Beckman Announces Definitive Agreement to Acquire the Coulter Corporation.

FULLERTON, Calif.--(BW HealthWire)--Sept. 2, 1997--Beckman Instruments, Inc. (NYSE:BEC) announced today that it will significantly expand its presence in the diagnostics and life sciences markets by acquiring the privately held Coulter Corporation of Miami.

The combined companies will be called Beckman Coulter, Inc., which capitalizes on two of the strongest, most recognized global franchises in the diagnostics and life sciences markets.

Under the terms of a definitive agreement, Beckman will pay $875 million in cash for all outstanding Coulter shares and assume about $175 million in debt. The transaction is subject to usual closing conditions and is expected to be completed in the fourth quarter of 1997.

Beckman Coulter will recognize approximately $300 million of charges for integration and in-process research and development. Also in the fourth quarter, the company will record a purchase liability and assume approximately $100 million of pre-existing extraordinary obligations. A significant portion of the intangible assets resulting from the transaction is anticipated to be amortized over 40 years.

This acquisition will be modestly accretive to Beckman's current earnings per share plan in 1999. In subsequent years, earnings per share will accrete significantly. Beckman's anticipated 1997 fourth quarter earnings per share will be diluted by $11.00 to $12.00, including special charges of about $10.00 per share. During 1998, the first year of integration, earnings per share will be diluted $1.00 to $2.00.

Coulter was founded in 1958 by brothers Wallace and Joseph Coulter, who are the inventors and developers of the Coulter Principle, a fundamental technology for particle sizing and counting. The application of this technology to the health care field has been central to Coulter's success and number one market position, with sales in hematology of more than twice that of the next largest competitor.

Coulter is the leader in systems for blood and other cell analysis, and the company's product portfolio includes hematology systems and laboratory automation for diagnostic applications and flow cytometers for diagnostic and research use. Annual sales in 1996 were $700 million, with more than half of these generated from outside the United States.

Coulter's capabilities are an important strategic addition for Beckman, particularly in the $19 billion in vitro diagnostics market. With Coulter's hematology systems, Beckman will be able to address more than 75 percent of typical hospital laboratory test volume and essentially all of the tests that are considered routine.

In the near term, this broad-based capability will provide competitive differentiation and sales leverage with diagnostic laboratories and group purchasing organizations. In the longer term, it will allow Beckman Coulter to be an industry leader in the optimization of laboratory workflow by offering integrated testing capabilities together with automation options that can match a range of laboratory test volumes.

Coulter also brings flow cytometry to Beckman's product breadth. This technology has use in analyzing blood, bone marrow and tissue for the study of cell function and cell defects. Flow cytometry complements Beckman's bioresearch as well as diagnostics businesses and has future applications in disease-state management.

The acquisition will initially be funded with proceeds from a credit agreement to be entered into with Citibank, who will serve as arranger and administrative agent. Subsequent to the closing, Beckman Coulter expects to refinance the acquisition debt with the sale of certain financial assets and real estate and the issuance of long-term debt. Merrill Lynch, who will participate in the financing as syndication agent, advised Beckman on the acquisition and provided a fairness opinion to the Board of Directors.

Going forward, Beckman Coulter expects to generate significant cash flow that will help to quickly reduce the debt incurred in this transaction and establish an investment grade debt rating by 1999. This cash flow will result from a predictable stream of aftermarket sales which represent about 70 percent of the combined companies' revenues. The aftermarket is driven by the sale of reagents, supplies and service to laboratories operating more than 75,000 systems around the world.

Louis T. Rosso, chairman and chief executive officer, said, "The strategic benefit of this acquisition is of major significance. We are creating a $1.7 billion company with a formidable combination of technology, presence and product. Coulter is the market leader in blood cell analysis and its organization is renowned for technical innovation and customer service. At the same time, Beckman is a leader in clinical chemistry, immunochemistry and the life sciences. The combination will leverage these strong market positions and open new strategic pathways."

Focused on the chemistry of life, Beckman Instruments, Inc. automates and simplifies biological analysis with products used in clinical diagnostics and life science laboratories. Beckman's instrument systems, chemistries, software and supplies are used in all phases of the battle against disease, from pioneering medical research and drug discovery to patient blood testing. Operating on a global basis, Beckman's annual sales totaled more than $1 billion in 1996, with half of these generated outside the United States.

Coulter Corporation is the world's leading manufacturer of in vitro diagnostic systems for blood cell analysis. A wholly owned, privately held family corporation, Coulter has a reputation as a technology leader in hematology and flow cytometry, with additional businesses in scientific instruments and laboratory automation.

This release contains forward-looking statements concerning the impact of this transaction on the company's future performance, including statements regarding a negative effect on earnings per share in 1997 and 1998, and a positive effect on earnings per share thereafter.

These statements involve risks and uncertainties that could cause an impact on the company's business that differs materially from that expressed in any of these forward-looking statements, including the following: difficulties, delays or failures to effectively integrate worldwide operations and/or complete the development phase of certain products, the amount and pacing of planned synergies, world economic impact on currency and interest rates, delays in securing regulatory approvals, and changes in government medical reimbursement policies or programs.

CONFERENCE CALL

A conference call will be held on Tuesday, Sept. 2, 1997, at 10:30 a.m. E.D.T. Anyone wishing to participate should dial 212/346-6467 and ask for the Beckman conference call or reservation 3104980.

A replay of this conference call will be available on Tuesday, Sept. 2, 1997 beginning at 12:30 p.m. E.D.T., until 8 p.m. E.D.T., Thursday, Sept. 4, by dialing 800/633-8284 and entering password 3104980.

CONTACT: Beckman Instruments, Inc.

Michael J. Whelan, 714/773-7620