(News Bulletin 247) – The company said it was exchanging with third parties after receiving non-binding takeover proposals.

Listed on the stock exchange since July 2000, will ESI Group leave the Paris market? The software company offering virtual prototyping solutions could in any case change ownership.

Bloomberg had, on Wednesday evening, lit the fuse by reporting that the company was working with advisers to examine a potential sale. The American press agency cited, among the interested candidates, private equity funds, but also the French tenor of computer-aided design and manufacturing (CAD/CAM) Dassault Systèmes. Contacted, a spokesperson for the French group resident in the CAC 40 was not immediately available to comment.

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Stock jump

Following this press information, ESI published a press release, confirming discussions.

“In the context of recent rumors in the press, ESI Group indicates that it is currently in preliminary discussions with certain third parties following the receipt of non-binding proposals relating to a potential acquisition of the company,” the company said, adding that there is no “certainty at this stage” that these discussions will lead to a transaction or an agreement.

“ESI Group will communicate on any potential significant development in a timely manner and in accordance with regulatory requirements,” the company adds.

On the Paris Stock Exchange, the ESI Group share logically took off, benefiting from speculation on a potential takeover, which would be synonymous with a bonus for the company’s shareholders. The action was awarded 11.7% on Wednesday and took another 6.5% this Thursday around 10:20 a.m., bringing the market capitalization of the company to 650 million euros.

Growth acceleration

Founded in 1973, ESI Group employs approximately 1,000 people worldwide. Last year, the company generated revenues of 130 million euros, up 2.1% excluding currency effects, while its operating margin was 17.5%.

However, the company’s growth momentum picked up in the first quarter, with growth of 7.2% at constant exchange rates, thanks to a 10.1% increase in its licenses. For TP ICAP Midcap, the company has begun to see “the first fruits of a major overhaul” with a refocusing on its core business which should allow it to accelerate its growth.

In the fall of 2021, ESI presented a strategic plan implementing this refocusing called “OneESI 2024 – Focus to Grow” and which, as its name suggests, sets the course for growth. In September 2022, the company held a day dedicated to investors, setting out its multi-year outlook, namely revenue growth of between 5% and 7% in 2023, 6% and 9% in 2024, and 7% and 10% in 2025. The operating margin must gradually rise to reach more than 20% in 2025.