Icebreaker 8, May 2012

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Welcome to the eighth issue of Icebreaker, the STP newsletter.

With considerable pride and excitement, we are pleased to announce that STP Nordic has acquired all the shares of another Nordic translation company, Stockholm-based Tranflex AB and its UK subsidiary Tranflex Ltd. We are dedicating this entire issue of Icebreaker to the biggest news we have ever had to share!

Company news

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Complementary colours

So what’s the big deal?

STP Nordic was formed as a partnership by Jesper and Sara Sandberg in 1995 and incorporated five years later. The company now has 43 full-time salaried staff, mostly based at our office in Whiteley, and focuses on the Nordic languages instead of trying to service clients with all the languages of the world. A significant proportion of the translation work STP Nordic supplies is produced by its own in-house translators, which is a relatively rare model in our industry. Language service providers (LSPs) tend to focus on sales, admin, software engineering and process optimisation, but generally sub-contract the actual translation work. STP Nordic sometimes defines itself as a “translation production company” to draw a distinction from these “translation management companies”.

The vast majority of STP Nordic’s work is repeat business from long-standing clients, many of whom have worked with us for over 10 years. Particularly with our larger clients, we aim for strategic partnering relationships rather than simple client-supplier cooperation. Much of our growth in recent years has been with existing clients and through reactivation of former clients, but we also continue to gain new contacts by attending and sponsoring industry conferences and presenting at these.

Tranflex AB (AB is short for Aktiebolag, the Swedish word for “limited liability company”) was formed in Sweden in August 2001. Initially the company was a traditional full-service translation company and all translation work was sub-contracted to freelancers. A significant growth period in 2007–2008 with increasing volumes of work from larger translation companies, and only in a few specific language combinations, started a new phase in the company’s development. Although never a conscious strategy, the amount of work from other LSPs continued to grow, and in 2010 Tranflex opened a subsidiary, Tranflex Ltd, in London. Today, the two offices house a strong Nordic team of 15 in-house staff and a tight network of external translators and reviewers who supply LSP clients with complex “continuous localisation” services. In contrast to STP Nordic’s active role in the translation community, Tranflex has kept a relatively low profile. But those who have had the pleasure of working with the company appreciate the professionalism, commitment and service-mindedness that permeate everything they do. It is all summed up in the name: Tranflex approaches each new cooperation opportunity with adaptability and flexibility, which, combined with sheer hard work, has brought the company to where it is today.

STP Nordic had been an occasional supplier of Finnish translations to Tranflex since early 2010, but our collaboration was never extensive and our knowledge of each other very limited. Our instinctive feeling was that we were probably more competitors than collaborators. However, after venturing out to discuss our experiences in our shared niche of the market, we realised that the existing similarities between the companies would be a significant strength if combined to form a single entity. There were clearly great technological, staffing, client and supplier synergies to be explored. We visited each other’s offices, talked about best practices and decided to brave it together. The share purchase agreement was finally completed and signed this week and the new, enlarged STP Nordic now looks forward to the rest of 2012 as a year of optimisation of all the positives each company will contribute.

Staff News

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Renaissance man

Chris Phillips, the former Managing Director of Tranflex, joins the STP Nordic management team as the company’s Process and Account Manager. Having worked on many high volume and high profile projects during his 12 years in the translation and localisation industry, Chris brings invaluable new resources to the team. Although his new role focuses on technology optimisation and key account management solutions, he has expertise in all areas of our industry: sales, marketing, business development, vendor management, project management and IT.

The founder of both Tranflex AB and Tranflex Ltd, Chris is a down-to-earth, solutions-driven leader. He has a practical take on challenges; having learnt the hard way how to deal with one of the most common file formats his clients used to send him, Chris wrote an e-book “InDesign for Translators” to make sure no-one else would have to struggle to prepare the files for translation like he had. One of Sweden’s first certified SDL Trados trainers, Chris has supported his translators and clients as a technology consultant as well as by developing numerous tools from simple macros to architecting a full-blown translation project management system.

Due to the exceptional growth Tranflex experienced in recent years, the company had reached a size where it needed improved functions across HR, finance and business management. Since Chris knew his own expertise lay in production optimisation, he started to look for a partner with an established and more mature infrastructure within which his staff could continue to focus on their strengths. He found this match in STP Nordic. Chris will continue to oversee Tranflex operations until closer integration within the new company is achieved over the next 12 months.

Industry issues

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All change

Consolidation in the translation market through acquisitions has been a major development over the past 10 years. Last year’s Language Services Market Report from Common Sense Advisory (May 2011) stated that although consolidation has been taking place since the industry began, there is a recent trend of more mid-sized and small LSPs initiating mergers and acquisitions. In the survey, 9.2% of all participating companies had indicated that they hoped to be able to make an acquisition in the medium term. M&A is no longer a game just for the big players and the report concluded that “companies with annual revenue of USD 5 million may be interested in buying a smaller competitor (or two) as part of their growth strategy”.

M&A sessions at the past two GALA conferences have raised a lot of interest and discussion. At GALA 2012 last month, one of the speakers quoted from Spencer Johnson’s Who Moved My Cheese saying that the thought he had personally found inspiring was “What would we do if we weren’t afraid?” The book is all about facing change and dealing with it, and change is certainly the one topic common to all translation industry conferences and forums these days. The TAUS European Summit meeting in Paris at the end of this month serves as a worthy example; it focuses on finding strategies for the “eight things to change” as our world moves on from the 20th century product localisation practices and the industry is challenged to catch up with the times.

We all need courage to face the inevitable developments in our industry. Both STP Nordic’s and Tranflex’s working models and processes have changed dramatically in recent years as we have adapted to the high demands of fast turnaround times and complex workflows. Our motto has always been to provide a best-of-breed service. With a bigger team and enhanced experience, STP Nordic can now take strides forward in process innovation and strategic solutions development. After all, magic always happens outside of the comfort zone.

Nordic focus

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Where we are headed

Both STP Nordic and Tranflex have operated primarily as suppliers of Nordic language solutions to other LSPs, investing in fulfilling the needs of our key clients and developing workflows and technology in order to succeed in the industry by reaching a critical mass, achieving economies of scale and focusing on quality deliverables. It is our intention to maintain this successful business model and strengthen our position by pooling the expertise of our companies.

Whilst STP Nordic has always adhered to a pure industry supplier role, Tranflex has served end clients in Sweden in the past. Over the last five years, however, Tranflex’s operational focus has been with a small number of key LSP clients where Tranflex has been their preferred supplier on a number of end client accounts. Due to the success of this approach, they have not actively promoted their services in the end client market.

This key focus remains unchanged. STP Nordic and Tranflex have long shared a reputation in the translation industry for serving their clients with cutting-edge solutions, and the acquisition brings together the very best of the two organisations. The enlarged STP Nordic will be an innovative and dynamic industry partner with increased capacity, improved technical know-how and insightful management. Our clients will see few changes in the first year with the three operating companies remaining separate legal entities, keeping their trading names and operating as usual from their current offices in London, Whiteley and Stockholm. But in the back office, our team will be breaking ground, digging deep, planting seeds and nurturing growth – figuratively speaking, of course – in order to one day reap the benefits of what we have started today.

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