DALSA Corporation to Acquire Coreco Inc.

WATERLOO, Ontario & MONTREAL -- DALSA Corporation (TSX:DSA) and Coreco Inc. (TSX:CRC) today announced that they have entered into an arrangement agreement, pursuant to which DALSA will acquire all of the issued and outstanding shares of Coreco, subject to certain conditions, including regulatory approvals. The transaction will be completed by way of plan of arrangement. The arrangement has the unanimous support of the board of directors of each of DALSA and Coreco.

The transaction, which combines Coreco's industry leading vision processors, software, and smart camera technology with DALSA's high performance image sensor chips and digital cameras, will create a company that is well positioned to lead the convergence of technologies in the high performance digital imaging and machine vision marketplace.

Pursuant to the arrangement, shareholders of Coreco will receive for each common share of Coreco, at their election (and subject to pro-ration) either:

(a) 0.5207 of a DALSA common share;

(b) $10.00 in cash; or

(c) a combination of cash and DALSA common shares,

subject to a maximum of $35 million in cash available for election. The total consideration paid by DALSA for Coreco is approximately $72 million. The purchase price of $10.00 per Coreco share represents a 57.5% premium to the 90 day average trading price  of the common shares of Coreco.

An information circular detailing the arrangement is anticipated to be mailed to shareholders of Coreco in late March with a shareholder meeting to be held in late April. The arrangement will require the approval of 66 2/3% of the votes cast by Coreco shareholders at the Coreco shareholder meeting, as well as the approval of the Superior Court of Quebec and other regulatory agencies. Keith Reuben, President and CEO of Coreco; Robert Mee, Chairman of the Board of Coreco; and Daniel Crevier, founder of Coreco, who together hold approximately 11% of the outstanding Coreco common shares, have executed agreements pursuant to which they have agreed to vote their shares in favour of the arrangement.

The board of directors of Coreco formed a special committee consisting of three independent directors, Robert Mee, Daniel Crevier and Jacques Lefebvre, to make a recommendation to the board on the transaction. The special committee retained RBC Capital Markets to act as its financial advisor. RBC Capital Markets has provided an opinion to the special committee that the consideration offered pursuant to the arrangement is fair, from a financial point of view, to the Coreco shareholders. The special committee unanimously recommended that Coreco's board of directors approve the arrangement and recommend to shareholders that they vote in favour of the arrangement. The board of directors of Coreco has unanimously determined that the arrangement is in the best of interests of Coreco and its shareholders and unanimously recommends that shareholders accept and vote in favour of the proposed arrangement.

The transaction is expected to close in late April and be accretive to earnings to DALSA in 2005. CIBC World Markets Inc. acted as financial advisor to DALSA for the transaction.

"Today's agreement combines two Canadian companies with excellent fundamentals, solid management and strong technology," commented Savvas Chamberlain, CEO of DALSA Corporation. "I am particularly excited about the opportunity for the 'new DALSA' to take a leadership role in the convergence of technologies that is rapidly occurring in our industry. By combining Coreco's vision processing and software expertise with DALSA's CCD and CMOS image sensor  technology we have the unique opportunity to develop innovative and high-value products that will allow us to compete even more successfully worldwide. Furthermore, I am pleased that our corporate cultures are so similar. This will accelerate integration, while minimizing disruption of both companies' existing businesses."

"This agreement fulfills Coreco's long-stated strategy of gaining access to sensor technology and furthering our capabilities for smart cameras," added Keith Reuben, President & CEO, Coreco Inc. "In the short-term, both companies will benefit from matching Coreco's products with DALSA's image sensor and camera technology to address specific needs in flat panel display inspection, an expanding end market in which both companies are particularly strong. Longer-term, the opportunities to collaborate are equally significant and will enhance the overall competitiveness of the combined business." Mr. Reuben will join DALSA as President of "DALSA Coreco", reporting to Savvas Chamberlain, CEO of DALSA Corporation.

Investor Conference Call and Webcast

A conference call and webcast with presentation slides will be held Thursday, February 17, at 8:30 am ET. The webcast presentation will be broadcast live and open to anyone. It can be accessed at http://events.onlinebroadcasting.com/dalsa/021705/index.php. The phone numbers for those who wish to participate in the question and answer period following the presentation are as follows:

Live Conference Access information:

Local Access: 416-695-9707

Toll-Free Access: 1-888-334-9269

About DALSA Corporation

DALSA is an international high performance semiconductor and electronics company that designs, develops, manufactures, and markets digital imaging products and solutions, in addition to providing semiconductor products and services. DALSA's core competencies are in specialized integrated circuit and electronics technology, and highly engineered semiconductor wafer processing. Products and services include image sensor components; electronic digital cameras; and semiconductor wafer foundry services for use in MEMS, high-voltage semiconductors, image sensors and mixed-signal CMOS chips.

DALSA is a public company listed on the Toronto Stock Exchange under the symbol "DSA". Based in Waterloo, ON, Canada, the company has operations in Bromont, PQ; Colorado Springs, CO; Woodland Hills, CA; Eindhoven, NL; Munich, Germany and Tokyo, Japan.

About Coreco Inc

Coreco Inc. is a leader in the design, development, manufacturing and marketing of hardware and software that help enhance the productivity, quality and cost-competitiveness of manufacturing processes. The Company serves two target markets: Original Equipment Manufacturers (OEMs) and End-users. The OEM group provides a full range of frame grabbers, embedded products and accompanying software for integration in high-performance machine vision applications in the industrial vision, medical imaging, multimedia and surveillance markets. The Intelligent Products group (IPD) provides user-friendly, cost-effective vision appliances for task-specific factory floor applications, such as gauging, high-precision alignment, inspection, assembly verification and machine guidance. Coreco employs a staff of 145 people and has operations in Montreal (QC), Vancouver (BC), and Billerica near Boston (MA), with additional sales offices in Cleveland (OH), San Juan Capistrano (CA) and Tokyo, Japan.

This press release contains forward looking statements based on assumptions, uncertainties and management's best estimates of future events. Actual results may differ materially from those currently anticipated. Investors are cautioned that such forward-looking statements involve risks and uncertainties. Important factors that could cause actual results to differ materially from those expressed or implied by such forward looking statements are detailed from time to time in each periodic reports filed with the Ontario Securities Commission and other regulatory authorities. Neither company has the intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

DALSA Corporation (TSX:DSA)