RWS buys SDL to become new language services industry leader

When two giants merge, an even bigger one is born — and the language services industry is currently witnessing the birth of its biggest giant ever.

On August 27, 2020, the boards of RWS and SDL announced a deal that will see RWS buying SDL. In the UK’s largest tech deal of the year, RWS has agreed to pay GBP 809 million ($1.066 billion) to buy SDL. While there are still a few more regulatory steps that need to be taken, including official shareholder votes, the details of the deal have already been released.

As it stands, RWS shareholders will own about two-thirds of the combined business, while SDL shareholders will own the remaining third. Over time, the SDL brand is set to disappear and the whole company will be placed under the RWS brand.

What does this mean for the language services industry? MultiLingual spoke with industry experts at Nimdzi Insights to find out.

“The acquisition that RWS and SDL just announced first of all means a shift in leadership for the industry,” says Sarah Hickey, chief researcher at Nimdzi Insights. “While RWS and SDL already ranked among the top five companies by revenue in the language industry, until now nobody has posed a significant threat to the leading position of TransPerfect, who’ve held the number one spot on Nimdzi’s ranking of industry leaders for the past three years in a row.”

Hickey adds that, “If we look at their revenues as listed in the Nimdzi 100 ranking in March 2020, RWS and SDL now outperform TransPerfect by almost $170 million and we can expect them to break the USD one billion mark this year. Their combined annual revenue for FY2019 was $934.1 million.”

“The acquisition also means that for the first time in the history of the language services industry, a company from the United Kingdom will be leading the market. Until now, the top three spots in Nimdzi’s ranking were held by companies headquartered in the United States.” Especially given how soon this has come after Brexit and the fact that it’s happening during the ongoing COVID-19 pandemic, Hickey believes this could indicate that the UK market is still going strong.

According to Renato Beninatto, language industry veteran and CEO of Nimdzi Insights, “The merger will likely accelerate other deals in the industry. Companies to watch are Lionbridge, Welocalize, Semantix, LanguageWire, and Keywords. As with major mergers that have happened in the past, mergers at the top create new opportunities for players downstream.”

As if to prove his point, the latest acquisition announcement rolled in just a few hours later — coming once again from Europe. Dublin-headquartered game localization leader Keywords Studios (KWS.L) has just announced the acquisition of London-based creative marketing agency Maverick Media. The deal is worth up to GBP 3.6 million ($4.7 million) and is one of a number of acquisitions Keywords Studios has completed in recent months. 

“Keywords Studios is listed on the London stock exchange. Considering their recent M&A activity in combination with the latest RWS and SDL deal, it shows that there’s a lot happening on the UK market right now,” concludes Hickey.

MultiLingual Staff
MultiLingual creates go-to news and resources for language industry professionals.

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