M&A Heats Up Spain’s Language Service Providers

Spain Language Services Attract Investment

M&A Heats Up Spain’s Language Services Providers

The high demand for translation and interpretation services in today’s globalised market has got many language service providers talking M&A in Spain.

The language services industry is highly fragmented and no stranger to consolidation, particularly amongst mid-sized firms. In the past few years, several language service providers (LSPs) in Spain have teamed up to beat the economic downturn, taking advantage of cost savings and technology synergies.

Now, cross-border M&A is heating up as Asian and US companies are betting on European LSPs to manage global customer demand.

SPAIN’S INTERNATIONALISATION

To compete in today’s global business arena, successful companies need to be able to communicate in more languages than ever before. Whether its document translation, business translation or conference interpreting, there is a need to quickly and accurately process business materials for an increasingly diverse audience.

Since Spain joined the European Union nearly 30 years ago, its presence in international institutions has grown. And many companies have expanded abroad, first to Latin America, then to the US, Asia and Eastern Europe. This internationalisation has driven the rise in language academies in Spain, teaching a wide range of languages from English to Mandarin.

There has also been an upsurge in LSPs, like Basque firm Mondragon Lingua, one of the biggest in the country. Over the last few years, Mondragon Lingua has built up its business via a series of acquisitions in the home market, including Madrid-based LSP Comunicacion Multilingue. Overseas expansion is now its priority.

Also leading the pack is Spanish company SeproTec Multilingual Solutions, which began as a small translation company in the 1990s and now ranks among the top 40 LSPs in the world thanks to rapid organic growth. It recently won a contract worth nearly 10 million euros to handle the translation and interpretation services for Spain’s national police force.

CROSS-BORDER LSP INVESTMENT

Last year, Chinese technology services provider HiSoft Technology International bought Barcelona-based Logoscript, one of the top LSPs in Europe. This deal was HiSoft’s first foray into the European market, which it sees as a big opportunity for growth.

With the ongoing financial crisis in Europe and the deep pockets of some Chinese firms, HiSoft’s deal may be the first of many east-west tie-ups.

US firm Intel has also been busy in Spain, picking up natural language processing startup Indisys last month, whose clients include Spanish retail icon El Corte Ingles.

So the outlook for Spain’s language services industry looks rosy as solid growth prospects will continue to attract investment and M&A interest.

For more information on Spain’s language services sector, contact corporate law firm Argali Abogados.

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