PARIS, FRANCE: Keysight Technologies, Inc. (NYSE:KEYS) has made a binding offer to acquire a controlling stake in ESI Group SA (Euronext Paris: ESI), a global leader in virtual prototyping software and services for industries.

Keysight has offered to buy 50.6% of ESI Group’s share capital and 55.8% of its theoretical voting rights from certain shareholders of ESI Group, at a price of 155 euros per share in cash. The offer price represents a premium of 72% to the closing price of ESI Group on 17 May 2023, the last business day before ESI Group announced the existence of preliminary discussions with certain third parties.

The block acquisition, once completed, would trigger a mandatory tender offer by Keysight for the remaining shares of ESI Group at the same price, followed by a squeeze-out procedure and the delisting of ESI Group from Euronext Paris, if the legal conditions are met.

The transaction is subject to customary conditions, including regulatory approvals and the consultation of ESI Group’s works council. Keysight expects to complete the block acquisition in Q3 2023 and the tender offer in Q4 2023.

The acquisition of ESI Group would enable Keysight to expand its portfolio of software solutions for product design and testing across various industries, such as automotive, aerospace, energy and electronics. ESI Group’s virtual prototyping solutions allow customers to reduce physical testing costs, optimize product performance and accelerate time-to-market.

Alex Davern, chairman and independent director of ESI Group: “The operation we are announcing today is the culmination of a well-considered process and several years of transformation. It accurately recognizes the value of the work carried out by the leadership team and reflects the significant role ESI holds in the industrial software ecosystem. I, along with the entire Board, unanimously welcome this operation, and believe that it is in the best interest of the Company, its employees, its clients, its shareholders and all other key stakeholders.”

Cristel de Rouvray, member of the board of directors and chief executive officer of ESI Group: “I am delighted for ESI to announce this significant milestone today with Keysight Technologies. Over the past four years, our entire team has been dedicated to transforming ESI Group into a leading actor in the industrial software and simulation sectors.

This combination with Keysight Technologies is a testament to the success of the work carried out over the years, and will enable ESI to enter a new phase of its development. The core values, vision and ambition that have driven Keysight Technologies over its long and reputable history and under its current leadership are perfectly aligned with those of ESI Group: pioneers enabling innovation for industry. I trust this operation is the promise of an exciting and sustainable future.”

Satish Dhanasekaran, president and chief executive officer of Keysight: “Keysight’s acquisition of ESI Group accelerates our strategy of providing software-centric solutions with virtual prototyping and advanced simulation capabilities. Keysight and ESI Group share rich cultures of innovation and strong commitments to solving customers’ most complex challenges, which will enable value creation for all stakeholders. The Keysight team looks forward to working with the world-class talent at ESI Group to unlock opportunities and drive our combined success.”

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