ESI GROUP (EPA:ESI) Acquisition of MINDWARE Engineering

Transparency directive : regulatory news

12/01/2009 22:44

ESI Group
Corinne Romefort-Régnier
Shareholder relations
Tel.: +33 (0)1 53 65 14 14
investors@esi-group.com

NewCap.
Emmanuel Huynh / Axelle Vuillermet
Tel.: +33 (0)1 44 71 94 94
esi@newcap.fr

ESI Group announces the acquisition of leading US Services provider Mindware
Engineering Inc.,

Paris, 12th, January 2009: ESI Group (ISIN FR00041 10310), a pioneer and
world-leading supplier of digital simulation software for prototyping and
manufacturing processes, announced today the acquisition of Mindware Engineering
Inc. (Mindware), a leading software Services provider headquartered in the
United States.

Mindware, mostly recognized in engineering services encompassing Computational
Fluid Dynamics (CFD), is also well versed in Fluid/Structure interaction and
engineering data management. Mindware has established strong relationships with
customers from Automotive, Aerospace and Defence companies by providing digital
simulation based solutions driving product design and development. Mindware has
operations in three continents with its main activity in the United States and
support offices in the European Union and India.

Through the Mindware acquisition, ESI Group will reinforce its global offering
of end-to-end Virtual Prototyping of industrial products involving CFD
functionalities. This integration of a world class and multi-shore team will
also provide high end services for design, analysis and simulation in CFD and
Fluid / Structure Interaction at attractive prices.
This deal creates a very good opportunity for both teams to leverage their
complementary know hows to enable Simulation-Based Design in multi-physics.

Mike Salari, Founder and President of Mindware Engineering Inc. says: "We are
very pleased to join ESI Group, which has excellent software products in the
domain of fluid dynamics. It will enable us to provide broader and more
innovative services to our clients in the automotive and aerospace industries,
and to expand our know how to other promising business sectors worldwide."

Alain de Rouvray, ESI Group's Chairman and CEO, adds: "This acquisition clearly
accelerates our ability to empower Virtual Prototyping in the Simulation-Based
Design CFD market. Mindware's extensive experience in CFD engineering services
worldwide will contribute a highly competitive offer when combined with ESI's
innovative software technology in all aspects of Applied Mechanics. The good
cultural fit of our teams will also contribute to strengthen our leading
position in the fast growing world of digital simulation to provide high value
multi-domain and multi-physics solutions. This acquisition is also in line with
our US development strategy."

Financial information and terms of the operation

ESI Group has taken control of Mindware by acquiring 100% of its shares through
its American subsidiary ESI North America, Inc..

ESI Group will consolidate Mindware Engineering Inc.'s accounts from December
16th , 2008, date of the signed agreement. Sales for the American company's 2007
fiscal year to 31st December 2007 were approximately $5.6m with a double digit
operational profitability. Double digit growth and profitability are expected on
this activity for 2008, attesting to the strength and expertise of the teams
even in a difficult economic environment.

This acquisition involves an initial cash payment of US$5.6m plus an earn-out
based on the performance of this activity over the next five years. ESI Group
uses the credit line opened through the syndicated bank loan of 19 million euros
negotiated in April 2007. The operation is expected to be immediately accretive
to earnings.

Alain de Rouvray, ESI Group's Chairman and CEO, concludes: "Pursuing our
selective external growth strategy, this operation confirms ESI Group's
commitment to continuously adapt its operational organisation to the substantial
changes in the international environment. It also takes place within an economic
context that offers attractive external growth opportunities and significant
synergies. Its multi-shoring teams which are expected to integrate smoothly with
our existing local operations will furthermore enable us to improve our cost
structure and flexibility to develop our full Virtual Prototyping offer
worldwide, in the best interests of our global customers, staff and
shareholders."

About Mindware Engineering

Mindware Engineering is a provider of high end engineering services and
innovative customized software solutions to solve complex engineering problems
using knowledge based engineering. Mindware's comprehensive CFD and CAE
consulting services cover all aspects of simulation, from CAD to modelling to
analysis to design optimizations. In selected engineering areas (e.g. the
automotive industry) Mindware acts as a product development partner taking over
the responsibility for a customer-requested performance at components,
sub-systems, and systems levels. Advanced tools combined with an experienced
international engineering team allow Mindware to support its customers in
projects of any size and complexity. Mindware's 19 years of CFD and CAE
experience allows it to be the leader in engineering consulting services in a
variety of engineering industries.

About ESI Group

ESI Group is a world-leading supplier and pioneer of digital simulation software
for prototyping and manufacturing processes that take into account the physics
of materials. ESI Group has developed an extensive suite of coherent,
industry-oriented applications to realistically simulate a product's behavior
during testing, to fine-tune manufacturing processes in accordance with desired
product performance, and to evaluate the environment's impact on product
performance. ESI Group's products represent a unique collaborative and open
environment for Simulation-Based Design, enabling virtual prototypes to be
improved in a continuous and collaborative manner while eliminating the need for
physical prototypes during product development. The company employs over 700
high-level specialists worldwide covering more than 30 countries. ESI Group is
listed in compartment C of NYSE Euronext Paris. For further information, visit
www.esi-group.com.

Listed in Eurolist compartment C of NYSE Euronext Paris
ISIN FR 0004110310 - FTSE 977- Bloomberg ESI FP - Reuters ESIG.LN

ESI GROUP has been qualified as "an innovative company" since January 20th 2000
by the OSEO and is eligible for inclusion in "FCPI" (venture capital trusts
dedicated to innovation).

Next Press release announcement-Full-year Sales 2008/09 : 10 March 2009
(after market)

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