The boards of RWS and SDL announced they “have reached agreement on the terms of a recommended all-share merger of RWS and SDL,” in a deal that sees RWS buy SDL outright. The transaction values SDL shares at a 52% premium over SDL’s most recent share price. SDL shareholders will own approximately 29.5% of the combined group, with RWS shareholders owning 70.5%. The SDL brand will disappear, and all SDL units rebranded as RWS over time. The combined company will remain listed on London’s AIM market and keep its HQ in Chalfont St Peter (UK). The deal is expected to be completed in Q4 2020, and RWS said they expect the transaction to result in double-digit earnings per share accretion. With pro forma FY2019 revenues of GBP 732m (USD 967m) and adjusted operating profit of GBP 116m, the combined organization will become the largest language service provider by revenue.
RWS emphasized the two businesses’ highly complementary nature as well as combining its services business with SDL’s proprietary technology and translation workflow software as key drivers of the deal. RWS said that after consulting with SDL management they expect at least GBP 15m in annualized cost savings from the deal. Andrew Brode, Chairman of RWS, will become Chairman of the Board of the Combined Group. Richard Thompson, CEO of RWS, will become CEO of the Combined Group. Desmond Glass, CFO of RWS, will become CFO of the Combined Group. From SDL, Azad Ootam, CTO of SDL, will become CTO of the Combined Group. Current SDL CEO Adolfo Hernandez and SDL CFO Xenia Walters will leave the company, but RWS said they “will enter into a new service or consultancy agreement with RWS.”