A titan in the industry of translations, language and localization services, TransPerfect has been facing some pretty tough times. The founding partners, Elizabeth Elting and Philip Shawe, who used to be a couple, have been going through a difficult “divorce” that has put the company’s future at stake. Shawe does not want to part with this beloved company, while Elting is eager to liquidate. The result: a court has appointed a custodian for the Delaware company, who will be the one to decide its future.
Since the dispute began, thousands of employees live in a state of uncertainty and fear, not knowing what the future holds. Will the company be sold to a third party? Will the company relocate? Will their job posts remain secure?
We talked to Barnaby Wass, the company’s Vice President, in order to get some answers.
Have alternative options, other than the sale to a third party, been considered?
One of the co-owners, Phil Shawe, has made Liz Elting an offer for $300 million to buy her part of the company. Also, a group of Senior Managers have made Liz an offer for her 50% of the company. Another option would be to appoint a third director as stated in the articles of incorporation.
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If the company was sold to a third party, would it be possible to negotiate the transfer of all personnel to the new company, maintaining the original conditions of employment, as has happened with Privalia and Vente Privee?
The employees were not involved or consulted in the process in any way and when 600 concerned employees sent a letter to the judge, it was not even acknowledged. There are also some very concerning Sovereignty issues as the judge has ordered that all Spain employee issues can’t be brought to Spanish court but need to be brought to Delaware. Including access rights to all TPT Spain employee personal phones and email accounts.
Has Lionbridge been interested in TransPerfect?
I am sure the perspective of a billion dollar company in this market is appealing to the Private Equity firm that acquired Lionbridge but this is pure speculation as I am not privy to who the potential buyers are. There is, however, a fundamental difference as the acquisition of Lionbridge was done in agreement and with a friendly management team whereas the TransPerfect management team is clearly hostile to any change in control as shown in the letter of concerned employees signed by all top executives and a total of 600 key employees.
Is there no possibility that Mr. Philip Shawe may end up buying the 50% from Ms. Elting, in order to keep the company?
It is public knowledge that Mr. Shawe has offered Ms. Elting to buy her part for $300 million. In the final ruling, judge Bouchard decided that 100% of the company has to be sold to the highest bidder in a controlled auction where the 2 co-owners could bid alone or partner with third parties. 3rd parties that have been vetted by the judge can also bid without the co-owners.
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When will the judge rule on the appeal by Phil Shawe?
One of the co-owners Phil Shawe filed an appeal against the decision to sell the company. The appeal largely focuses on Bouchard’s interpretation of TransPerfect as a dysfunctional company, considering TransPerfect has been growing for the last 20 years and is on track to reach $550m this year with 10% year on year, I am sure most companies would be happy to be experiencing such dysfunction.
Do you think the employees at Transperfect should be worried about their jobs?
TransPerfect employees are worried because of the uncertainty of the situation. If TransPerfect is sold to Private Equity, chances are that the company´s DNA and systems that have been the foundation of it’s success will change. We have seen this time and time again where Private Equity takes over the focus shifts from the customer to the investor and from a long term people and scalable vision to a short-term strategy aimed at a quick return. Offshoring jobs is a good way to cut costs short term but people and talent are all we have in the services industry so consequences to service levels and customer experience are often irreversible.