Straker Translations continues its European expansion with a new acquisition
Straker Continues Its European Expansion With The Acquisition Of Spanish Translation Company On-Global Language Marketing S.L.
Key highlights:
- Extends Straker’s presence in the multi-billion dollar European translation market, with the Spanish translation market estimated at NZ$500 million
- Adds new strategic customers onto Straker’s high-margin RAY technology platform
- Supports further consolidation of Straker’s existing Spanish operations and builds further scale in a market with 150 language providers
- Adds new revenue - for the 12 months to 31 March 2019, On-Global’s revenues were NZ$3.0 million • Immediately EBITDA accretive
Auckland, New Zealand – Straker Translations Limited (ASX: STG), a leading global technology driven translation services platform, is pleased to announce it has acquired Spanish translation company OnGlobal Language Marketing S.L. in a combined cash and share deal.
Overview of On-Global
On-Global, headquartered in Vitoria-Gasteiz in the Basque Country and with an office in Barcelona, is a specialised language services company operating in two regions that are among the most industrial and hi-tech areas in Europe.
With 14 employees, On-Global provides translation and technical writing services, transcriptions, website and software localisation, interpreting services, consultancy and document management.
An attractive acquisition that accelerates Straker’s growth
Commenting on the acquisition, CEO Grant Straker said: “Straker has established itself as a leading global technology driven translation services platform. The business has a clear five-point growth strategy, and an important part of that strategy is to seek out targeted acquisitions that strategically complement and accelerate our growth.
“We are focusing our acquisition strategy in markets where we already operate and have an easier pathway for integration of acquired production systems onto our RAY platform for margin gains and, where possible, consolidation benefits. On-Global is an excellent fit in terms of customers, location and people in a market we understand well and where we are established and growing strongly.”
On-Global is a strategically compelling acquisition
- Extends Straker’s presence in the Spanish market, a market Straker knows well
- Adds new strategic customers onto Straker’s high margin RAY technology platform
- Supports further operational synergies across Straker’s European operations
- Provides upselling opportunities across On-Global’s existing enterprise customer base who have demonstrated a need for Straker’s rapid and accurate document translations
- Adds new revenue – for the 12 months to 31 March 2019, On-Global’s revenues were NZ$3.0 million
- Immediately EBITDA accretive.
Acquisition details
Consideration for the acquisition is NZ$2.25 million paid up-front comprising:
- NZ$1.73 million in cash
- NZ$520k in Straker shares (318,830 shares issued at A$1.54, the closing market price applicable on the day the transaction completed). These shares will be escrowed for 12 months
- An earn-out payment of up to NZ$850k over two years contingent on hitting specific revenue forecasts. A further NZ$170k allocated as a bonus should On-Global significantly out-perform revenue forecasts
- On-Global has two Co-Founders – Gonzalo Urriza and Amaya Montoya. Amaya has managed sales and will continue with the business in a sales management capacity. Gonzalo has managed production and his role will be dis-established as On-Global’s production systems will be migrated onto Straker’s RAY platform. Gonzalo will remain with Straker for 3 months to assist with the transition to the RAY platform
- The transaction completed on 14 June 2019 in Spain (evening 14 June 2019 Australian time). All material conditions have been satisfied
- The acquisition has been funded from the Company’s cash reserves. No capital raising was required to complete the transaction
- No shareholder approvals are required in relation to the transaction
- No changes to the Board or the Company’s senior management team will occur as a consequence of the transaction
- There is no other material information relevant to assessing the impact of the transaction on the price or value of Straker’s securities.
Straker remains in discussions with a number of other potential acquisitions in Europe, the USA and the Asia Pacific region.