Toppan Digital Language is among the most recent companies to expand with the acquisition of TranslateMedia, announced this Tuesday. For Christophe Djaouani, Toppan president, the company was an early standout as a great complement to their existing business. But no matter how good a fit, it’s no easy task to bring an acquisition to the finish line. Djaouani took some time this week to reflect on the journey with MultiLingual.
Tell me a little about the planning for this acquisition. When did talks first start? What kind of a process did you go through, and what were some of the interests/concerns along the way that had to be addressed?
Members of our team have known TranslateMedia for several years, and when we founded Toppan Digital Language, they were one of the first companies we got in touch with. Although the timing wasn’t right for them to consider a sale last year, we kept in contact and decided to move forward with a transaction at the start of this year. I think for TranslateMedia, we were one of the few buyers in the market who could really preserve and invest in everything they have built to date, as there is next to no duplication across our businesses. There was strong alignment on the desired outcome from the start, so the transaction has been very friendly, open, and as smooth sailing as a transaction can be.
How do each business’ services and capabilities complement each other? What does it allow each company to do that it couldn’t do before?
Our businesses are highly complementary. Our core values are very closely aligned, around customer-centricity, sector specialization, and a solutions approach, so that is critical. Then in terms of the building blocks of each business, we are extremely synergistic. We strengthen each other in terms of our sector specialism, customer bases, operational footprint, management capabilities, and sales and marketing; and TranslateMedia brings its proprietary translation management platform, which is a very impressive end-to-end solution. We will continue to invest in that platform, and it will give us more options to build solutions for specific customers and industries.
With the acquisition complete, how does this set Toppan up to meet the challenges and demand in the current market? How about what you anticipate to come in the future?
We are incredibly lucky at Toppan Digital Language to be backed by Toppan Inc., a multi-billion dollar international corporation. So our strategy involves not only M&A — and this is our second deal in the last few months — but also significant organic investment in sales and operations. We have a very strong core operating platform now, across the US, UK, Europe, and Asia, and we are able to scale very efficiently and with agility. The business and operating model that we are building is very customer-centric, and we know that every company says they focus on customers, but we really are architecting the business from scratch around how to meet specific customer needs, which we obsessively tie to sector specific requirements. The addition of the TranslateMedia STREAM technology platform provides us with even greater agility to design tech solutions to meet these needs.
How are the companies fitting in together in terms of culture and responsibilities? Did everything settle naturally into place, or will that take time?
From the perspective of management responsibilities, these are clear from day one, and our teams are very complementary in terms of skill sets. The integration will be phased carefully with a focus on stability and growth. It always takes a little time for cultures to coalesce, but we have very clear cultural values and we will be deliberate about building new, shared and positive experiences for all in our team together.
With this being the latest in so many M&A stories we’ve seen lately, what do you think about these business moves in general? What does it mean for the industry and its future?
High levels of M&A are a feature of every industry due to the low cost of capital and the pressure for growth. Our industry is extremely fragmented, so there is even less surprise that it is commonplace. However, we take the view that if you are performing M&A for financial engineering or short-term business plans, it’s the customers who end up being disrupted and neglected. We can see that the gap between what the customers need and what vendors are offering has really started to widen, while so many companies are distracted by different objectives, changing strategies and cost-cutting drives. It’s really questionable whether the focus on M&A is delivering the innovation that the industry needs. M&A certainly is part of our strategy, but there is a fundamental qualitative difference between acquiring to invest and grow, and acquiring to synergize and sell on. We think that far too much of the latter is happening.
Anything else you want to comment on?
We would just like to extend a warm welcome to our new customers, colleagues, and vendors. We are very excited about what lies ahead.