Newport to Acquire Spectra-Physics

IRVINE, Calif. -- Newport Corporation (Nasdaq: NEWP) today announced it has signed a definitive agreement with Thermo Electron Corporation (NYSE: TMO) to purchase Spectra-Physics for $300 million, subject to a post-closing net asset adjustment. Spectra-Physics represents substantially all of the optical technologies business of Thermo Electron. The purchase price is comprised of $200 million in cash, $50 million in Newport Corporation common stock, and a $50 million promissory note bearing 5% interest and payable in 2009. The transaction is subject to regulatory approval as well as other customary closing conditions, and is expected to close in July 2004.

"This unique combination brings together what we believe are the technology leader in lasers and the technology leader in photonics instrumentation, motion control and automation to create a photonics industry powerhouse. The combined company will become the premier global resource for customers who need to make, manage and measure light," said Robert G. Deuster, chairman and chief executive officer. "The new Newport will have an integrated technology mix that will allow us to better serve many of the world's fastest-growing markets."

The acquisition is expected to create a company with approximately $400 million in annualized sales that is immediately profitable, excluding transaction-related expenses. The company indicated that it has identified significant opportunities for product, sales and cost synergies. Deuster stated, "We expect this transaction to create many new and expanded opportunities for Newport in markets for photonics, biophotonics and nanotechnology. With a strong balance sheet and good cash generation potential, we believe that the company will be well positioned to realize the benefits of the combination."

Newport Corp.