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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 14D-9
(Rule 14d-101)
Solicitation/Recommendation Statement Under Section 14(d)(4) of the
Securities Exchange Act of 1934
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EXCEL TECHNOLOGY, INC.
(Name of Subject Company)
EXCEL TECHNOLOGY, INC.
(Name of Person Filing Statement)
Common Stock, $0.001 par value per share
(Title of Class of Securities)
30067T103
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(CUSIP Number of Class of Securities)
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Alice Varisano
Chief Financial Officer
Excel Technology, Inc.
41 Research Way
East Setauket, New York 11733
(631) 784-6188
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of
Person Filing Statement)
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With a copy to:
Howard S. Breslow, Esq.
Breslow & Walker, LLP
100 Jericho Quadrangle
Jericho, New York 11753
(516) 822-6505
[X] Check the box if the filing relates solely to preliminary
communications made before the commencement
of a tender offer.
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FOR IMMEDIATE RELEASE Contact: Alice Varisano, CFO
or
Investor Relations
631-784-6175
GSI Group Signs Definitive Agreement to Acquire Excel Technology
BEDFORD, MA July 10, 2008: GSI Group Inc., (Nasdaq: GSIG) and Excel
Technology Inc. (Nasdaq: XLTC) announced today that they 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.
"This acquisition constitutes a major step in the execution of our
strategy to expand our presence in our most attractive markets," said
Dr. Sergio Edelstein, President and CEO of GSI. "GSI and Excel have a
set of uniquely complementary products, technologies, and distribution
channels, which will enable the combined company to provide customers
with a significantly broader set of solutions."
Mr. Antoine Dominic, President and Chief Executive Officer of Excel
commented; "As the industry evolves, geographical reach and breadth of
product offerings become paramount. By joining forces, GSI and Excel
will be in a very strong position to accelerate new product
introductions and global market penetration. Although Excel has
performed quite well independently over the years, this combination
rewards our shareholders, creates opportunities for employees and offers
more solutions for our customers."
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.
GSI reaffirmed that its second quarter results will be slightly above
the midpoint of the previously stated range with revenue expected
between $64.0 million and $68.0 million and earnings per share of
approximately two cents. The company expects to release its full second
quarter earnings on Thursday, July 31st, 2008.
UBS Investment Bank acted as exclusive financial advisor and placement
agent to GSI Group, Inc. in connection with the transaction. Needham &
Company, LLC provided a fairness opinion to Excel's Board of Directors.
GSI Group has scheduled a conference call for July 10th at 8:30 a.m. EDT.
Investors can access to the conference call by dialing (706) 634-5123.
A replay will be available after the call ends at (706) 645-9291,
passcode: 54069322. A live audio webcast of the call will be made
available at www.gsig.com and a replay will be available for fourteen
days after the call ends.
Note: Non-GAAP differs from GAAP presentation due to the exclusion of
the following non-cash expenses: restructuring charges, stock based
compensation (123R) expense, amortization of intangibles, amortization
of purchase accounting inventory write-up, non-cash interest expense,
amortization of financing fees, and the related tax adjustment for these
items.
About GSI Group Inc.
GSI Group Inc. supplies precision technology to the global medical,
electronics, and industrial markets and semiconductor systems. GSI
Group Inc.'s common shares are listed on Nasdaq (GSIG).
