In the wake of owning LanguageLine for an entire 12 years, private value firm Abry Partners at long last figured out how to exit. On August 22, 2016, French call focus behemoth Teleperformance reported the obtaining of Monterey, California-based LanguageLine Solutions for a noteworthy USD 1.522bn. Abry Partners had purchased LanguageLine in 2004 for USD 720m.
The cost is fundamentally over the USD 1bn refered to by Bloomberg prior in 2016. While LanguageLine’s incomes in 2015 were open at USD 388m, its particularly high productivity at a balanced EBITDA of USD 147m in 2015 may come as somewhat of an astonishment to an industry used to squeezing out overall revenues around the 10% imprint. At 10x EBITDA, the valuation is still rich contrasted with other late exchanges in the dialect business.
The price likely also reflects general market growth. LanguageLines’ competitor CyraCom recently made it to the Inc. 5000 list, posting a three-year revenue growth of 125%.
Paris-based Teleperformance’s core business is operating call centers. Founded in 1978, the company employs 190,000 employees in 65 countries and, in 2015, generated revenues of EUR 3.4bn. Profits on EBITDA-level in 2015 were EUR 351m. The company’s largest operations in terms of headcount is located in the Philippines, where it employs over 38,000 staff, followed by the US (26,200), Mexico (15,800), and Brazil (15,000).
Teleperformance trades on the Euronext Paris market. The company’s shares have been on a tear over the past four years and are up nearly 400% since July 2012, giving the firm a market capitalization of over EUR 5bn.
The procurement is Teleperformance’s first raid into the dialect administrations industry. Its scale and aptitude in substantial outsourcing contracts could make the organization a critical new compel in the business if it extend past the elucidation market.
For the time being, however, the arrangement is by all accounts about enhancing Teleperformance’s main concern and obtaining an integral administration with covering customer portfolio.
A press release quotes Teleperformance CEO Paulo César Vasques as saying that LanguageLine works with “a large array of clients in verticals that we already service in customer service and technical support.” The same press release also says the acquisition will “positively impact Teleperformance’s profitability profile.”
The markets agree and Teleperformance shares were up 6% at press time despite the deal’s rich price tag. Teleperformance says the transaction is expected to close before year-end and is subject to certain regulatory approvals.