Virtualware Acquires Sweden’s Simumatik to Strengthen Position in the Real-Time 3D Enterprise Software Industry

Bilbao, October 21, 2024.— Spanish-listed company Virtualware (EPA:MLVIR), a provider of cutting-edge extended reality (XR) technologies and real-time 3D enterprise solutions, has agreed to acquire Swedish corporation Simumatik AB for 1.37 million euros.

The transaction will allow Virtualware to fully integrate Simumatik’s capacities and crew, accelerating its position in the real-time 3D enterprise software industry. It is also in line with Virtualware’s 2024-2026 Strategic Plan.

The company regards this investment as essential to developing new markets in North America and the European Union once Simumatik’s decade-long technology and expertise in digital twins and emulation are fully incorporated.

As per the terms of the transaction, Virtualware will make a cash payment of around 450,000 euros in exchange for the Swedish company, plus a share payment of 110,000 shares of Virtualware at a market price of 8.40 euros.

The board has consciously decided to pursue a strategy that includes inorganic growth through strategic acquisitions that can help move the company’s growth forward.

Simumatik, founded in 2018 and headquartered in Skövde, devises digital twin emulation for industrial applications. It counts among its clients Volvo, Loramendi, Kornit Digital, and educational sector players such as Mondragon University, Ohio University, Singapore Polytechnic and HoGent. These companies are creating digital twins of critical components and entire manufacturing solutions.

“The implications of this acquisition will be substantial for Virtualware and the industry. Our offering to our clients will now include enhanced capabilities in digital twin technology, and our market standing will be intensified toward delivering valuable real-time 3D solutions. This is the right step to pivot towards after 20 years as a Virtual Reality leader,” explained Unai Extremo, CEO of Virtualware.

“By joining forces, we’re creating a unique value proposition that blends the muscle of both our corporations. The integration of Simumatik’s powers with VIROO’s immersive technology will enable us to deliver an even stronger solution to industrial and educational clients worldwide,” Mikel Ayani, founder and CEO of Simumatik, stated.

By acquiring Simumatik, Virtualware’s management expects to enhance shareholder value in the immediate future.

Virtualware has been listed on Euronext Paris since April 2023 under the ticker MLVIR.

The company’s current market capitalization exceeds 38 million euros, and its share price currently stands at 8.40 euros per share, up 40% from its initial IPO price of 6.00 euros per share. A recent report by American equity research company Litchfield Hills Research assigned it a target price of 12.00 euros per share.

The corporation recorded revenues of 2.034 million euros in the first half of 2024, a growth of 28.09% over the same period last year.

Virtualware’s EBITDA in the first half amounted to 344,539 euros, representing a 299.16% growth compared to 86,317 euros for the first half of 2023. The net profit for the first half of 2024 was 199,164 euros.

Founded in 2004 by technologists Unai Extremo and Sergio Barrera, Virtualware has worked to become one of Europe’s notable virtual reality companies. Recently, the company has shifted focus to 3D-driven enterprise software as a service.

Its flagship product, the VIROO platform, is a ready-to-run XR solution that grants companies and institutions worldwide access to immersive technology.

VIROO provides multiple ready-to-use applications for users, as well as tools for developers to create and distribute their own custom multi-user XR applications and is currently used to simulate nuclear plants, railway infrastructures, and medical facilities. VIROO ensures high levels of security and privacy, including ISO 27001 certification, scalability, and performance, integrating all XR needs into a single platform.

Virtualware’s client base includes GE Vernova, Ontario Power Generation, Gestamp, ADIF, the Spanish Ministry of Defense, Invest Windsor Essex, McMaster University, the University of El Salvador, EAN University, and the Basque Government.

The company is headquartered in Bilbao, Spain, and has offices in Toronto, Canada, and Orlando, United States.

Cuatrecasas advised Virtualware in this transaction.