Semantix owner Segulah preps exit with William Blair

The process is in the preparation stage and sell-side materials are expected to be sent at the beginning of or just before the summer, one source familiar said.

William Blair was retained more than a year ago and has been working with the company strategically since, another source familiar said.

Semantix generates SEK 1bn (€98m) in annual revenues, according to the company's website. Its EBITDA margin is approximately 10%, one of the sources said.

There are a handful of strategic players that could be buyers for Semantix, one of the sources said, adding that a trade buyer is more likely since PE firms can often be turned off by business services at this time.

While Semantix's technology business is growing well, the translation services part was notably impacted by the Covid-19 pandemic last year, one of the sources said. A private equity executive agreed and added that while there is a clear need for translators, demand was higher five or six years ago during the European migrant crisis of 2015-2016. The more interesting part of the business is the software for translating video calls and automatic subtitles, the PE executive said.

Whether it will be an attractive asset to buyers depends on how far the company has come with its digitalisation process and how successful that has been, a banker following the situation said. The manual aspects of the sector will not be attractive in a sale, and while there is a need for these services, long-term they will mainly become digitalised, the banker added.

Semantix was originally established in 1969 and was acquired by Segulah in 2015. It has approximately 400 employees, based in seven countries and 11 offices, and it claims to be the 13th largest language company in the world. Its competitors include fellow Swedish company Plint, backed by Priveq.

Semantix declined to comment. Segulah and William Blair did not respond to requests for comment.

This article was originally published in Unquote sister publication Mergermarket

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