ESI Group draws EQT, Hg, Thoma Bravo interest

Charlie Taylor-Kroll , Arezki Yaiche and Ryan Gould
22 May 2023

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ESI Group, the French industrial software maker that said it is in talks with suitors, has attracted interest from buyout groups including EQT, Hg and Thoma Bravo, according to sources familiar with the matter.

This is in addition to interest from Francisco Partners, TA Associates and ESI rival Dassault Systems, which were reported by Bloomberg to be among parties exploring a bid, the sources said.

Euronext Paris-listed ESI has also attracted interest from German industrial conglomerate Siemens and Swedish-headquartered Hexagon, according to one of the sources.

ESI, which confirmed on 18 May its engagement in preliminary discussions with third parties following receipt of non-binding proposals, has entertained interest from around 20 financial and strategic suitors in recent months, one of the sources said. The company is working with Evercore and Rothschild to evaluate buyout proposals, according to the sources.

Deliberations among possible acquirers remains at an early stage and the appetite of some suitors has cooled after the news of takeover interest saw ESI shares rally as much as 15%, according to one of the sources. ESI shares have since pared down some of those gains and was trading at EUR 103 per share in Paris on Friday afternoon (19 May) for a market value of around EUR 625m (USD 674m).

Some prospective buyers have also raised concerns over the company's ability to maintain its top line growth, two of the sources said, although one of them added that several of its business units have strong growth prospects.

Buyout interest in the company comes amid a receptiveness by the group's CEO Cristel de Rouvray to entertain a possible deal for the software maker, according to one of the sources. De Rouvray succeeded her father and founder of ESI, Alain de Rouvray, in February 2019. The de Rouvray family owns around a 25% stake in the company.

ESI provides industrial software solutions for the automotive, land transportation, aerospace, defense and naval and heavy industries. Founded 1973, it operates in around 18 countries, employs 1000 people around the world, and reported 2022 sales of around EUR 130m, with an adjusted EBIT of EUR 15m.

Representatives for ESI, Rothschild, Siemens, Hg, EQT and Thoma Bravo declined to comment. Hexagon, Dassault and Evercore did not respond to requests for comment.