Bruker BioSciences to Acquire Bruker Optics

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Bruker BioSciences Corporation has announced that it has entered into a definitive agreement to acquire all of the stock of molecular spectroscopy company Bruker Optics Inc. for $135 million, to be paid approximately 59% in cash and 41% in BRKR stock.

The acquisition agreement was signed following its unanimous approval by a Special Committee of independent directors, as well as by all independent directors of the Board of Directors of Bruker BioSciences, with the non-independent BRKR directors recusing themselves from the Board vote.

The agreement was also unanimously approved by the Board of Bruker Optics.

The combined company will have a broad range of mass spectrometry, x-ray analysis and molecular spectroscopy technology platforms to provide a unique combination of complementary systems for chemical and materials analysis, as well as for proteomics.

It will be a leading provider of instrumentation and molecular analysis solutions for pharmaceutical and biotechnology research and development, proteomics and structural biology, small molecule chemical analysis and metabolomics, clinical proteomics, molecular imaging and microorganism identification, advanced materials research and nanotechnology, pharmaceutical Process Analysis Technology (PAT) and 'pharma forensics', food, beverage, feed and agricultural analysis, advanced and raw materials research and process analysis in the semiconductor, automotive, cement, metals and various other industrial markets, as well as homeland security and defense.

Excluding one time deal fees and expenses, the acquisition is expected to be immediately accretive to Bruker BioSciences' 2006 and 2007 EPS, and will significantly improve its operating margin and cash flow profile.

Bill Linton, Chairman and CEO of Promega Corporation, commented on the transaction, "With the addition of Bruker Optics, Bruker BioSciences will considerably increase and diversify its market presence, technology base, product line, global distribution and customer support capabilities."

"The acquisition is expected to create a life science and analytical systems company with greater than $400 million of revenue in 2006, and with improved operating and net income margins."

"The Special Committee believes that this acquisition is good for Bruker BioSciences and all of its shareholders, and represents an excellent investment opportunity for a portion of the nearly $100 million in cash on our balance sheet."

Frank Laukien, President and CEO of Bruker BioSciences, stated, "Bruker Optics is a great addition to Bruker BioSciences. Over the last five years, Bruker Optics has more than doubled in revenue, while also steadily improving its margins and profitability."

"This acquisition will increase our 'critical mass' in many of the markets we serve, and it is expected to accelerate our drive to increase our margins, net income and operating cash flow. We expect this acquisition to be accretive to our GAAP EPS by $0.03-$0.05 per share in 2007."

He continued, "As part of this acquisition, Bruker BioSciences will gain access to some fast-growing new market segments and applications."

"We are particularly excited about the success and further growth prospects of Bruker Optics in pharmaceutical Process Analytical Technologies (PAT) and pharma forensics, as well as in food & beverage and feed & agricultural analysis."

"The Bruker Optics acquisition increases the size of our accessible markets by over $700 million per year."

Dan Klevisha, Vice President of Bruker Optics, added, "We are excited to become a part of Bruker BioSciences."

"The combined company will benefit from a more diversified industrial customer base in the pharma/biotech, diagnostic, food & beverage, semiconductor, advanced materials and raw materials industries, as well as among academic, medical school, homeland security and governmental customers."

"We believe that we can leverage sales and marketing synergies from the resulting three Bruker BioSciences operating companies for incremental growth in several industrial applications."

"For Bruker Optics, becoming part of a larger and public company will also allow us to explore complementary acquisitions."

Under the agreement, Bruker BioSciences will acquire all of the stock of Bruker Optics for a fixed purchase price of $135.0 million.

Approximately $79.2 million (or 58.7% of the purchase price) will be paid in cash, while the stock component, worth approximately $55.8 million (or 41.3% of the purchase price), will be paid in Bruker BioSciences stock.

The cash component of the purchase price will be funded from approximately $60 million of existing cash, and approximately $20 million from a planned revolving credit facility.

Bruker BioSciences expects to have a cash balance in excess of $40 million following the closing of the acquisition.

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