GSI Group to Acquire Excel Technology

GSI Group Inc. and Excel Technology Inc. have entered into a definitive agreement for GSI to acquire Excel in an all-cash transaction for $32.00 per share, or approximately $360 million, before fees and transaction costs. The offer price represents a 30.2% premium to the average Excel closing share price over the last 30 trading days.

The acquisition will be effected through a cash tender offer for all outstanding shares of Excel common stock at a price of $32.00 per share, followed by a second-step merger in which any untendered shares will be acquired at the same per share price. The boards of directors of both companies have unanimously approved the transaction. The tender offer is expected to commence on or about July 23, 2008.

Subject to customary conditions and regulatory approvals, GSI expects that the transaction will close in the 3rd quarter. GSI intends to pay the aggregate purchase price through a combination of available cash and external financing.

GSI and its wholly owned subsidiary, GSI Group Corporation, have entered into definitive agreements with various investors to provide, subject to customary conditions, financing of $210 million for the transaction through the issuance of senior unsecured notes and warrants. On a non-GAAP cash basis, excluding the impact of any acquisition and purchase accounting related charges, the transaction is expected to be accretive to GSI for the full year 2009.

For the twelve months ended December 31, 2007, Excel reported revenues of $160.0 million and net income of $17.7 million. For the same period, GSI Group Inc. reported revenues of $317.8 million and net income of $19.0 million.