ESI GROUP EXPANDS ITS RELATIONSHIP WITH VIBRO-ACOUSTIC SCIENCES BY ACQUIRING A CONTROLLING STAKE IN THE COMPANY

Acquisition of AutoSEA noise and vibration simulation software strengthens ESI Group's leadership in virtual acoustic prototyping

Paris, September 18, 2002; ESI Group (Euroclear 6584, Bloomberg ESI FP, Reuters ESIG.LN), a leading provider of virtual prototyping and manufacturing solutions, announces the acquisition of a controlling stake in Vibro-Acoustic Sciences (VASci), a US-based company and world leader in digital simulation software for high-frequency noise and vibration engineering.

This transaction expands ESI Group's strategic relationship with VASci by giving it direct and indirect control of VASci via an American holding company. The deal gives ESI Group 74% of VASci's capital and 49 % of its voting rights for a total of $3 m. The remainder of the voting rights is held by VASci management and private American investors.

The holding company will be set up to oversee and coordinate all of ESI Group's US operations, and will focus on developing technical and commercial synergies and accelerating research and development partnerships.

Alain de Rouvray, ESI Group CEO, stated : "As part of our selective acquisitions strategy, we are very pleased to welcome Vibro-Acoustic Sciences into our group. The company's excellent technological reputation and its leading software package AutoSEA should considerably strengthen our market presence in the US, by substantially increasing our client base and client support resources. "

In its last fiscal year, ended June 30, 2002, VASci net sales totaled $4.7m. 59% of this total came from the USA, 20% from Europe and 21% from Asia and the rest of the world. ESI Group will consolidate VASci' sales from third quarter FY02. This will significantly increase the US proportion of ESI Group's sales, in line with its business strategy.

The acquisition also enables ESI Group to diversify its business outside of the automotive sector, where it currently does most of its US business, and to move into other sectors such as aerospace and defense.

After making major, self-financed R&D investments over the last few years, VASci has succeeded in remaining close to breakeven at the operating level. The pooling of ESI Group and VASci's resources - particularly as regards distribution and management - will result in increased efficiency in fiscal 2003.

VASci' AutoSEA software enables users to simulate vibro-acoustic phenomena and predict design performances. Its main markets are the aerospace, rail and automotive industries. AutoSEA allows users to model the acoustic and vibration behavior of complex structures, such as vehicle body-in-white. With AutoSEA, noise and vibration engineering becomes part of the design process performed on the virtual prototype, instead of waiting for a physical prototype.

Beyond ensuring AutoSEA's long-term future this acquisition offers great potential for new product synergies with the Rayon software line, created by Straco, a company acquired last year by ESI Group which will further enable it to become a major player in vibro-acoustic simulation.

Alain de Rouvray concluded as follows: "Combining VASci and ESI Group's technologies and resources will enable us to offer a global solution for noise simulation and acoustic comfort to a wider client base in a new market with strong growth potential. Synergies in product development, marketing and administration should make the deal accretive as of 2003."

ESI Group 

Publisher of virtual testing software solutions, ESI Group is a pioneer and world-leading provider of digital simulation solutions for prototyping and manufacturing processes that take into account materials physics. ESI Group has developed an entire package of coherent, industry-specific software applications to realistically simulate product behavior during testing, to fine-tune manufacturing processes in synergy with the desired product performance, and to evaluate the environmental impact on product usage. ESI Group's product portfolio, which has been industrially validated and combined in multi-trade value chains, represents a unique, collaborative, virtual engineering solution, known as the Virtual Try-Out Space (VTOS), which contributes to continuous and collaborative improvements on the virtual prototype. By drastically reducing costs and development lead times, the VTOS solutions offer major competitive advantages by progressively eliminating the need for physical prototypes. Listed on the Euronext Nouveau March� in Paris, ESI Group reported sales of nearly euros 43 m for 2001. The company employs over 300 highly qualified specialists through its worldwide network that covers over 30 countries. 

www.esi-group.com.

VASci 

VIBRO-ACOUSTIC SCIENCES develops high added value digital simulation software, used during a product's virtual design phase for high-frequency noises and vibrations modeling. VASci forecasts sales of $5 m in 2002 and had a headcount of 30 as of June 30, 2002. 

www.vasci.com

 

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