Keysight Technologies Announces Acquisition of ESI Group

Keysight Technologies has declared its plan to purchase the complete share capital of ESI Group SA; offering a cash price of 155 euros per share. This acquisition signifies a valuation of 913 million euros for ESI Group's entire share capital, considering a fully diluted basis. ESI Group, established in 1973, holds a prominent position as an innovative leader in virtual prototyping solutions within the automotive and aerospace industries.

ESI Group's advanced software simulates product behavior in testing and real-world scenarios. Their portfolio offers predictive simulation for complex system designs, while real-time digital twin solutions combine model-driven simulation with data-driven tests. The company's immersive industrial solutions facilitate workflow automation and virtual manufacturing, empowering efficient processes.

Amid digital transformation, industries increasingly embrace virtualized product development, shifting left in the design cycle. Computer-aided engineering enables virtual prototyping of products, manufacturing processes, and workflows, fostering innovation and efficiency.

By bringing ESI Group into its electronic design and test portfolio, Keysight will further expand its software prototyping capabilities into computer-aided engineering. It will enable customers to accelerate time to market and lower operational costs while reducing their environmental footprint. 

Satish Dhanasekaran, President and Chief Executive Officer of Keysight, said: “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.”

Cristel de Rouvray, Chief Executive Officer of ESI Group, said: “I am delighted for ESI to announce this significant milestone today with Keysight. 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 is a testament to the success of the work carried out over the years; will enable ESI to enter a new phase of its development. The core values, vision, and ambition that have driven Keysight over its long and reputable history and under its current leadership are perfectly aligned with those of ESI Group: pioneers enabling innovation for the industry. Moreover, I trust this operation is the promise of an exciting and sustainable future.”

Transaction Structure

On June 28, 2023, Keysight made a binding offer to certain shareholders of ESI Group to acquire a controlling block of the ESI Group’s share capital and voting rights.

Following the completion of the acquisition, Keysight will initiate a mandatory tender offer for the remaining outstanding shares of ESI Group. Upon meeting legal conditions, a squeeze-out procedure will be initiated, leading to the delisting of ESI Group from Euronext Paris.

Completion of the acquisition of the controlling block of ESI shares is expected to take place during the fourth quarter of calendar year 2023; with the tender offer to occur shortly thereafter.

A presentation to supplement today’s announcement can be found on Keysight’s Investor Relations website under “News, Events, Presentations”.

J.P. Morgan Securities LLC is acting as the exclusive financial advisor to Keysight with Paul Hastings LLP acting as the legal advisor.