Keysight to acquire ESI Group

  • Keysight Technologies has announced its intention to acquire the entire share capital of ESI Group SA at a price of 155 euros per share.
  • This values the entire share capital of ESI Group at 913 million euros.
  • ESI Group is a French company specializing in virtual prototyping software solutions for the automotive and aerospace industries.

ESI Group is a editor of virtual prototyping software. Specialist in materials physics, the French company has developed know-how to enable manufacturers to replace real prototypes with virtual prototypes, enabling them to manufacture and then virtually test their future products and ensure their pre-certification. Virtual prototyping is now part of a broader approach to the Product Performance Lifecycle™, which addresses the product’s operational performance throughout its complete operating lifecycle, from launch to retirement. In particular, the creation of Hybrid Twins (Hybrid Twin™) integrating simulation, physics and data analysis makes it possible to predict their performance and anticipate their maintenance needs.

The software solutions offered by ESI Group are designed to simulate the behavior of products during the testing phases and during their actual use. Its real-time digital twin solutions enable simulations to be carried out on the basis of models and test data. These digital tools aim to optimize design, engineering and performance optimization processes. Keysight’s range of software applications is thus enriched with simulation capabilities that have become essential to a variety of industrial sectors.

Founded in 1973, ESI Group operates mainly in the automotive, ground transportation, aeronautics and heavy industry sectors. Present in over 15 countries, the French company, which employs 1,000 people worldwide, achieved sales of 130 million euros in 2022, with an adjusted EBIT margin of 11.6%, compared with 6.8% in 2021. It generates 46.6% of its sales in Europe, the Middle East and Africa, 37.3% in Asia-Pacific and 16.2% in the Americas. Its solutions are used in a variety of industrial sectors: automotive (62.1%), aerospace, defense and naval (11.4%), heavy machinery (10.7%) and energy (3.1%).

“Over the past four years, our entire team has been dedicated to transforming ESI Group into a leading player in the industrial software and simulation sectors. This merger with Keysight is testimony to the success of the work accomplished over these years, and will enable ESI to enter a new phase in its development”, said Cristel de Rouvray, Chairman and CEO of ESI Group.

“Keysight’s acquisition of ESI Group accelerates our strategy to provide software-centric solutions with virtual prototyping and advanced simulation capabilities,” said Satish Dhanasekaran, president and CEO of Keysight.

On June 28, 2023, Keysight made a binding offer to certain ESI Group shareholders to acquire a controlling block of ESI Group’s share capital and voting rights. Once the offer has been accepted, the US company will file a mandatory tender offer for the remaining outstanding shares of ESI Group. If the legal conditions are met at the end of the offer, a squeeze-out procedure will take place and ESI Group will be delisted from Euronext Paris.

Completion of the acquisition of a controlling interest in ESI is expected in the fourth quarter of calendar 2023. The tender offer is expected to take place shortly thereafter.