SDL PLC

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SDL PLC

Globe House, Clivemont Road
Maidenhead
SL6 7DY
United Kingdom
Telephone: +44 1628 410100
Fax: +44 1628 410505
Web site: http://www.sdlintl.com

Public Company Incorporated: 1992
Employees: 1,174
Sales: £64.38 million (2003)
Stock Exchanges: London
Ticker Symbol: SDLLF
NAIC: 518111 Internet Service Providers

SDL PLC is one of the world's leading localization services providers to businesses seeking a global market presence. SDL's localization services involve translating and adapting such materials as user interfaces, web sites, help files, and other documentation, as well as sales, training, and marketing materials for local markets. SDL has been particularly active in developing automated translation software, such as its Knowledge-based Translation System ("KbTS"), launched in 2004, which promises to automate as much as 80 percent of translation work, with the remainder to be polished by the company's pool of some 2,000 onsite and freelance translators. SDL also provides "internationalization" services, such as the re-engineering of software to meet specific country-based computer platforms. SDL operates more than 40 offices in its primary markets in the United Kingdom, the rest of Europe, and the United States. The United States is the company's largest single market, at approximately one-third of total sales, while Europe, apart from the United Kingdom, provides more than one-third of sales as well. The company also operates offices in Asia, Central and South America, and Canada and Mexico. SDL has successfully taken advantage of the worldwide boom in Internet activity, nearly quadrupling its sales, to £64 million in 2003, since its initial public offering on the London Stock Exchange in 1999. SDL is led by founder, Chairman, and CEO Mark Lancaster.

Recognizing a Niche in the Early 1990s

Mark Lancaster was working as international development director at the United Kingdom's Ashton Tate in the early 1990s when he recognized the potential for a new type of service: providing localization services to the increasingly global marketplace. As corporations expanded from country-specific businesses to multinational operations, they were often confronted with the need to adapt their sales and marketing materials, documentation, product brochures, and even the products themselves, to their new foreign market. Faced with the complexity of the task—particularly for companies active in many different markets—corporations increasingly sought to outsource their localization needs. At the same time, the rise of the Internet introduced the need to develop a new type of multinational marketing tool, with web sites tailored for specific languages, cultures, operating platforms, and the like.

Lancaster founded SDL in 1992, initially to provide localization services for software developers. Translation played an integral part of the company's operations from the beginning. SDL quickly extended the scope of its operations, however, and in 1994 the company began investing in multimedia studios and developing a range of multimedia and design production techniques that enabled it to win contracts from such multimedia giants as Sony Corporation, for whom SDL began developing localized versions of popular Sony PlayStation games, and the Disney Company.

In 1995, SDL expanded its translation services with the acquisition of Amphion Solutions Ltd. That purchase brought SDL Amphion's leading-edge translation memory software, called Amptran. Translation memory software promised the increasing automation of translation tasks—such as the revision of software materials from previous versions—essentially by memorizing and then recognizing key words and phrases. In this way, the need for human input could gradually be reduced—also reducing the cost of translation.

With its multinational client base, SDL quickly began expanding into the international market. In 1995, the company opened its first branch office in France. The following year, the company entered the United States and Japan.

In order to continue its expansion, SDL turned to investment group Friends Ivory & Sime Private Equity, which provided the company with a £1 million capital injection in 1997. SDL then made a new acquisition, paying £1.4 million to acquire Sheffield, England-based Polylang. That purchase boosted SDL's capacity for localization services, as well as added Polylang's (renamed as SDL Sheffield Ltd.) web site development capability.

In 1998, SDL once again turned to the private investment market, now raising another £1.1 million through Friends Ivory & Sime and through JO Hambro. The company then used the investment to step up development of its own in-house software translation technologies. This resulted in the launch of SDLX, a 32-bit translation memory software package featuring "fuzzy logic," in 1999, followed by SDL WebFlow, in 2000.

Localization Leader in the 2000s

By then, SDL had established 12 branch offices in seven countries—including China, where SDL opened an office in 1999. That year marked a new milestone for the company, when it listed its shares on the London Stock Exchange. Enthusiasm for the company's technology, and for the prospective growth in the localization services sector, helped propel the company's shares from an initial price of 134p to a peak of more than 800p at the height of the tech stock craze of the early 2000s. SDL's performance seemed to bear out its stock price, as the company doubled its sales in 1999 over the previous year to more than £21 million.

