Coherent's Medical Group, ESC Medical to Combine

SANTA CLARA, Calif., Feb. 28 -- Coherent Inc. has signed a definitive agreement with ESC Medical Systems Ltd. to sell its medical products division, Coherent Medical Group (CMG), for approximately $203 million, based on ESC's closing stock price on February 23, 2001, plus an earnout of up to $25 million. Following closing of the transaction, ESC plans on changing its name to Lumenis.
In consideration for the sale, Coherent will receive $100 million in cash, 5.4 million shares of ESC common stock (representing approximately 16.5 percent of the ESC shares outstanding following the transaction), $12.9 million in an 18-month, 5 percent subordinated promissory note and an additional $25 million based on future performance. Bernard Couillaud, Coherent's president and CEO will be appointed to ESC's board of directors. In addition, following the closing, Coherent will continue to supply parts and components and provide, on a transitional basis, on-going operational support.