January 28, 1999

L&H Announces Corporate Reorganization

Lernout & Hauspie (L&H), a worldwide market leader in speech and linguistic technologies, products and services, announced a corporate reorganization and the creation of new entities aimed at maximizing its potential for growth and, in particular, for new technology development. The initiatives, which include the L&H corporate restructuring, an entity focused on long-term R&D, and participation in an endeavor dedicated to high technology investment, are all aimed at maximizing L&H's participation in the growth in the speech and language technology market.

"There has been a tremendous amount of progress in speech and language technology development in a relatively short time, leading to true natural language understanding (NLU) allowing machines to not only recognize speech but to understand it. NLU also will revolutionize the way users ask for, and find, relevant information on Internet," said Gaston Bastiaens, president and CEO of Lernout & Hauspie. "L&H has always been a leader in both NLU development, as well as in many other speech and language areas. In order to expand our leadership it is imperative to increase our R&D efforts."

The L&H initiatives are as follows:

• Corporate Restructuring
  L&H will revamp its current four divisions to create three new divisions: Speech and Language Technologies and Solutions, Speech and Language Applications and Speech and Language Services. The new structure will realign resources from recent acquisitions to create a more efficient, more effective and easier-to-understand organization.
• SAIL Laboratories
  Creation of the SAIL (Speech, Artificial Intelligence and Language) Labs should enable L&H to maintain its leadership position in the long-term by supporting increased R&D investment. Although L&H will continue its internal R&D efforts, the SAIL Labs initiatives are expected to give L&H access to breakthrough long term R&D in the field of AI and language.
• Tech Farming
  The company will take a minority interest in and integrate into its corporate structure the L&H Investment Company (LHIC) announced earlier this month by L&H's founders. The founders will carry over the acquired investments, at investment cost, into the new structure and will bring in additional strategic investors as they exit completely from LHIC.

Restructuring
L&H will reorganize the corporation to create divisions that are more focused on customers and specific markets; therefore easier to understand, more flexible and more efficient. The reorganization will integrate and realign resources from acquisitions that have been made over the past few years, enabling the company to deploy those resources more effectively. L&H also announced that, in support of its strategy, it expects to increase its emphasis on research and development for dictation, telephony, consumer technology (embedded devices) and translation for the Internet.

The new company structure will integrate products with similar sales and marketing models that previously had been spread throughout different divisions. The new divisions are as follows:

• Speech and Language Technologies & Solutions
  This division will include customized corporate offerings, as well as technologies and solutions that are marketed to OEMs. Its emphasis will be on products and offerings for telephony, consumer technology, automotive, PC multimedia and machine translation.
  
  The division's offerings will also include corporate solutions and licensing activities that had previously been part of L&H's Core Technology Division, L&H Language Technology Division and the Intelligent Content Management (ICM) Group.
  
  The new division's charter will be to build a strong corporate sales structure with a concentration of large corporate accounts and strategic partnerships. To that end, all worldwide sales for OEM (Original Equipment Manufacturers) and corporate accounts will be part of the division and will be supported by newly formed regional sales support centers to provide customer training and assistance.
  
  The management team for the division will include Patrick De Schrijver, former general counsel for L&H, who will head up the new division as president and general manager. Mr. De Schrijver has been an employee of L&H for eight years and brings expertise in the field of OEM licensing, business management and intellectual property. Gerald Calabrese (formerly senior vice president and general manager for the Core Division) will serve as senior vice president for worldwide sales.
  
  
• Speech and Language Applications
  The speech and language applications division will be responsible for the development and marketing of end user and retail applications for continuous speech products in horizontal and vertical markets. It will also include Kurzweil educational software, and retail products from the former L&H language division. The company is expected to focus on a new range of speech and language and educational applications, as well as increased efforts in marketing.
  
  Anatoly Tikhman, who most recently served as president and general manager of L&H's PC Desktop Applications Group, will head up this new division as president. He will provide the new division with extensive marketing experience, particularly in direct mail and retail marketing. Mr. Tikhman was previously founder, president and CEO of TikSoft, LLC, and founder and former CEO of Vertisoft Systems.
  