Backed by its public listing, SDL began a series of takeovers in the early 2000s that enabled it to emerge as a leader in the worldwide localization market. A major step forward came in April 2000, when the company reached an agreement to acquire money-losing International Translation and Publishing Limited (ITP) for £14 million ($22 million). The acquisition helped boost SDL's international presence, with offices in Ireland, Spain, Italy, and Hungary, among others.

As Lancaster told Language Technology News: "Following the launch of SDLWebflow in January, SDL has received significant interest from global corporations who recognize the necessity for multilingual Web sites and require an efficient means of maintaining quality content in international markets. The acquisition of ITP allows the company to not only supply the leading technology available in the market but also to maintain existing and new clients' globalization demands and to provide an excellent platform to launch new workflow technology in the near future."

SDL successfully restored the ITP operations to profitability within months after integrating it into its organization. SDL's acquisition spree continued through 2000, with the purchase of ATR Information AB, based in Sweden, giving SDL access to the Scandinavian market. At the beginning of 2001 the company bought three localization companies from Sykes Technologies Inc. Paying slightly more than $500,000, SDL gained new offices in Boulder, Colorado, marking the company's first production capacity in the United States, and in Edinburgh and Belgium. Soon after, the company paid $9 million to acquire U.S.-based Transparent Language Inc. and its Transcend Machine Translation software technology. By the end of 2001, the company's revenues had doubled again, topping £42 million.

The beginning of 2002 brought the next milestone in SDL's expansion—in January of that year the company completed the acquisition of its chief U.S. rival Alpnet, paying $7 million. The deal doubled SDL's size, giving it critical mass in the highly fragmented translation and localization market. SDL now claimed a leading stake as one of the four large-scale localization specialists.

SDL continued to seek out new business areas in 2003, buying up Russia-based Lomac, a leading provider of translation, software, electronic technical document publishing, and web site content in development. That purchase strengthened SDL's presence in the Eastern and Central European markets. By the end of that year, SDL's growth efforts had paid off, with sales topping £64 million.

Company Perspectives:

Our mission is enabling global business. We have built our business on the following principles: Quality processes; Customer partnerships; Professionalism across all activities; Energetic investment in staff development; Support for different cultures and communities.

Key Dates:

1992:: Mark Lancaster founds SDL in order to exploit the newly developing localization niche.
1993:: The company begins developing multimedia and production technologies.
1995:: Amphion Solutions Ltd. is acquired; the first French office is opened.
1996:: Offices are opened in Japan and the United States.
1997:: The company acquires Sheffield, England-based Polylang.
1999:: SDL goes public on the London Stock Exchange; International Translation and Publishing Limited is acquired.
2000:: The company acquires ATR Information AB, based in Sweden.
2001:: The company acquires three companies from Sykes International, including its first U.S. production operation in Boulder, Colorado; the company also acquires Transparent Language Inc. (U.S.A.).
2002:: The company acquires rival Alpnet in the United States.
2003:: The company acquires Lomac in Russia to gain access to Eastern and Central European markets.
2004:: The company debuts new software technology, KbTS, for Knowledge-based Translation System.

Amid its acquisition drive, SDL also had been preparing its next-generation software technology. That package debuted in July 2004 as KbTS, for Knowledge-based Translation System. The new software promised to cut translation costs as much as 60 percent by automating as much as 80 to 90 percent of the translation process—as compared with just 40 percent for rival products. While the new system retained a need for real-time translators, whose job consisted, in large part, of polishing the machine-translated document, it also promised to double and even triple an individual translator's output. The launch of KbTS clearly established SDL as the global localization services leader.

Principal Subsidiaries

Alpnet Inc. (U.S.A.); Bengbu Alpnet Technology Co. Ltd. (China); Lomac CZ S.R.O. (Czech Republic); Lomac d.o.o. Ljubljana (Slovenia); Lomac d.o.o. Zagreb (Croatia); Lomac Elite S.R.L. (Romania); Lomac Magyarorszag Szolgaltato Kft. (Hungary); Lomac Sp. z.o.o. (Poland); SDL Global Solutions (Ireland) Limited; SDL International (Canada) Inc.; SDL International Belgium N.V.; SDL International Nederland B.V. (The Netherlands); SDL Italia S.R.L.; SDL Japan KK; SDL Multilingual Services GmbH & Co. KG; SDL Multi-Lingual Solutions (Singapore) PTE Ltd.; SDL Sheffield Limited; SDL Spain SL; SDL Sweden AB; SDL Technology Centre Limited (Ireland); Software & Documentation Localizations France S.A.R.L.