SDL Buys VC-Backed Language Weaver

LONDON  (Reuters) – British translation company SDL (SDL.L) said on Thursday it had bought U.S. technology firm Language Weaver Inc for $42.5 million in cash to improve its applications in the fast-growing automated translation sector. SDL’s chairman and chief executive Mark Lancaster said digital content was set to rise tenfold in the next five years, and more of it would require translation by machine as there were not enough human translators to do the job.

“We regard Language Weaver as the best-in-class machine translation technology in the world today,” he said in a statement.

Los-Angeles, CA-based Language Weaver’s technology is already used by websites such as review site TripAdvisor to provide instant translations of user-generated content.

SDL, which translates documentation for global companies such as Dell and Canon, said the deal would be dilutive to earnings in 2011, mainly because of amortisation, but would be earnings enhancing after.

Analyst Tintin Stormont at Singer Capital Markets said the deal secured SDL’s position in the market and opened up potentially significant opportunities in other sectors like government.

“This acquisition is quite strategic — as the amount of content online grows rapidly, machine translation will become an integral part of enterprises’ content creation and management strategy.” he said.

Shares in SDL were 0.7 percent higher at 0951 GMT, underperforming a 2.2 percent stronger FTSE 350 software and computer services index .FTNMX9530.

(Reporting by Paul Sandle; editing by Elaine Hardcastle)

peHUB Note: Language Weaver had raised over $4 million in VC funding from In-Q-Tel, Palisades Ventures and Tech Coast Angels.