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Call-Center Operator @Teleperformance to Buy @LanguageLine for $1.5B From Abry Partners

Call-Center Operator @Teleperformance to Buy @LanguageLine for $1.5B From Abry Partners

judicial sale of rival TransPerfect Global Inc., one of the world’s leading providers of translation, website localization, and litigation support services. New York-based TransPerfect reportedly generated over $500 million in revenues and $80 million in EBITDA in 2015, and is said to have a market value in excess of $1 billion. The court case chronicles the tumultuous relationship of the company’s two co-founders, Liz Elting and Phil Shawe, who started TransPerfect in a college dorm room over twenty years ago, and are now embroiled in a bitter battle involving “irreconcilable deadlocks” and an “irretrievably dysfunctional governance style.” “LanguageLine Solutions delivers mission critical services to a large array of clients in verticals that we already service in customer service and technical support. It is a superb organization that supports 25,000 clients across the US, Canada and the UK in more than 240 languages with a sophisticated growing network of approximately 8,000 interpreters,” said Teleperformance executive chairman Daniel Julien, and CEO Paulo César Vasques in a statement. “This acquisition will reinforce and boost Teleperformance’s global leadership as a provider of high end value-added services, and will positively impact Teleperformance’s profitability profile. We intend, together with LanguageLine Solutions’ seasoned leadership team, to gradually expand these lines of service across Teleperformance’s geographic footprint,” they added. “When completed, the deal will create immediate value for Teleperformance shareholders as it is expected to be accretive to earnings per share by around 10% on a pro forma basis for 2016.” “LanguageLine has been a long-held and important investment for ABRY. Management has grown revenue, diversified the product lines and increased profitability meaningfully over the course of our investment, and we are thrilled that the Company has found a perfect home within Teleperformance,” said Peggy Koenig, managing partner and co-CEO at ABRY Partners, which acquired LanguageLine for $720 million in 2004. Abry Partners, founded in 1989, has over $4.3 billion of assets under management, and focuses on private equity or debt investments in media, communications, business and information services in North America. “We know that Teleperformance, with its global culture and footprint, is the perfect partner to help us write a great new chapter in the history of the language access solutions industry,” said Scott W. Klein, LanguageLine Solutions CEO. LanguageLine is a global leader in innovative language access solutions for more than 34 years. Its latest innovation, Olympus, is an award-winning cloud-based language access platform that is redefining on-demand language delivery. It provides the highest quality phone, InSight video remote, and onsite interpreting, translation and localization, as well as bilingual staff and interpreter testing and training. Trusted by more than 25,000 clients to enable communication in any situation with the growing limited English proficient and the Deaf and Hard-of-Hearing populations, LanguageLine says it delivers “the industry’s fastest and most dependable access to highly trained and professional linguists in more than 240 languages, 24/7/365. LanguageLine Solutions facilitates more than 32 million phone, video, and onsite interactions each year; a new connection every second.” The acquisition will be fully financed through a debt financing provided by Crédit Agricole, HSBC and Société Générale. Paul Hastings LLP and Linklaters LLP acted as legal advisors to Teleperformance. Credit Suisse and Morgan Stanley acted as financial advisors to LanguageLine Solutions, and Kirkland & Ellis LLP acted as legal advisor. The deal is expected to close before year end, subject to regulatory approvals and other customary closing conditions. Teleperformance serves companies around the world with customer care, technical support, customer acquisition and debt collection programs. In 2015, it reported consolidated revenue of €3.4 billion ($3.7 billion). The group operates 147,000 computerized workstations, with close to 190,000 employees across 311 contact centers in 65 countries and serving more than 160 markets. It manages programs in 75 languages and dialects on behalf of major international companies operating in a wide variety of industries. LANGUAGE INDUSTRY IS BIG BUSINESS More than 6,500 languages are spoken around the world. The global market for outsourced language services and technology was over $38 billion in 2015 and the 2016 market was estimated at nearly $41 billion, with more than half of it within Europe, according to independent market research firm Common Sense Advisory (CSA Research). The language industry is big business, with the worldwide language services market growing at an annual rate of 8% for the past several years, and a projected growth rate of 6.5-7.5% annually through 2018, CSA says. In its 2015 annual report CSA listed the Top 100 Language Service Providers or LSPs worldwide, ranking Lionbridge Technologies (US), TransPerfect (US) and HPP ACG (FR) in the top three spots. LanguageLine has not been listed by CSA among the Top 100 in recent years. Photo: “The Tower of Babel” by Pieter Bruegel the Elder (1563).]]>

