Lionbridge to Acquire Bowne Global Solutions

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Global Watchtower

Common Sense Advisory Blogs

Posted by Donald A. DePalma on June 28, 2005 in the following blogs: Translation and Localization, Web Globalization, Business Globalization, Technology, Interpreting, Market Data, Global Marketing, Best Practices, Supplier Business Issues
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The busy week in acquisitions in the translation and localization industry brought smiles to investors. Even though Lionbridge's (LIOX) stock is a long way from its $9.02 52-week high, it soared 43.38% to $6.78 on its acquisition of Bowne Global Solutions (BGS). 8,354,473 shares changed hands during the day. BGS parent Bowne & Co.'s (BNE) stock also profited from the divestiture of a business unit that was not aligned with its core financial printing. Its stock reached $15.14 (7.83% more than the previous day). Across the pond, SDL got splashed by the deal, seeing an uptick of 7 pence (5.79%) at the end of the London Stock Exchange session. This rise clobbered the same-day increase when SDL announced its acquisition of Trados.

This is the good news that the language industry has been looking for -- major players are coming together to create real differentiation in the marketplace. This month's M&A activity reinforces two distinct approaches to meeting client needs: SDL leads with technology, while Lionbridge promotes a managed-services model akin to payroll processing. With managed services, you outsource the work to providers and should never care what software they are using for generating paychecks and calculating taxes. Ditto for translation memory -- done right, companies shouldn't worry about how, who, or what manages their TM, just that it is managed and available for leverage elsewhere in the company.

Each model meets the need of a certain type of client, and still leaves room for smaller language service providers to cater to late adopters not comfortable with the managed services model or heavy-duty in-house technology, buyers that like working with owner-operators, firms with single language and in-country needs, and those with other specialty needs. In a nutshell, everybody wins, and share prices rise. Not bad for a Tuesday in late June.

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