Lionbridge Stands to Benefit from BGS UK & IE Operations

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Global Watchtower

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Posted by Donald A. DePalma on June 16, 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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Less than 2 weeks before Lionbridge's acquisition of BGS, the latter announced the opening of an office in northern England to complement its U.K. headquarters in Luton, offices in Coventry, Bristol, Fareham, and London, and its European headquarters located in Dublin, Ireland.

What's the fate of BGS's U.K. organization following the acquisition? BGS staff in Old Blighty can probably breathe easy. It turns out that Lionbridge was not that well represented in England -- just its U.K. sales office in Reading. That contrasts with BGS's weightier presence -- 7 offices and 230 people in the U.K. led by Paul Doherty (ex-Xerox Global Services). So merging Lionbridge and BGS in England won't be as traumatic as merging, say, the equal-sized Slough and Swindon branches of Wernham Hogg in The Office.

The English market is arguably the most competitive and the most profitable translation market in the world, partly due to the strength of the sterling. England also happens to be the first step for U.S. companies entering Europe, so Lionbridge could benefit from this well-established BGS beachhead.

However, further west in Ireland, the two companies have significant overlap. Lionbridge has its VeriTest European Test Centre in Ballina, Ireland; its Irish business office in Dublin; and its Operations Center in Galway. Both firms have a big presence in and about Dublin, so those offices should expect some cutting. That won't be unexpected news for Lionbridge staff, who have been watching the company cut back on Irish staff in favor of workers in India following its 2003 acquisition of Mentorix.

It's not all about cutting staff, though. Lionbridge's VeriTest Ballina office could benefit from BGS's localization and linguistic quality testing group in D?n Laoghaire on the Irish Riviera. Working with the Solutions Architect for European Testing, Stephen Sharkey, that stealthily marketed group has been building a strong automated and manual test competency business for the past few years, with testing labs in Poland, Slovakia, China, Japan, and Taiwan. Its localization testing expertise would complement VeriTest's certification competency, with VeriTest returning the favor by offering BGS customers a solution for needs like Java and other product certification.

How do clients benefit? Existing Lionbridge customers will see some new faces and expanded service offerings in the portfolio. BGS clients will notice a new logo on the business card and a focus on Lionbridge's managed services, offshore production, and testing services.

Longer term, it will be interesting to see how BGS, a company that frequently stayed below the radar in its marketing efforts, influences Lionbridge. BGS comes into Lionbridge with a lot of talent and resources that are well known to its brand-name clients, but not widely seen by the general public. This infusion of assets presents Lionbridge with an opportunity to change the usual M&A 1 + 1 = 1.75 math to a sum more appealing to its shareholders and a portfolio of services that meets more client needs than either company could offer alone.

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