Recommended All-Share Combination of RWS Holdings plc and SDL plc

The SDL Board and RWS Board are pleased to announce that they have reached agreement on the terms of a recommended all-share combination of RWS and SDL, pursuant to which RWS will acquire the entire issued and to be issued share capital of SDL.

The Combination will create a truly global provider of language services and technology. The Combined Group will be a broad-based, well-funded business benefitting from increased scale, superior capabilities, an expanded geographic footprint and a highly experienced management team.

The RWS Board and the SDL Board believe the Combination has compelling strategic logic with the potential to deliver substantial benefits to the shareholders, customers, employees and other stakeholders of both RWS and SDL.

Key terms of the Combination

Based on the Exchange Ratio and the Closing Price of 741 pence per RWS Share on the Latest Practicable Date, the Combination values each SDL Share at 907 pence and SDL’s existing issued and to be issued share capital at approximately £854 million, representing a premium of:

52 per cent. to SDL’s closing share price of 598 pence on 26 August 2020.

On the basis of the Exchange Ratio and the volume-weighted average share price per RWS Share over the six month period ended 26 August 2020 of 562 pence, the Combination values each SDL Share at 688 pence, representing a premium of 40 per cent. to SDL’s volume-weighted average share price over the same period.

Immediately following Completion, SDL Shareholders will own approximately 29.5 per cent. and RWS Shareholders approximately 70.5 per cent. of the Combined Group on a fully diluted basis.

Upon Completion, the Combined Group will be called RWS, headquartered in Chalfont St Peter and listed on AIM.

Commenting on the Combination, Andrew Brode, Chairman of RWS said:

“Bringing together our two businesses creates the world’s leading language services and technology group, allowing us to provide a broader and enhanced offer to an expanded client base. As a Combined Group we will have comprehensive capabilities across a range of language services, language and content software and solutions, and IP services, further enhancing the two companies’ customer propositions.”We have a proven track record of creating shareholder value through the successful integration of businesses and we are confident that the Combined Group will deliver compelling strategic and financial benefits, as well as generating significant synergies for shareholders of both companies.”The Combined Group will have an attractive cash generative profile and is expected to have a net cash position at Completion, which will enable future investment in organic and acquisitive growth opportunities, alongside the continuation of our progressive dividend policy. “We look forward to working with the SDL team to maximise the significant opportunities ahead.“

Commenting on the Combination, David Clayton, Non-Executive Chairman of SDL said:

“Having served as Chairman of SDL for seven years, I have been particularly delighted to see the growth of our business, with SDL now recognised as having market leading technology. On behalf of the SDL Board, I would like to thank the management team under the leadership of Adolfo and Xenia and our employees worldwide for making SDL the company it is today. The implied premium of 52 per cent. for SDL Shareholders is a reflection of this achievement. “The Combination will create the world’s largest language services and technology group, leveraging the strengths of both businesses for the benefits of our customers as well as our shareholders, and I am particularly excited by the opportunity to lever our market leading technology and workflow solutions across the Combined Group. I believe that the scale of the Combined Group will provide significant opportunities for our employees to play a significant role in transforming our industry for the benefit of our customers.“

About SDL plc

SDL is the intelligent language and content company. Their purpose is to enable global understanding, allowing organizations to communicate with their audiences worldwide, whatever the language, channel or touchpoint. They work with over 4,500 enterprise customers including 90 of the world’s top brands and the majority of the largest companies in our target sectors. They help their customers overcome their content challenges of volume, velocity, quality, fragmentation, compliance and understanding through our unique combination of language services, language technologies and content technologies.

Ticker: SDL
Market Cap: £544.83 million*
Website: Click here

About RWS Holdings plc

RWS is the world’s leading provider of intellectual property support services (patent translations, international patent filing solutions and searches), a market leader in life sciences translations and linguistic validation, a leading localization provider, and a high-level specialist language service provider in other technical areas, providing for the diverse needs of a blue-chip multinational client base spanning Europe, North America and Asia.

Ticker: RWS
Market Cap: £2,039.15 million*
Website: Click here

*As at 26/08/2020