Colorado MEDtech, Inc. Announces Acquisition of Image-Guided Positioning and Stabilizing Devices From Barzell-Whitmore Maroon Bells, Inc.

Business Editors/Health & Medical Writers

BOULDER, Colo.--(BW HealthWire)--Feb. 13, 2002

Colorado MEDtech, Inc. (Nasdaq:CMED), a provider of advanced medical technology outsourcing services and medical imaging products, announced today that its CIVCO Medical Instruments subsidiary has completed the acquisition of Barzell-Whitmore Maroon Bells, Inc. ("Barzell-Whitmore").

Barzell-Whitmore is a leading designer and manufacturer of specialized positioning and stabilizing devices used in image-guided minimally invasive surgery. Consideration for the purchase consisted of 127,000 shares of Colorado MEDtech stock and $2.0 million cash at closing, plus up to an additional $2.2 million if certain performance standards are met. Annualized revenues associated with the acquisition are expected to be approximately $2.0 million.

Barzell-Whitmore's devices are currently used in the evaluation of colo-rectal disease and in the treatment of prostate cancer, with expected future applications in laparoscopic surgery and the treatment of benign prostate hyperplasia. The acquisition of the Barzell-Whitmore products will expand the portfolio of CIVCO products used to perform image-guided procedures and should enable CIVCO to provide greater support to imaging original equipment manufacturers.

"We are very excited about the growth opportunities Barzell-Whitmore brings to our business," said Stephen K. Onody, CEO and Chairman of Colorado MEDtech. "This acquisition adds an innovative product development team driven by a strong clinical focus. We expect the products to complement CIVCO's existing business and allow both companies to achieve synergies and leverage their core strengths. We believe that the Barzell-Whitmore Brachyware(TM) product line is an industry leader in brachytherapy treatment of prostate cancer. We expect the acquisition to be accretive to earnings within the first twelve months."

"By leveraging the strong manufacturing and marketing capabilities of CIVCO, we can more aggressively pursue the clinical development of our pipeline of products for laparoscopy, targeted biopsy, and other image-guided minimally invasive surgeries and focus our clinical expertise to expand research and development of new product opportunities," stated Dr. Winston E. Barzell, Director of Product Concepts, Design and Clinical Applications, Barzell-Whitmore Minimally Invasive Technologies.

Colorado MEDtech, Inc. is the full-service OneSource OutSource(TM) provider of advanced medical technology outsourcing services, including device and disposables development, software, medical device connectivity, manufacturing, system components for medical imaging and ultrasound accessories.

CIVCO Medical Instruments Co., Inc. is a global specialist in the design and manufacture of specialized medical products for imaging equipment and procedures for minimally invasive surgical equipment and procedures. CIVCO's business focuses on supplying innovative product design, development, manufacturing, distribution and support to the world's leading imaging original equipment manufacturers. Corporate information is available on CIVCO's website at www.civco.com.

Barzell-Whitmore is a leader in innovative urology product development and other minimally invasive technologies, with a unique mix of clinical knowledge in medicine and engineering. Barzell-Whitmore designs, manufactures and markets practical products that facilitate timely, high-quality procedures with a focus on cost-containment and customer satisfaction. Information is available on Barzell-Whitmore, Minimally Invasive Technology's website at www.civco.com.

Forward-Looking Statements 

The statements in this news release and in the conference call that are not historical facts are forward-looking statements that represent management's beliefs and assumptions based on currently available information. Forward-looking statements can be identified by the use of words such as "expect," "believes," "intends," "estimates," "may," "will," "should," "anticipated," "expected" or comparable terminology or by discussions of strategy. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it cannot assure that these expectations will prove to be correct. Such statements involve risks and uncertainties, including, but not limited to, the risk that the Barzell-Whitmore revenue will be less than expected, the risk that future applications of Barzell-Whitmore technology do not yield successful products, the risk that the acquisition will not yield synergies or allow the companies to leverage their core strengths, the risk that the Company's existing level of orders may not be indicative of the level or trend of future orders, the risk that the Company may not successfully complete the work encompassed by current or future orders, the risk that unforeseen technical or production difficulties may adversely impact project timing and financial performance, the risk of an adverse result in pending or potential litigation, the risks associated with regulation by the Federal Food and Drug Administration including compliance with the Quality System Regulation, the risk that acquired companies cannot be successfully integrated with the Company's existing operations and the risk that a downturn in general economic conditions or customer budgets may adversely affect research and development and capital expenditure budgets of potential customers upon which the Company is dependent. Should one or more of these risks materialize (or the consequences of such a development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those forecasted or expected. These factors are more fully described in the Company's documents filed from time to time with the Securities and Exchange Commission. The Company disclaims any intention or obligation to update publicly or revise such statements whether as a result of new information, future events or otherwise.