RWS and SDL com­bine to cre­ate £2.7bn lan­guage ser­vices gi­ant

The Daily Telegraph - Business - - Business - By Michael Cog­ley

A TIE-UP worth £2.7bn on London’s ju­nior mar­ket will cre­ate one of the world’s largest trans­la­tion com­pa­nies, the lat­est in a string of soft­ware deals in the City.

Buck­ing­hamshire com­pany RWS, an Aim-listed spe­cial­ist in trans­la­tion soft­ware, has snapped up SDL in an all­share deal, valu­ing its ri­val at £726m last night. The deal val­ues the merged group at £2.7bn and is ex­pected to place it among the top five Aim-listed tech com­pa­nies. SDL shares jumped by more than 30pc on the news to 782p, while RWS fell 12pc to 650p. RWS, based in Ger­rards Cross, pro­vides spe­cial­ist tech­ni­cal trans­la­tion for com­pa­nies fil­ing patents, count­ing many of the world’s top 10 phar­ma­ceu­ti­cal firms among its clients.

The lin­guis­tics com­pany, which is val­ued at just un­der £2bn, also works with tech­nol­ogy com­pa­nies to trans­late their con­tent for lo­cal mar­kets.

The com­pany hopes to use SDL’s ma­chine learn­ing and AI tech­nol­ogy to im­prove its trans­la­tion of­fer­ing and open it­self up to new clients.

Once closed, the deal will be the largest takeover of a UK-listed tech­nol­ogy busi­ness since the start of the pan­demic.

It comes amid a se­ries of deals for tech com­pa­nies on the London Stock Ex­change, in­clud­ing the takeover by in­dus­trial soft­ware com­pany Aveva of US firm OSI­soft last week. The en­larged group will have com­bined rev­enues of around £732m and an ad­justed profit be­fore tax of £109m. The RWS board has tipped a dou­ble digit in­crease in earn­ings within the first fi­nan­cial year.

The com­pany has iden­ti­fied £15m worth of cost-sav­ings, which are likely to in­clude job losses and other spend­ing re­duc­tions. Much of the sav­ings will come from com­bined “corporate and sup­port func­tions” as well as com­bined “sales and mar­ket­ing” ac­tiv­i­ties.

RWS’s main share­holder and chair­man An­drew Brode and chief ex­ec­u­tive Richard Thomp­son will run the com­bined com­pany.

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