Executive Briefing.

Hewlett-Packard and ONIX Process Analysis in OEM Agreement

Palo Alto, CA, 2/3/99-Hewlett-Packard signed an OEM agreement to provide its micro gas chromatograph to ONIX Process Analytics. ONIX will incorporate the GC into its Houston Atlas Model 6800 products, designed for online analysis

This is somewhat ironic, since ONIX belongs to a corporate family with substantial GC operations. But since H-P acquired MTI it has gained some unique types of GC such as this micro system. The kind of specialized system ONIX required was something that couldn't have come out of Thermo nor, in all probability, from H-P before the MTI acquisition. This alliance demonstrates the on-going movement in the industry toward process and applications outside the laboratory.

BTR and Siebe Merge

London, England, 2/7/99-BTR and Siebe have completed their previously announced merger, according to the Independent - London. Shareholders of both companies approved the merger in mid-January. The merger concluded earlier this month after a court hearing rejected shareholder complaints about the transaction on procedural grounds. BTR Siebe shares are now trading on the London Stock Exchange. BTR Siebe has a considerable share of the controls and automation market.

This illustrates the continuing consolidation in the process and control sector of the industry. The newly created company claims to be the largest maker of factory controls and automation equipment in the world.

Mettler Toledo to Acquire French Scale Maker

Greifensee, Switzerland, 2/2/99-Mettler Toledo International entered an agreement to acquire the Testut-Lutrana Group, a French manufacturer of industrial and retail scales. Testut-Lutrana has build an extensive sales and service network in France and has good brand recognition, according to Mettler Toledo officials. Testut-Lutrana has annual sales of approximately $50 million. The acquisition is subject to approval by the French Ministry of Economy and Finance and is expected to close within a few months. Terms of the transaction were not disclosed.

Since going public, Mettler Toledo has proceeded to add capabilities in both the industrial and laboratory weighing products. Several factors are driving a consolidation of the weighing products industry, including the movement in Europe toward harmonization of standards, the demand for more advanced technology, and the need for global sales and service organizations.

Thermo Vision in Two Acquisitions

Franklin, MA, 2/2/99-Thermo Vision acquired the assets of Opticon Corporation, a manufacturer of optical components for instruments. The purchase price was $2 million in cash, subject to a post-closing adjustment. Opticon has developed a proprietary optical replication technology that allows it to efficiently produce and replicate high-quality reflective optical surfaces. Opticon's 1998 revenues were approximately $2.5 million.

Franklin, MA, 2/1/99-Thermo Vision signed a letter of intent to acquire the assets of the non-telecommunications optical filter business of Corning OCA Corporation, a subsidiary of Corning Incorporated. The Corning OCA business is complementary to Thermo Vision's Corion subsidiary, which has also focused on the non-telecommunications segments of the optical filter market, selling primarily on an OEM basis. The Corning OCA business was estimated to have revenues of $7 million in 1998. The transaction is subject to the completion of Thermo Vision's due diligence investigation, negotiation and execution of definitive agreements, and approval by the boards of directors of Thermo Vision and Corning OCA Corporation.

Thermo Vision has recently been the most actively acquisitive of the Thermo operation. One reason is its willingness to make small acquisition like these two. Another reason is the highly fragmented nature of the optics sector right now, which makes many interesting technologies available for purchase.

Both these operations fit well into Thermo Vision's technology base, and can contribute to Vision's plan to be a force in photonics. The Corning operation fits better with Thermo since Coring is interested most in the telecommunications sector where it sells fiber optic products.

Yokogawa Electric in OEM Agreement with US Companies

Tokyo, Japan, 2/9/99-Yokogawa Electric has agreed to supply its confocal scanner for improving the resolution of optical-microscope images on an OEM basis to McBain Instruments of California and VayTek of Iowa. At the US companies, the scanners will be installed in microscopes to be marketed under the brand names of the US companies. Yokogawa expects to sell 20 to 50 units annually to each company.

One factor slowing the growth of confocal technology has been the high price of confocal instruments. This OEM agreement could produce more reasonably priced systems, increase competitive pressure, and generally stir things up in the confocal market. The long-term result could be very healthy for the confocal technology if this is the case.