Straker buys US company, updates on ASX plans

Grant Straker

Grant Straker on his company's latest offshore acquisition and IPO plans

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IPO prospect Straker Translations has made another offshore purchase, acquiring Elanex, a San Francisco-based language services provider. 

Founder and chief executive Grant Straker won’t comment on the purchase price but says Elanex has 35 staff, clients across the US, Europe and Asia and annual revenue around the $6 million. It specialises in technology, retail, energy, financial translations and over-the-phone interpretation services.

Post-deal, Straker’s annualised revenue run rate as a group will be close to the $20 million mark, the chief executive says.

He’s targeting break-even about the first quarter of 2018.

The Elanex buy follows Straker’s purchase of Dublin-based Eurotext (annual revenue: $2.5 million) in October last year.

Mr Straker says he’s on the prowl for further acquisitions, using a war chest supplied by David Kirk’s Bailador, which has invested just under $10 million across two rounds, the most recent in November (Companies Office records show Bailador now owns 14.68% of Straker Translations, making the ex-All Black captain’s investment firm the second biggest after Straker family members).

Mr Straker is still aiming to take his company public, but he now says the timeframe is an ASX listing within the next 12 months, pushing out his earlier target for an IPO this year. He says the key reason is to give his company time to digest its new acquisitions. He expects to appoint an advisor shortly and to begin pre-IPO activity this calendar year. His target market cap for the listing is $100 million.

The chief executive says his company’s artificial intelligence smarts give it an edge on free options such as Google Translate and are helping it gain in a crowded commercial market.

He estimates that with its $20 million revenue, Straker is now one of the top 20 translation players worldwide.

The Elanex deal takes Straker’s total headcount to just under 100. It has more than 10,000 customers in more than 20 countries and earns 80% of its revenue outside Australasia.

He says e-commerce clients – especially those exporting to or importing from China – are his company’s fastest growing segment.

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5 Comments & Questions

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"His target market cap for the listing is $100 million."

What metrics is Mr Staker using? If he's using the in-trend Price-To-Sales ratio for techies then this assumes a PS ratio of 5 ($100M mcap/$20M revenue) and that he is forecasting the company grow around 60% per annum. Can we then assume next year will see $30M+ revenue? Would love to read over this prospectus.

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If they can grow by say 50% in the next 12 months - organic and acquisition - the revenue multiple then would be around 3x which would probably be cheap.

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Dear Mouse (I do love contributors who hide behind a nom de plume)

As my late mum always said, you don't get the plot on the first page.

There may be more acquistions ahead, there may be more revenue growth, send no money now. Patience my friend, patience.

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Dear Steve,

Would appreciate it if you didn't get my species wrong to begin with. Hope your calculations are spot-on though ;)


Interested Furry Mammal with 4 Legs

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My apologies Goose.

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