Thermo Electron Agrees to Sell Spectra-Physics to Newport

Waltham, MA and Irvine, CA —Thermo Electron has entered into a definitive

agreement to sell Spectra-Physics, its Optical Technologies Segment, to laser company

Newport Corporation for $300 million, consisting of $200 million in cash,

50 million in Newport common stock and a $50 million promissory note. Spectra-

Physics’ products include lasers, diffraction gratings, light sources and interference

filters. Thermo will retain the business that makes digital cameras used by its

Scientific Instruments Division. “While we have been pleased with Spectra-Physics’

recent performance, there are significant differences between its long-term strategic

direction and that of Thermo,” said Thermo Electron President and CEO

Marijn E. Dekkers. In 2003, Spectra-Physics sales were $212 million and accounted

for 10% of Thermo revenue. Thermo lowered its 2004 earnings per share guidance

by $0.07 due to the divestiture, but raised it by $0.04 due to “strong results year-today

and increasing confidence” in its other two businesess. The acquisition is

expected to close in July. Robert J. Phillippy, general manager of Newport’s US

operations for the Industial and Scientific Technlogies Division, will become president

and COO. Guy Broadbent, president of Spectra-Physics, will remain at Thermo.

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