It’s been a strong year for the language industry. Language service providers (LSPs) and localization buyers have aggressively stepped up recruiting. Funding of tech-enabled and pure-play translation and localization technology startups has reached new heights. And M&A activity has been stronger than ever as measured by the numbers of deals completed.
On the stock market, the performance of listed LSPs has been a mixed bag, however. In a year that saw global markets set all-time highs seemingly every other week, the fortunes of the dozen listed LSPs and LSP operating conglomerates diverged.
Leading the pack in 2021 was media localizer and remote dubbing technology firm Zoo Digital, whose shares doubled as investors rediscovered their conviction in media localization on the back of a restart of Hollywood productions. Coming in second was AMN Healthcare, which added 77% in 2021. The US telehealth provider’s acquisition of video remote interpreting platform Stratus Video continues to deliver and contribute to strong earnings.
Rival remote interpreting provider LanguageLine, meanwhile, continues to delight investors in parent company Teleperformance. The French call-center giant’s shares added nearly 40% in 2021 as the company ended the year with a market cap of over USD 26 billion. Teleperformance remains a dark horse for another mega acquisition in the language industry.
Shares in Super Agency RWS rose a more measured 20% in 2021 as the company reported its first financial year after its transformative SDL acquisition. One highlight during the year for RWS was the outperformance of its regulated industries division, which contributed to solid organic revenue growth. In June 2021, RWS also appointed Ian El-Mokadem as new Group CEO.
Shares in Asia-Pacific-based Honyaku Center and Straker Translations were up 13% and 7% respectively in 2021. Honyaku benefited from a general easing of strict 2020 Covid-restrictions in Japan, while Straker started benefiting from its huge IBM win.
Video game services giant Keywords Studios hired a new CEO in 2021 as Andrew Day, long-standing CEO of the Ireland-headquartered company, decided to bring forward a longer term retirement plan following a leave of absence due to health reasons. Former Novartis executive, Bertrand Bodson, took on the role of CEO in late 2021. Investors will look to Bodson to reenergize Keywords’ share price, which traded flat over the whole of 2021.
Telehealth provider Cloudbreak lost some ground after its SPAC IPO in 2021. US-based Cloudbreak’s Virtual Care Infrastructure segment includes VRI-provider Cloudbreak, which brought in USD 19.2m in revenue in its most recent quarter and was UpHealth’s biggest contributor for the quarter in terms of both revenue (ca. 40%) and gross margin.
Shares in Japanese machine translation provider Rozetta shed over 20% in 2021 as the company completed its transition to an MT-only company. In Australia, access services and tech provider AI Media posted a strong first quarter for its financial year 2022 on the back of earlier acquisitions. Investors were unkind to the Sydney-traded LSP and shares lost over a quarter in 2021.
Coming in last were data annotation provider Appen (whose offering includes language data) and e-commerce company The Hut Group (which acquired UK-based LSP Language Connect, now rebranded to THG Fluently). Appen shares fell 56% in 2021 as investors reacted to slower-than-expected sales and profit growth and generally cooled to data annotation as a business given a much more competitive market. THG Fluently shares lost over 70% in 2021, the first full year of trading for the company since its IPO in 2020.
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