Bruker Daltonics and AXS to merge. (Executive briefing: news, trends & market intelligence for instrument executives).

Billerica, MA and Madison, WI 4/7/03 -- Bruker Daltonics and Bruker AXS will merge under an agreement approved by the companies' Boards of Directors in a transaction estimated at $103.6 million on a fully diluted basis. The new company will be named Bruker Biosciences Corp. and will trade on the NASDAQ under the ticker symbol BRKR with two operating subsidiaries, Bruker Daltonics and Bruker AXS, each run by current management. Proforma 2002 revenues for the new company were $200 million, with 2003 revenues estimated at $250-260 million. Bruker Daltonics Chairman, President and CEO Frank Laukien will serve as president and CEO of Bruker Biosciences, and Martin Haase, currently president, CEO and director of Bruker AXS, will serve as senior vice president. The 10-member board of directors will be made up of members from each company's boards. The companies stated that the merger will increase distribution, sales and service infrastructure, as well as geographical distribution, and create a broader technological base and diversified customer base. In addition, it will accelerate operating profitability, enhance critical mass and enable combined product offerings. Under the merger agreement, Bruker AXS stockholders will receive either 0.63 shares of Bruker Daltonics common stock for each share, or may elect to receive 75% in Bruker Daltonics common stock and 25% in cash. The merger is expected to close during the summer.

In a conference call, the companies predicted that the merger will create more diversified earnings and revenues streams, stronger acquisition currency, and increased liquidity. Bruker AXS estimates its current installed base at 7,000 systems, while Bruker Daltonics estimates it has an installed base of close to 1,000 systems. Cost savings are estimated at $2-$4 million by 2005, with revenue synergies from cross selling and distribution estimated at $5-$10 million, as well as $2-$4 million in incremental EBITDA. No facilities will be closed, but administrative processes will be streamlined. The merger is a response to current instrument market conditions, and more likely than not, Wall Street pressures. As a larger entity, the new company could command a higher stock price and a greater ability to make acquisitions.