On August 16, 2021, Toppan Digital Language announced that it had acquired fellow London-based language service provider (LSP), GlobaLexicon.
A little over a month has passed since the announcement of the launch of Toppan Leefung’s wholly-owned LSP subsidiary, and the appointment of Christophe Djaouani as its President. Singapore-based printing company Toppan Leefung is part of global printing giant, Toppan Inc., which trades in Tokyo (TYO: 7911).
Djaouani told Slator that the GlobaLexicon deal closed on August 6, 2021. While he declined to discuss purchase price, he described GlobaLexicon as “profitable,” having “a very successful 2020 with revenue growth of 45% from the year before,” and continuing to grow strongly into 2021. He attributed this to the LSP’s “very efficient and scalable operating model.”
The LSP was owned by founders Daniela Toledo and Kristian Smith; the former having put up the business in 2004 after seeing a gap in language solutions for the market research sector, where Toledo had previously worked.
Both founders will stay on post-sale, Djaouani said, “to provide continuity for customers and employees.” He placed GlobaLexicon’s staff count at approximately 130 and “growing quickly with its operations in the United Kingdom, Europe, and North America.” He added that the LSP recently doubled its Spain operations to meet demand from new clients.
Slator 2021 Language Industry Market Report
GlobaLexicon specializes in market research localization, with a particular focus on healthcare and life sciences, and Djaouani said it also operates across other sectors, such as financial and legal.
According to Djaouani, “Market research is highly aligned to our focus on business-critical content because translation is critical to the consistent quality of data gathered by our customers, which they rely on to make key decisions.”
Toppan Digital Languages plans to expand its coverage of the research and analytics market, Djaouani said, noting how “the process in market research is very similar to the data annotation process.”
He added, “We have a very clear and long-term strategy: become the leading language solutions provider for regulated and business-critical content, and we will get there through a combination of high-quality acquisitions and organic investment.”
Candid Take on M&A Market
Djaouani said the GlobaLexicon brand will be folded into that of Toppan Digital Language. According to Djaouani, “GlobaLexicon runs on XTRF, which we have been impressed with for its end-to-end capabilities. It also uses a mix of third-party productivity software and machine translation.”
Slator 2020 Language Industry M&A and Funding Report
Another thing that impressed: GlobaLexicon’s “highly competitive and diverse talent pool” and its “nimble, ambitious, collaborative, and entrepreneurial culture [that] excited us tremendously.”
Having completed Toppan Digital Language’s first acquisition, how does its President see the industry’s current M&A environment?
“Clearly, it is a very active M&A market and across all sizes of business. My main observation for a while has been that M&A in the sector has been too dominated by short- to medium-term financial engineering. I don’t think there has been enough attention paid to the customer offering and experience, nor to addressing the fundamental transformation of the industry,” Djaouani said.
He added, “The language technology M&A market is running quite hot. It will be an interesting area to observe because there are many companies trying to do innovative things, but scale-up is proving a challenge, so there are big questions over return on investment and valuations.”
Toppan was advised on the deal by Howard Kennedy (legal) and MacIntyre Hudson (tax), GlobaLexicon by Collyer Bristow (legal), with the rest of due diligence performed internally by Toppan.
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