Translation software company Straker Translations (ASX:STG) has acquired US company Lingotek, opening the door to 20 additional enterprise customers and partners including Oracle, Nike and Acquia.
Straker acquired Lingotek, a cloud-based translation services provider, for US$6.47m and anticipates the significant material impact of the new business will lead Straker to be EBITDA break-even in FY22.
A plan for growth
In the last six months Straker has seen its share price increase by 50 per cent following an expanded deal with IBM. This acquisition will continue that trajectory, extending Straker’s presence in the US and opening the door to a number of new partners.
Straker founder and chief executive, Grant Straker, said the acquisition is a keystone in Straker’s ongoing plans for expansion.
“A key element of our strategy is to accelerate growth through the acquisition of companies that have relationships with global enterprises and/or key technology complementary to our RAY Ai powered translation platform,” said Straker.
“This approach was most recently validated by the transformative agreement we struck with IBM in November, when the Fortune 500 company agreed to make Straker its strategic translation provider. That agreement emerged out of a relationship between IBM and Spain’s MSS, which we acquired in 2018.
“Lingotek offers similar potential. It represents a fantastic opportunity to acquire enterprise customers, SaaS revenue, a US-based team of enterprise salespeople and an in-market tech team,” he said.
Lingotek’s management team, including its founder/CEO, will continue with the Lingotek business after the acquisition and manage operations from the company’s US-based head office.
Ongoing strong results
Straker celebrated a record half-year result at the end of 2020 with top line revenues rising nine per cent to $14.6m for the six months ended September 30 and annualised recurring revenues rising by 32 per cent to $28.1m.
“The combination of Straker and Lingotek represents a significant step forward for our business. In line with our strategy to drive growth through acquisitions, we are continuing discussions with several other companies in Europe, the USA and the Asia Pacific region,” Straker said.
“We look forward to reporting our progress in the coming year.”