Coherent Buys Excel Technology

SANTA CLARA, Calif., Feb. 21, 2006 -- Laser maker Coherent Inc. announced today that it is acquiring East Setauket, N.Y.-based Excel Technology Inc., a manufacturer of laser systems and electro-optical components for industrial, commercial and scientific applications, in a deal worth approximately $376 million.

According to a statement released by Coherent, the acquisition will be an all-cash transaction at a price of $30 per share of Excel Technology common stock, for a total approximate offer value of $376 million before fees and transaction costs. Coherent says it intends to pay for the acquisition through a combination of cash on hand and external financing. The transaction has been unanimously approved by the boards of directors of both companies and is subject to customary closing conditions, including regulatory approval and the approval of Excel Technology's stockholders. The transaction is expected to close by the end of the second quarter of 2006.

“Over the last several months, we have been highlighting the long-term growth potential of the materials processing market as well as the need for consolidation in the photonics industry,” said John Ambroseo, president and CEO of Coherent. “The acquisition of Excel Technology addresses both points. The combined product portfolio provides the broadest set of materials processing solutions from components, to lasers, to subsystems and systems. In addition, we will be able to offer the most comprehensive application and process development capabilities in the industry."

Excel Technology President and CEO Antoine Dominic said, “The continuing evolution of the photonics industry favors companies that can drive rapid product and application development while improving their own fundamentals. While Excel Technology has done this well over recent years, by joining forces with a laser industry leader like Coherent, market penetration and adoption can be accelerated. This is especially true since we have a similar vision for the materials processing market.”

For the 12 months ended Dec. 31, 2005, Excel Technology had revenues of $137.7 million and net income of $15.2 million. Orders during that same time period exceeded $144 million and backlog at the end of Excel’s fourth quarter was $33 million. On Dec. 31, Excel Technology had $50.3 million in cash and investments and no debt.

For more information, visit: www.coherent.com