On May 5, 2021, German Translation Network (GEtraNet), announced the acquisition of local language service provider (LSP) Lingua-World. The terms of the deal, which closed on April 30, 2021, remained undisclosed.
As its name suggests, GEtraNet is a network of Germany-based LSPs. GEtraNet’s Chief Innovation Officer, Tom Jordi Ruesch, told Slator that they have acquired “a good dozen companies in the LSP sector as a consolidator” in recent years.
Ruesch described GEtraNet as “part of the GTN Group, a 100% family-owned business, which operates in two business areas: Language Services and Digital Information.” GEtraNet is the collective name of the LSP arm housing six brands.
According to Ruesch, Lingua-World’s Owner and CEO wanted to sell the company in order to retire. He said she retains part of the business, Lingua-World South Africa, “for personal reasons. However, this company is insignificant for the overall group.”
GEtraNet and Lingua-World were introduced by Rainer Wieser, co-Founder of Proventis Partners, which also advised the company in a number of previous acquisitions, according to Ruesch.
“We did not have to think twice,” Ruesch said. “Both companies are among the few large family-run companies in the market — which, incidentally, was also the decisive reason for the seller to choose GEtraNet […] despite various other interested parties.”
Ruesch declined to share profitability metrics or revenues for either company in 2020, but said GEtraNet expects to generate consolidated revenues in the region of USD 15–16m in 2021, “depending on Covid and its implications for interpreting.”
While 85–95% of GEtraNet’s revenues are derived from translation and localization, Lingua-World’s focus on interpreting was one of the reasons it was an attractive target. Ruesch said their respective client bases were “entirely different” from one another, with Lingua-World focusing on public authorities and private clients while GEtraNet’s main customer base comprises corporate clients.
“With the acquisition of Lingua-World, we now have reached a size both in terms of revenue and headcount to have an impact on the German market.” — Tom Jordi Ruesch, CIO, GEtraNet
GEtraNet’s individual brands have a variety of specialisms, which span life sciences, technical documentation (tech doc), finance, legal, and technology. They also cover marketing content and have a dedicated team for desktop publishing, Ruesch said.
GEtraNet has a headcount of 67 people post-acquisition, and will continue to be headed by Lothar Teufel (COO) and Ruesch (CIO).
15 Years of Buy and Build
The GEtraNet CIO also outlined their 15-year acquisition history in more detail: “Like a number of LSPs in the German market, the GTN Group followed a strong build-and-buy strategy. Our focus traditionally lay on smaller entities with strong customer loyalty and specialized services.”
Ruesch added that the typical pattern was for GEtraNet to “acquire smaller businesses in company succession situations” and that “smaller businesses were consolidated into existing structures, while major brands were maintained.”
He identified the main rationale for the Lingua-World acquisition as “growth and diversification,” saying that, “with the acquisition of Lingua-World, we now have reached a size both in terms of revenue and headcount to have an impact on the German market.”
Lingua-World’s customer mix and presence in the interpreting sector and among public sector authorities were of particular interest to GEtraNet. Ruesch said the acquisition marks “the start of a new chapter for GEtraNet,” in which they plan to focus on the build part of their M&A strategy.
The supplier landscape of language services in Germany is among the most fragmented in the world. Aside from GEtraNet — and its decade-and-and-half history of M&A — recent years have seen private equity-backed German LSPs t’works and Transline complete multiple acquisitions in relatively quick succession.
Sharing his take on the language services market in Germany, Ruesch said that it is “obviously consolidating” and at a faster pace as the German and global economies become more digitized, changing the way they connect to customers.
Moveover, he said, “it is an exciting time to be working in the language industry with massive potential for innovation and progress — and potentially massive rewards. At GEtraNet, we want to actively participate in that development of the field.”
Image: GEtraNet COO, Lothar Teufel (L), and GEtraNet CIO, Tom Jordi Ruesch (R).