Consolidated Oberg Industries Ltd. and Modoc Engineering Corp. agree to merger.

SUNNYVALE, Calif.--(BUSINESS WIRE)--Nov. 7, 1994--Consolidated Oberg Industries Ltd. (VSE:KBI) Monday announced that it has come to an agreement in principle to acquire Modoc Engineering Corp. for 1,651,500 shares of Oberg stock priced at $.72 (Cdn) per share.

Based in Santa Clara, Calif., Modoc is a privately held engineering and distribution company which has projected 1994 revenues of $2.5 million (USD).

The merger is subject to due diligence activities, approval by the respective boards of directors, and approval by the Vancouver Stock Exchange. The transaction is expected to be completed within 60 days.

"The merger with Modoc increases our product offerings and contributes important revenue to our growing company. We are quickly becoming an integrated leader in the ultrapure, capital equipment marketplace," said Jerald L. Zavalney, president and chief executive officer of Consolidated Oberg.

Founded in 1971, Modoc is a stocking distributor of exotic fluids for vacuum and diffusion pumps used in semiconductor manufacturing. Modoc is also the exclusive distributor of Clearifier Filtration Systems. These systems purify and clean pump fluids and oils thereby significantly extending the life cycle and efficiency of the fluid, as well as the processing equipment.

The unique design of these systems also provides critical in situ data on the pump lubricants and eliminates exposure to hazardous materials during routine maintenance of the pumping systems.

Roger Goyins will remain as president of Modoc Engineering reporting to Zavalney. The company will relocate to San Jose, Calif., when Oberg and its wholly owned subsidiary, Hytec Flow Systems, move into their planned new ultraclean manufacturing facility in the first quarter of 1995.

Headquartered in Sunnyvale, Calif., Oberg stock is traded on the Vancouver Stock Exchange under the symbol KBI.

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Note to Editors: Hytec Flow Systems Inc., founded in 1986, incorporated in California in July 1993 and completed a reverse take-over of Consolidated Oberg Industries Ltd. in February 1994. Consolidated Oberg resumed trading on the Vancouver Stock Exchange in March 1994.

Consolidated Oberg, through its operating subsidiary Hytec Flow Systems Inc., manufactures ultrapure, patented, high temperature pumps and filtration systems providing safe and reliable solutions to fluid transfer applications in high technology industries. The company's products, custom designed to transport corrosive liquids with high purity and low contamination, operate in ultraclean manufacturing environments where fluid temperatures range from 20 degrees C to 180 degrees C.

The worldwide equipment market for Hytec's and Modoc's ultrapure, high technology content products is forecasted to grow significantly through 1998. (Source: Dataquest, D&B Reports).

Consolidated Oberg's announced growth strategy has been to improve revenues and operating results through market penetration and new product introductions facilitated through strategic alliances and selective acquisitions.

CONTACT: Hytec Flow Systems

Mary Ann Galindo, 408/541-8418