INVESTMENT
Lionbridge buys Indian e-learning firm
10-09-2003
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In a move that is expected to boost profits and revenue, localisation company Lionbridge said it will buy Indian firm Mentorix for approximately USD21.3 million.
The cash purchase will dramatically boost Lionbridge's headcount from its current level of nearly 1,200 globally, to almost 1,900. The buy will provide the Delaware-based company with about 150 new clients and an arm that is experienced in developing and deploying e-learning content.
Still, the purchase does seem to mark a shift in Lionbridge's strategy. Currently, Lionbridge is best known as a leading translation and localisation firm, with strong expertise in the high-tech sector, counting the likes of Hewlett-Packard, IBM, Microsoft, Novell, Oracle, SAP and Sun Microsystems among its clients. The acquisition of Mentorix, however, suggests that company has ambitions to not only localise the content of others, but also develop and deploy more of its own content.
"We acquired Mentorix because it gives us an opportunity to develop new offerings based on the unique capabilities an India presence affords," said a Lionbridge spokesperson. "Just like our other geographic and strategic expansions -- from INTL, to DDI to Ireland and Brazil -- this acquisition provides us with another geographic resource with specific expertise that we can leverage and integrate into our client offerings over time as appropriate."
In Ireland, Lionbridge employs about 350 in Dublin, Galway and Ballina, Co Mayo. In fact, the firm was one of the earliest multinationals to look to Ireland in the mid-1990s as a location for its tech-focused business. The company's Ballina facility was launched almost six years ago to compliment its existing Dublin operation, while the Galway site was acquired in Lionbridge's purchase of DDI about two years ago.
In announcing the new site, Lionbridge did not detail any possible job losses at its other sites around the world, although the company is due to release further details about the acquisition in Wednesday afternoon.
Improved Outlook
Along with the acquisition announcement, Lionbridge delivered more positive guidance for the balance of 2003 and provided an increased outlook for 2004.
For the full 2003, the company said it expects organic revenue growth of approximately 19 percent over the prior year's revenue of USD118.3 million, or USD10 million more than its previous guidance of USD130 million for the year. Including revenues from Mentorix, Lionbridge's turnover this year should be between USD141 million and USD143 million, the firm said.
Net income should also rise this year to between USD7.5 million and USD8.5 million, compared to the firm's earlier estimate of USD4 million to USD8 million. These figures exclude one-time charges of USD2.1 million for debt repayments and other charges for restructuring and amortisation.
For the 2004 year, Lionbridge said that revenue should be in the range of USD160 million to USD170 million, about USD20 million more than its previous guidance. Net income is forecast to be in the range of USD15 million to USD19 million, compared to an earlier forecast of USD7 million to USD11 million.
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