What is the Value of My Language Business?


If you are a Language Service Provider (LSP) looking to sell your business, how do you determine the value/price.  Let’s start with several items that do not count in any significant way towards determining the actual value of your globalization business.  If you have a GSA contract with no revenue generated from it—this does not improve the price of your business.

If you have multiple Fortune 500 accounts, and you do less $5K revenue annually, the ‘potential’ for future business does not factor in to the price of your business.  If you have developed your own Translation Memory Tool or Content Management System and hope to one day, sell this tool on the market for ‘future’ revenue, this does not factor in to the price of your current business.  If you own the building where your company is, the language buyer may not want to buy the building.  So it is a separate transaction from pricing your language business.

The value/price of your language business is determined by averaging your adjusted EBITDA number over the past three years and then using a multiple of your EBITDA number to determine a competitive price.   For example, a $2 million translation business that has an average EBITDA of 15% or $300K over the past three years.  Multiply this number by 3 and the value of the Translation business is $900K.  If your business is $2.5 million or below, the multiple of EBITDA is about 3 X.  If your business is between $3-$6 million in annual revenue, the EBITDA multiple is closer to 4-5X.  The multiple of EBITDA increases the larger your revenue.

For more information contact:

Michael Klinger

Language Transactions


SUITE 203, ACTON MA 01720



PHONE: 978-429-8014

FAX: 978-429-0671