BrazilEY-Parthenon advises on LanguageWire's acquisition of Xplanation
LanguageWire, a Denmark-based multilingual content provider, has acquired Xplanation, a Belgium-based rival in a move that doubles the Danish company's size and turns it into a regional player.
Founded in 2000, LanguageWire has in the past two decades grown into one of Europe’s larger language services provider. The company, headquartered in Copenhagen with further offices in Stockholm, Olso, London and Hamburg, employs just under 200 professionals, serving clients across Europe and beyond. The firm’s network of language experts (translators, proofreaders, copywriters, DTP engineers and voiceover artists) consists of over 5,000 professionals.
The acquisition of Xplanation – a company which operates in the same industry – sees LanguageWire double its team to around 350 people, working across 19 offices in 13 countries. “It's a huge dream come true,” said Henrik Lottrup, CEO and co-founder of the Danish company. “We can now create one of the big players in this industry with a global footprint.” Lottrup founded the company in 2000 together with two friends while studying at the Copenhagen Business School as part of their joint aspiration to become entrepreneurs. They were inspired by the fact that while going through content in different languages, they found out that it was not easy to get a translation.
Despite being profitable since inception, in May 2017 the co-founders took a major step to accelerate the firm’s growth when they brought private equity firm Catacap on board. “We believe that we have a winning growth concept and we look forward to this new, ambitious chapter in the company’s history along with CataCap”, said Lottrup at the time. The purchase of Xplanation is the first major strategic endeavour that the two partners take together.
Commenting on the deal, Rasmus Lokvig, a Partner at Catacap and Vice President at Languagewire, said that the two firms are especially complementary for one another. “Languagewire is highly technology-focused while Xplanation is very customer service minded, blending the two competencies will add great value to our business model.” He further highlighted that with the bolt-on Languagewire now also has offices in the US and Asia.
Together, the two former competitors and now partners have set the bold ambition to “become the world's leading multilingual content provider.” Among the larger competitors they will have to fend off include TransPerfect, Seprotec, Lionbridge and LanguageLine Solutions.
The global market for language service providers is estimated to be worth over $40 million annually, and forecasts indicate growth of more than 10% going forward, driven by internationalising companies producing ever more content against a backdrop of growing online usage and more and more platforms entering the stage. “The sector is however very fragmented,” said Lottrup, “so consolidation is an opportunity.”
Frederik Aakard, an advisor at M&A consultancy Oaklins in Denmark, pointed out that the deal marks a big step for Languagewire. “It is the firm’s first major transaction, and buying a target that is of a similar size is always a little exciting.”
The orchestrators
The deal was orchestrated by several external consulting firms and law firms. Among them was EY-Parthenon, the strategy consulting arm of accounting and consulting giant EY. EY-Parthenon was formed in 2014 when EY bought the Parthenon Group, a 23-year-old consulting firm founded by former Bain & Company executives. In Europe’s, EY-Parthenon (formerly Parthenon-EY) has grown strongly organically, as well as inorganically, following acquisitions of several offices of OC&C Strategy Consultants (Netherlands, Germany and France).
Meanwhile, in Denmark, EY-Parthenon acquired BOX Associates in November 2017 – the boutique consultancy which advised LanguageWire during the CataCap capital injection. At the time, BOX Associates worked shoulder to shoulder with PwC and local law firm Mazanti-Andersen Korsøe Jensen, while CataCap was advised by Arthur D. Little, Deloitte and Gorrissen Federspiel, respectively.
Reflecting on its deal support services, which comprised commercial due diligence and strategic expertise, EY-Parthenon stated on its LinkedIn account: “Our congratulations to LanguageWire and we are proud to have advised on the acquisition.”
Earlier this year, EY-Parthenon advised on a deal in France’s private equity sector, at a time when then industry has reached a 10-year peak.
