Zurmont’s CLS snaps up 4-Text

Eyeing further growth in Europe and Asia, the Swiss private equity firm has backed a third add-on acquisition for its language services portfolio company.

CLS Communications, a company owned by Zurich-based Zurmont Madison Management, has acquired German translation services provider 4-Text. 
The value of the transaction was not disclosed. 

This marks the third add-on acquisition for CLS, a language services provider, since Zurmont Madison took control of the group in 2009. It previously bought Lexitech International, a Canadian company focused on the North American market, and Denmark’s Scandinavian Translation Services, to tap growth opportunities in Scandinavia. 

4-Text offered the possibility for CLS to benefit from geographical synergies, Andres Ziegler, a partner at Zurmont Madison, told Private Equity International. “With the acquisition of 4-Text, CLS will be able to grow its presence in German-speaking European markets.” 4-Text is headquartered in Berlin, a location he described as attractive for its international workforce and strong IT base. 

Ziegler also explained that the groups have complementary service offerings. “4-Text has built a presence in the field of translation of technical documentations, a niche where margins are generally higher than in marketing or financial services translation. CLS was already active in this field but not very strong.” 

The demand for producing and translating technical documentation is growing fast, he said, because German-speaking markets count a lot of industrial companies with a strong focus on exports to new markets. 

CLS is now eyeing further opportunities in Asia, where the company already has three subsidiaries in four locations. Growth will likely be sought organically, Ziegler said, as the group hasn’t yet found suitable or affordable acquisition targets. 

CLS counts 600 internal staff, as well as 4000 external language and technical specialists. The acquisition of 4-Text will bring the group’s revenues to close to $95 million – almost double the $50 million sales CLS made when Zurmont Madison first invested in the company. 4-Texts’ revenues reach close to $10 million last year, and it is a very profitable business, Ziegler said. 

Zurmont is currently investing funds from its latest buyout vehicle, Zurmont Madison Private Equity. The fund held a final close at CHF 250 million (€201.48 million, $268.02 million) in 2007, in excess of its CHF 200 million (€161.18 million, $214.45 million) target. 

The firm acquired AKAtech, an Austrian electromechanical goods producer, in March 2012.