look for deals. We are committed to closing one to two deals a year.”
The ideal target? “We look for profitable (10–20% EBITDA) companies between USD 3m and 10m in revenue; ideally, within the services and verticals we are already present in with a particular focus on data and NLP,” Zdanowski said.
The CEO told Slator, “We are backed by private equity and by an M&A bank loan. We are very acquisitive and always on the lookout for good partnerships.”
Summa Linguae was advised on the Get It deal by CK Legal Chabasiewicz, Kowalska i Wspolnicy and Enterium.