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Common Sense Advisory Blogs
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Mainstream Media Ignore SDL Acquisition of Idiom
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SDL signed the papers to buy Idiom on 8 February and announced the deal at the opening of business in the United Kingdom on 11 February. Two weeks later, the mainstream business press has yet to cover the event. During our webinar about the acquisition on 13 February, we noted that the newspapers of record -- the New York Times, the Wall Street Journal, the Financial Times, the Boston papers that usually carry news about Idiom (the Globe, Herald, and Business Journal), and the Maidenhead outlets (the Slough & Maidenhead Observer and the Slough & Windsor Express) -- hadn't written about the event that had agitated 140 people enough to call into our session and ask questions. We looked a bit further afield and found that the other big U.K. papers had skipped coverage as well. Finally, the weekly Mass High Tech printed a short story about the acquisition and Thomson Financial issued an alert.
What's up with the lack of coverage? While many have dismissed the purchase amount (U$21.7M) as "chump change" compared to venture capital investments of 3 times that amount, it still was a substantive event both for the Massachusetts software industry (one more independent company bites the dust) and for SDL which became the dominant player in the translation automation market.
Maybe that's the point. Common Sense Advisory figures that the market for translation and other language services will exceed US$10 billion this year, but sales of language-related technology barely squeaked past US$100 million last year. As we have pointed out before, the revenue stream from translation services is what keeps the R&D going for this kind of technology. Captive systems from Elanex, Lionbridge, SDL, thebigword, Translations.com, and Transware make up nearly all the actual revenue for translation technology. SDL's acquisition of Idiom merely confirms what people already knew about the space. Or maybe the press was too busy covering BHP Billiton's US$147.4 billion takeover bid for Rio Tinto or Microsoft's US$44.6 billion offer for Yahoo! -- both of those will generate more money for the lawyers doing the deals than SDL paid for all of Idiom.
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Keywords: Exit strategies, Mergers and acquisitions |
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