Lionbridge, one of the world’s leading language service providers, has sold Lionbridge AI, its data annotation business, to Canadian communications and information technology company TELUS for approximately CAD 1.2bn (approximately USD 935m).
Slator estimates the AI segment’s revenues to be around USD 200m. The unit employs more than 750 employees, according to TELUS’ press release. The deal is expected to close on December 31, 2020.
TELUS, which brands itself as a “digital customer experience (CX) innovator”, says it acquired Lionbridge AI to “support important AI applications as demand for high-quality, multilingual data annotation continues to increase”.
In 2019, the Toronto-listed company generated revenues of over USD 11bn and currently has a market cap of USD 23bn.
The news marks a big win for Lionbridge’s private equity owner H.I.G. Capital, which, after acquiring the Massachusetts-based company in late 2016 for USD 360m, launched an ultimately failed bid for US-rival TransPerfect. With the TELUS deal, H.I.G. already nearly tripled its original investment within the space of four years while still holding on to Lionbridge’s translation and localization business.
In late 2018, Lionbridge was rumored to be exploring a public listing in Australia, home to number one data annotation provider Appen. The IPO never came to pass, however.
Data annotation has become a major growth market and an attractive niche for language service providers. TELUS said that “Lionbridge AI annotates data in text, images, videos, and audio in more than 300 languages and dialects for some of the world’s largest technology companies in social media, search, retail and mobile”.
Lionbridge has been in the data annotation business for years, leveraging the company’s strong ties to the world’s largest technology firms. Australia-based Appen’s meteoric rise to a USD 3bn market cap provided a strong incentive for Lionbridge to put the focus on this fast-growing segment. In 2019, Lionbridge acquired Tokyo-based Gengo, folding it into its AI business.
Speaking at SlatorCon London in 2019, Lionbridge CEO John Fennelly said that “where Gengo in AI is very consistent with where we want to go. So it was a question for us: do we build out those capabilities or do we take what Gengo is building out with their platform and buy them?” (Watch the video highlights of Fennelly’s SlatorCon appearance here).
HI-COM is a multilingual translation agency dedicated to providing companies worldwide with high quality translation services.