Globalink Moves to Top of Translation Pack

The Fairfax, Va., firm acquires Microtac Software just as the market seems to be maturing

Shareholders of Globalink, Fairfax, Va., have given final approval to the acquisition of Microtac Software in a move that would make the company the largest provider of foreign-language translation software.

And banking on the increasing maturity of that market, Globalink has also approved the increase in authorized shares from 5 million to 20 million.

At a special Nov. 22 meeting, the board of the firm approved the exchange of 880,000 shares of Globalink common stock for all the capital stock of Microtac Software. That would equal a purchase price of roughly $13 million.

Globalink this week traded just below $15 per share, down slightly from its 52-week high of $17 3/8, but still up sharply from the 52-week low of $7 1/8.

"The acquisition of Microtac is a real opportunity for Globalink's longterm profitability and growth in the continued development of foreign language translation software," said Harry E. Hagerty, board chairman, in a press release.

The moves come at a time when foreign language translation software seems to be coming of age by its own merit, after decades of mostly Pentagon funding. About a dozen commercial packages now exist, most for translating technical and business documents.

These packages are good enough to do nearly half the translation job automatically, according to a recent study from the Advanced Research Projects Agency conducted by PRC Inc.

Though that accuracy rate may sound low, it is a vast improvement over previous translation software. It is also enough to justify use of such software as an aid to old-fashioned translators, particularly where relatively straightforward, boilerplate language is involved.

The opportunity for Globalink is therefore huge, as the translation market matures from one dominated by early adopters. Gartner Group Inc., a market research firm, pegs the entire commercial and technical translation market at $20 billion, with related software tools generating a mere $20 million in annual revenues.

Globalink currently generates more than $7 million in annual revenues.

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"I don't think they [Citibank] are going to win this; they don't have a valid case."

-- Mark Frieser

Senior Analyst, Jupiter Comm.

Leading Suppliers of foreign language translation software

1993 Annual

Company/LocationCompany SizeRevenue ($ millions)Product

Globalink/Fairfax, Va.10012Power Translator

Systran Translation Systems (STS)/La Jolla, Calif.383Systran

Language Engineering Corp./Belmont, Mass.252LogoVista E to J

Linguistic Products/The Woodlands, Texas40.6PC Translator

Sietec/Berlin, GermanyN/AN/AMETAL/Eurolang Optimizer

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