(By Balaseshan) Lionbridge Technologies Inc. (NASDAQ: LIOX) said it has agreed to buy privately-held crowd-sourcing services provider Virtual Solutions Inc.
Lionbridge expects to buy Virtual Solutions for a total estimated consideration consisting of $3.6 million to be paid upon closing using Lionbridge's existing cash resources, $1.0 million of deferred cash consideration, and a $3.0 million earn-out potential payable in cash over the course of three years, subject to the attainment of certain annual revenue metrics.
The company expects the acquisition to contribute modestly to earnings in 2013 including minimal acquisition and integration costs. Experts agree that crowd-sourcing is emerging as a powerful delivery model for large enterprises.
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The addition of Virtual Solutions enables Lionbridge to address growing demand for secure, technology-enabled enterprise crowd-sourcing solutions that leverage a pre-qualified global talent pool or "private crowd" and a highly-secure technology platform to manage and complete business projects.
"We will leverage Virtual Solutions' unique skills in the area of government services and their highly secure task management platform to broaden our crowd-sourcing capabilities into new markets and new applications as we accelerate our growth in 2013 and beyond," said Rory Cowan, CEO of Lionbridge.
A study named "Enterprise crowd-sourcing: Market, Provider and Worker Trends" published by crowd-sourcing.org via its research arm Massolution revealed that enterprise crowd-sourcing continues to demonstrate aggressive and accelerating growth as crowd-sourcing models are adopted more broadly by large enterprises.
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LIOX is trading down 0.26 percent at $3.89 on Tuesday. The stock has been trading between $1.94 and $3.97 for the past 52 weeks.