Forward Looking Information
Certain statements in, or incorporated by reference in, this press
release may constitute forward-looking statements within the meaning of
the United States Private Securities Litigation Reform Act of 1995,
Section 27A of the United States Securities Act of 1933 and Section 21E
of the United States Securities Exchange Act of 1934. These forward-
looking statements may relate to anticipated financial performance,
management's plans and objectives for future operations, business
prospects, outcome of regulatory proceedings, market conditions, tax
issues and other matters. All statements contained or incorporated by
reference in this press release that do not relate to matters of
historical fact should be considered forward-looking statements, and are
generally identified by words such as "anticipate," "believe,"
"estimate," "expect," "intend," "plan," "objective" and other similar
expressions. Investors should not place undue reliance on the forward-
looking statements contained or incorporated by reference in this press
release. Such statements are based on management's beliefs and
assumptions and on information currently available to management and are
subject to risks, uncertainties and changes in condition, significance,
value and effect. Some of the risks and uncertainties that may cause
actual results to differ materially from those contained in the
statements include the following: (a) the occurrence of any event,
change or other circumstance that could result in the tender offer not
being consummated, including the conditions to the tender offer not
being satisfied, or in the termination of the definitive merger
agreement as a result of GSI's external financing described in this
press release being unavailable due to the non-satisfaction of the
conditions contained in the definitive financing agreements or the
failure of the investors party thereto to fulfill their obligations
thereunder, or as a result of other events set forth in the merger
agreement which would entitle a party to terminate the merger agreement;
(b) the inability to complete the transaction due to the failure to
receive required regulatory or other approvals or to satisfy other
conditions to the transaction; (c) the risk that the proposed
transaction disrupts current plans and operations; (d) the risk that
anticipated synergies and opportunities as a result of the transaction
will not be realized; (e) difficulty or unanticipated expenses in
connection with integrating Excel into GSI; (f) the risk that the
acquisition does not perform as planned, including the risk that GSI
will not achieve revenue projections; (g) the inability to retain key
employees of either company and (h) changes in either company's business
between now and the completion of the tender offer and the merger.
Other risks include the fact that each of the companies' sales have been
and are expected to continue to be dependent upon customer capital
equipment expenditures, which are, in turn, affected by business cycles
in the markets served by those customers. Other factors include
volatility in the semiconductor industry, the risk of order delays and
cancellations, the risk of delays by customers in introducing their new
products and market acceptance of products incorporating subsystems
supplied by the companies, risks of currency fluctuations, risks to the
companies of delays in new products, our ability to continue to reduce
costs and capital expenditures, our ability to focus R&D investment and
integrate acquisitions, changes in applicable accounting standards, tax
regulations or other external regulatory rules and standards, and other
risks detailed in reports and documents filed by the companies with the
United States Securities and Exchange Commission and by GSI with
securities regulatory authorities in Canada. Such risks, uncertainties
and changes in condition, significance, value and effect, many of which
are beyond GSI's control, could cause the companies actual results and
other future events to differ materially from those anticipated. GSI
does not, however, assume any obligation to update these forward-looking
statements to reflect actual results, changes in assumptions or changes
in other factors affecting such forward-looking statements.
About Excel Technology
Founded in 1985, Excel and its wholly owned subsidiaries manufacture and
market photonics-based solutions, consisting of laser systems and
electro-optical components, primarily for industrial/commercial and
scientific applications.
Excel's "Safe Harbor" Statement Under the Private Securities Litigation
Reform Act
This news release contains forward-looking statements, which are based
on current expectations, including the effect of the merger on
employees, investors and customers. Actual results could differ
materially from those discussed or implied in the forward-looking
statements as a result of various factors including the risks associated
with integration of the two companies following the closing of the
transaction, future economic, competitive, regulatory, and market
conditions, future business decisions, and those factors discussed in
Excel's Form 10-K for the year ended December 31, 2007. In light of the
significant uncertainties inherent in such forward-looking statements,
readers are cautioned not to place undue reliance on these forward-
looking statements, which speak only as of the date hereof. Excel
undertakes no obligation to update these forward-looking statements as a
result of events or circumstances after the date hereof or to reflect
the occurrence of anticipated events.
Additional Information
The tender offer for outstanding common stock of Excel described in this
press release has not yet been commenced. The description contained
herein is neither an offer to purchase nor a solicitation of an offer to
sell securities of Excel. At the time the tender offer is commenced,
GSI and Purchaser intend to file a Tender Offer Statement on Schedule
TO containing an offer to purchase, forms of letters of transmittal and
other documents relating to the tender offer, and Excel intends to file
a Solicitation/Recommendation Statement on Schedule 14D-9 with respect
to the tender offer. GSI, Purchaser and Excel intend to mail these
documents to the stockholders of Excel. These documents will contain
important information about the tender offer, and stockholders of Excel
are urged to read them carefully when they become available.
Stockholders of Excel will be able to obtain a free copy of these
documents (when they become available) and other documents filed by
Excel or GSI with the SEC at the website maintained by the SEC at
www.sec.gov. In addition, stockholders will be able to obtain a free
copy of these documents (when they become available) from GSI by
contacting GSI at 125 Middlesex Turnpike, Bedford, Massachusetts 01730,
attention: Investor Relations, or from Excel by contacting Excel at 41
Research Way, East Setauket, New York 11733, attention: Investor
Relations.