@TransPerfect $1B Tower of Babel Exit Strategy in Hands of Delaware Court

@TransPerfect $1B Tower of Babel Exit Strategy in Hands of Delaware Court

TransPerfect Global Inc., one of the world’s leading providers of translation, website localization, and litigation support services. It is also a WBENC-certified women-owned business. TransPerfect reportedly generated over $500 million in revenues and $80 million in EBITDA in 2015. The company is said to have a market value in excess of $1 billion. TransPerfect is a Delaware corporation with its headquarters in New York City, and regional headquarters in London and Hong Kong. It has offices in 90 cities worldwide, employs more than 3,500 full-time employees, and maintains a network of more than 10,000 translators, editors and proofreaders working in approximately 170 different languages. More than 3,000 global organizations employ TransPerfect’s GlobalLink product suite to simplify management of multilingual content. LANGUAGE BARRIERS The court case chronicles “the tumultuous relationship of two individuals who started a company (TransPerfect) in a college dormitory room over twenty years ago,” while attending business school at NYU. The company grew from a two-person operation into one of the top 125 privately held companies in New York. One co-founder, Liz Elting. owns 50% of the company. The other co-founder, Phil Shawe, owns 49%. They currently serve as TransPerfect’s co-CEOs and its only two directors. The remaining 1% is owned by Shawe’s mother, Shirley Shawe, who is firmly aligned with him. “Shawe has accused Elting of spiking his ankle with her pointy pumps and throwing a pitcher of water at him in a conference room; she, in turn, has accused him of crashing her Jamaica wedding and hiding under her bed during a business trip to Brazil,” the New York Post says. DELAWARE COURT OF CHANCERY: THE NEW GOLDMAN SACHS Delaware Judge Andre G. Bouchard accepted the recommendation of attorney Robert B. Pincus, a partner at Skadden Arps Slate Meagher & Flom, the custodian appointed to oversee the judicially ordered sale of TransPerfect, to pursue a modified auction “permitting each stockholder to bid for control of the Company (alone or in partnership with a third party), as well as permitting third parties (unaffiliated with the stockholders) to bid for the Company.” After his appointment by the court on August 13, 2015, Pincus engaged Houlihan Lokey Capital to act as financial advisor, Alvarez & Marsal to provide financial and operational services, and Grant Thornton to perform an audit assessment and eventually an audit. Pincus concluded that, absent a consensual resolution before implementation of a sale order, the modified auction would be “the alternative most likely to maximize stockholder value while continuing the business as a going concern (and which can be accomplished in a reasonable time frame).” The court granted Pincus “complete control of the auction process,” including among other things, “determination of ‘qualified’ bidders to participate, … the number of rounds of bidding, … selection of a winning bidder…” and “retention of financial advisors and other consultants to assist the Custodian with execution of the auction process.”

“In essence, the court stepped into the role typically reserved for experienced M&A investment banks, with far greater expertise, resources and access to the global private equity and capital markets, which could arguably have been able to produce much faster and far better results for all the stakeholders involved,” commented ExitHub’s CEO Norbert Mehl. “This story is reminiscent of the biblical Tower of Babel.”
“It’s never happened in American history, for a private, profitable business to be taken over by the government in a forced sale,” Shawe said. “Mr. Shawe is resolute that the company never faced irreparable harm regardless of any alleged acrimony between the shareholders,” said his attorney Martin Russo. “He is confident that the company will continue to prosper and reiterates his offer of $300 million cash to Ms. Elting for her shares.” Elting declined Shawe’s offer and made in turn her own $300 million counteroffer for her ex-partner’s shares, which he declined. THE TOWER OF BABEL: BIG BUSINESS [caption id="attachment_432505" align="aligncenter" width="1024"]The Tower of Babel by Pieter Bruegel the Elder (1563) The Tower of Babel by Pieter Bruegel the Elder (1563)[/caption]
“The Tower of Babel (/ˈbæbəl/ or /ˈbeɪbəl/; Hebrew: מִגְדַּל בָּבֶל‎‎, Migdal Bāḇēl) is an etiological myth in the Book of Genesis of the Tanakh (also referred to as the Hebrew Bible or the Old Testament) meant to explain the origin of different languages,” says Wikipedia. “According to the story, a united humanity of the generations following the Great Flood, speaking a single language and migrating from the east, came to the land of Shinar (Hebrew: שנער‎‎). There they agreed to build a city and a tower “tall enough to reach heaven”; seeing this, God confounded their speech so that they could no longer understand each other and scattered them around the world.”
More than 6,500 languages are spoken around the world. The global market for outsourced language services and technology was over $38 billion in 2015 and the 2016 market was estimated at nearly $41 billion, with more than half of it within Europe, according to independent market research firm Common Sense Advisory (CSA Research). The language industry is big business, with the worldwide language services market growing at an annual rate of 8% for the past several years, and a projected growth rate of 6.5-7.5% annually through 2018, CSA says. In its 2015 annual report CSA listed the Top 100 Language Service Providers or LSPs worldwide, ranking Lionbridge Technologies (US), TransPerfect (US) and HPP ACG (FR) in the top three spots. THE 28 ATTORNEYS AND 11 LAW FIRMS BACKING THE 2 INDIVIDUAL LITIGANTS Elting is represented by 13 attorneys and 4 law firms: Eric Stone, Gerard Harper and Robert Atkins of Paul Weiss Rifkind Wharton & Garrison LLP, Philip S. Kaufman, Ronald S. Greenberg, Marjorie E. Sheldon, and Jared I. Heller of Kramer Levin Naftalis & Frankel LLP, Kevin R. Shannon, Berton W. Ashman Jr., Christopher N. Kelly and Jaclyn C. Levy of Potter Anderson & Corroon LLP, and Kurt M. Heyman and Melissa N. Donimirsky of Proctor Heyman Enerio LLP. Shawe is represented by 15 attorneys and 7 law firms: Ronald C. Minkoff, Richard M. Maltz and Andrew J. Ungberg of Frankfurt Kurnit Klein & Selz LLP, Philip L. Graham Jr. and Penny Shane of Sullivan & Cromwell LLP, Howard J. Kaplan and Joseph A. Matteo of Kaplan Rice LLP, Gregory P. Williams, Lisa A. Schmidt and Robert L. Burns of Richards Layton & Finger PA, Peter B. Ladig, Brett M. McCartney, Kyle Evans Gay of Morris James LLP, and Paul D. Brown of Chipman Brown Cicero & Cole LLP, and David L. Finger of Finger and Slanina LLC. Photo: Liz Elting, Co-Founder & Co-CEO of TransPerfect. (SmartCEO/Mindy Best; Inset: Wikimedia)]]>