ESI Group advances talks with buyout firms as strategic interest wanes

Charlie Taylor-Kroll , Arezki Yaiche and Ryan Gould
26 June 2023

Tweet
Facebook
LinkedIn
Google plus
Send to

French industrial software firm ESI Group is advancing discussions with private equity suitors amid waning interest from strategic players, according to sources familiar with the matter.

The list of prospective buyers for Euronext Paris-listed ESI has narrowed in recent weeks, with initial interest from some industry players said to have dwindled since the company confirmed receipt of non-binding proposals last month, said the sources. Dassault Systems, Siemens and Hexagon were among strategic players that were reported to be interested in ESI.

The company is now showing a renewed willingness to advance discussions with sponsors in the wake of narrowing trade interest, the sources said. Private equity firms including Francisco Partners and TA Associates are among parties exploring an offer, while EQT, which had signalled initial interest in the company last month, has since dropped its approach, two of the sources said. Hg and Thoma Bravo were also among the funds reportedly initially exploring an offer for the company.

Binding offers are expected to be collected before the European summer break, although no final decision has been made on the exact timing of a further bidding round, the sources said. ESI is running a largely unstructured process to find a buyer and there is no certainty that current deliberations will lead to a sale, the sources added.

ESI – which is working with Evercore and Rothschild to evaluate buyout proposals – confirmed last month it was engaging in initial discussions with third parties following receipt of non-binding proposals. The company is said to have attracted around 20 financial and strategic suitors in recent months.

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 Rothschild, Francisco Partners, EQT, Thoma Bravo and Hg declined to comment. ESI Group, TA Associates and Evercore did not respond to requests for comment.