June has become the month for acquisitions, although the companies involved in this year’s round of couplings have been positioning their purchases as “mergers.” A big driver of the merger concept is to make the owner/operator of the acquired firm (M2, for example) feel more comfortable about being absorbed into a bigger entity. This approach isn’t new, neither in the general market (e.g., DaimlerChrysler) nor in language services and technology — we have heard SDL executives, competitors, and other analysts talk about the June 2005 Trados deal as a merger, but largely to mollify the acquirees (less often, the buyer creates a new division, as Translations.com did with ArchiText). Whatever you call it, one company has the wherewithal to acquire another. That buying company usually keeps its name on the headquarters building and its CEO retains the cushiest office on Mahogany Row. What happens to the acquired firm? In the immortal words of the the Borg, “resistance is futile. You will be assimilated.”

With that semantic point out of the way, let’s consider the latest business development in the area of language services. Coto Global Solutions announced that it “acquired” Lingo Systems (founded 1992). Bravo! There was no mention of merger in the press release, but in his cover note, Lingo marketer Jeff Williams’ wrote that “…over time, it has become very clear that the two companies should merge.” Oh well.

Why isn’t Coto’s buy-out of Lingo Systems really a merger? Lingo has been trying to sell itself for at least 5 years. The owners of the company (2 remain from the original group of 5 founders) will retire after a short management contract for the transition. Even though they actively worked with clients, owners Ursula Mühlhaus-Moyer and Willy van Grunsven did not run the company. For the last several years they have had professional executives in the CEO and COO positions.

The problem that Mühlhaus-Moyer and van Grunsven have had until now — and this will be no surprise to any owner/operator looking for a mega payout that will fund a lifestyle to which he would like to become accustomed — was that they never got valuations that pleased their bankers.

So where can Coto go to? The company now offers a wider array of language services than it did before, ranging from over-the-phone interpreting (OPI) through its Teleinterpreters unit to translation services for commercial and government buyers.

Coto executives would not disclose any numbers. Coto claims that post-acquisition it is now in the top 10 of language service providers. Until we can discuss revenue and verify it with 2 other sources, we cannot add them to our verified-revenue list of top 20 translation agencies.

We hear through the grapevine that more acquisitions are on the horizon, so it looks like it’s going to be a busy summer. Stay tuned for the next episode!