Auckland, New Zealand: Straker Translations (ASX: STG), a leading global technology-driven translation services platform, has entered into a binding agreement to acquire 100% of the IDEST shares of cash and share consideration.
Straker has agreed to an upfront payment on completion of EUR€1.75 million (NZ$2.902 million2), for IDEST, comprising EUR €1.5 million in cash and EUR €250 thousand in shares at transaction completion in Straker ordinary shares at an issue price of AU$1.48per share.
The new shares will be issued under the Company’s 15% placement capacity under Listing Rule 7.1. In addition, Straker has agreed to pay additional consideration to IDEST’s vendors of up to an additional EUR€2.5m in cash over two years, the majority of which is contingent on hitting revenue growth targets.
The Company believes this structure strongly aligns the vendors with the ongoing success of the transaction.
The acquisition is to be funded via existing company cash reserves. IDEST’s management team, including its founder/CEO, will continue with the IDEST business after acquisition and will continue to manage IDEST operations from IDEST’s Belgium-based head office.
IDEST, which is based in Brussels, Belgium and was founded in 1990, has focused on serving international institutions with state-of-the-art, tailor-made translation services. IDEST has 18 employees.
The share purchase agreement is effective from 1 January 2022 . Completion of the transaction is not subject to any conditions precedent.
Strategic benefits The acquisition consolidates and extends Straker’s presence in the multi-billion-dollar European translation market, establishing new relationships with leading global institutions, including the European Commission, European Parliament, UNESCO, and the United Nations.
It also offers Straker acquisition synergies, including the gains that will come from the integration of the RAY Ai- powered translation platform into IDEST.
Often IDEST have only been dealing with central European languages and through Straker will be able to offer a much wider range of language solutions to their customers.
The transaction will materially boost Straker’s revenue and is EBITDA positive.