With M&A remaining a central discussion point throughout the global LSP community, Adaptive had the chance to catch up with one of the key players involved in the consolidation movement. Straker Translations – a global LSP headquartered in New Zealand with staff distributed across NZ, Australia, Europe and the US – has made several strategic acquisitions of other language service agencies and continues to be on the lookout for further opportunity.
Edmund Blogg spoke with CEO and founder Grant Straker to get an inside look at Straker’s M&A gameplan.
Edmund: Straker Translations started out as a technology company. How did you make the jump to services?
Grant: At the time we made this decision (2011), the tech component of the industry was around $1b and the services component was $25b. By becoming an LSP and offering translation services based on our technology we were able to better commercialise our technology innovation. I think a lot of tech companies trying to play in this space think they can build something useful and then just clip the ticket with a cloud-based app.
The reality is that you need to offer the service to be successful, and this much harder to do.
What was Straker’s first acquisition, and was it strategic (planned) or opportunistic?
Grant: Our first acquisition was Dublin-based Eurotext Translations. It was planned in that it was in a country where we already had a legal entity and people on the ground. This made it easier for our M&A and integration team to work through things for the first time. Going forward we are now very well placed to make acquisitions in other markets where we don’t have a presence.
What have been some of the key differences in Straker’s recent acquisition processes compared with this first one?
Grant: Geography is the main difference. Our most recent deal was in the USA, which was a new experience after closing deals in Europe. We are still looking at both markets. We have matured our M&A team and systems so it’s very easy for us to do deals quickly, which sellers really appreciate.
Why does Straker feel that the timing is right to be pursuing an acquisition growth strategy in the current language services market?
Grant: The reality is that the market is coming under technology disruption and margin pressure, and many LSP’s are feeling this. For some founders it’s the right time to cash out before the value of their enterprise may drop – one bad year can have a really adverse effect on valuation, and with intensified pressure in the market it’s harder for some LSPs to predict sustained financial performance with confidence.
We have a very powerful platform that consolidates a lot of translation functions and is better for the customers and long-term employment options for staff.
On what core criteria does Straker judge an acquisition target to be a good potential fit?
Grant: Ultimately we are looking for a good, solid customer base with repeatable revenue streams and a controlled cost base.
How does a seller’s existing customer base benefit from integration into the wider Straker organization?
Grant: Customers get access to our complete suite of translation technology and global services. They get 24/7 global customer service where they can talk to experts and project mangers, as well as support via our DeltaRAY customer portal where they place and track orders. They also gain access to our API, Automation and advanced translation technology platform.
Ultimately customers get a faster, more cost-effective service and access to a whole range of world-leading translation technology.
What are some of the toughest challenges when integrating recently-acquired companies, and how does the Straker team work to overcome these?
Grant: HR is critical. We have a global HR platform and team and we make sure team members are integrated into our culture and systems. Keeping our business operating as a global team and incorporating new team members is a high priority.
Financial integration is, of course, also something to be very careful with and can take some time.
Are there any strategic geographies or markets that Straker is looking to move into or expand within during 2017?
Grant: We are looking at the world as a whole – so far we have acquired companies with offices in Europe, the USA, Japan and Australia. We are looking at Europe, USA and Asia and will seriously consider LSP’s in any of these markets if they meet our basic criteria.
We have an open door to discuss M&A possibilities with all owners considering their options, and an efficient discussion process to evaluate potential fit quickly.
Edmund Blogg is a Director at Adaptive Globalization, focused on connecting companies within the global language services and technology space for investment, collaboration and M&A opportunities. Feel free to connect with him on LinkedIn for a networking opportunity.
Tel: (760) 268-9621
Email: edmund.blogg (@) adaptivebusinessgroup.com
Recent Adaptive Globalization Articles
- LocWorld 2017: Barcelona
- 4 Company Culture Values of Successful Language Services Companies
- Building Culture in Language Services Companies: An interview with Mark Brayan, CEO of Appen
- 7 Exceptional Women Influencers in the Language Services Industry
- Build or buy? An inside look at M&A in the Language Services Industry
- Hiring for Tech Change: Finding the Perfect Candidate
- Love the languages industry? Natural networker? We’re hiring!
- LSP Growth – An Up-Close Look with a Chief of Sales & Marketing Officer
- Translator Career Paths – Freelance or In-house?
- Moving into Management: The Journey from Sales Rep to Sales Leader