  
• Speech and Language Services
  The speech and language services division will include document creation, human and machine translation services and Internet translation offerings, such as the L&H iTranslator(tm) family of multilingual solutions. It will also include linguistic tools and solutions from L&H's former language division.
  
  The former L&H Linguistic Service Division had focused primarily on large corporate projects in the field of IT, automotive, telecommunications and industrial. The introduction into the division of Internet translation services, traditionally comprised of small business customers, should create new Internet market opportunities for L&H. Florita Mendez will head up this division as president and general manager.
  
  
• Far East Operations
  In order to strengthen the company's position in the Asia Pacific market, it has appointed Dr. Louis Woo as president and general manager of L&H's Asia Pacific Operations.
  
  
• SAIL Laboratories
  The L&H SAIL Labs is expected to be comprised of up to 250 engineers, scientists and linguists in the field of speech, artificial intelligence and speech and language technology. The SAIL Labs research will focus on leading edge technologies, including the next generation of machine translation (MT), development of concept nets, expanded natural language understanding (NLU), spontaneous spoken language dialogue and a host of other research efforts. SAIL plans to have laboratories in the US, Belgium and Germany.
  
  Peer Van Driesten, formerly president of L&H's Language division will lead the entity as president and chief executive officer.
  
  An independent board of directors will oversee the SAIL Labs and a technology board will direct its programs. Mr. Jo Lernout will chair the technology board and its members will include Professor Alex Weibel, Ph.D. Dr. Weibel is affiliated with Carnegie Mellon University and the University of Karlsruhe where he leads a team of world class researchers and scientists in the field of artificial intelligence, speech and language technologies.
  
  With its structure as a separate company, the SAIL labs will aggressively pursue long term strategic R&D opportunities. The structure will give L&H the right of first refusal to license any products and technologies developed by or at the direction of the SAIL Labs. The SAIL Labs will also have the opportunity, subject to L&H's right of first refusal, to license or sell development efforts in the open market. L&H will take a minority shareholder position in the labs. A consortium of private investors, with whom negotiations are currently proceeding, is expected to provide the bulk of funding.
  
  "Major industry analysts predict that in the coming years the speech and language industry will continue its dramatic growth to become a multi billion dollar market. Growth is predicted to be especially healthy in industries such as telephony, automotive, personal computers and multi-media," said Jo Lernout, co-founder of L&H. "The SAIL Laboratories will focus on these industries as well as many of the Gartner Group's `technologies to watch ' such as speech technology, artificial intelligence, natural language technology, wearable computing, biometrics and voice over the Internet."
  
  
• LHIC
  As part of its strategy, L&H will enter into a relationship with the L&H Investment Company (LHIC); an entity focused on long-term, strategic investments in information technology companies. LHIC, announced earlier this month by L&H's founders, was originally structured as a separate company. Upon reviewing input from its shareholders and highly regarded business consultants, including McKinsey & Company, L&H opted to take minority interest in LHIC.
  
  "L&H's ownership interest in LHIC will enable it to provide an opportunity for return directly to L&H's shareholders and creates a more easily understood structure" said Pol Hauspie, co-founder of L&H. "The ownership interest also gives L&H a direct stake in yet another effort to accelerate the growth of the entire speech and language technology industry."
  
  L&H's existing and minority investments will be transferred in the coming months into LHIC, which is one of three building blocks in the global "Tech Farming" concept championed by Jo Lernout and Pol Hauspie, L&H's founders. The other tech farming building blocks include the Flanders Language Valley (FLV) Fund, a public venture capital fund dedicated to technology companies, and the FLV NPO, a non-profit organization created to support economic development and education in support of newly created companies. These entities, based in the Flanders Language Valley region of Ieper, Belgium, are all designed to accelerate global growth of the high technology industry. The founders also increased their personal donation to the FLV NPO, from 15 million to 100 million (of current share price), to assist all companies that are part of the Tech Farming group in areas such as education, training and test environments.

Back To TMCnet's Homepage