Mirus Capital AdvisorsMirus Capital Advisors

Electro Scientific Industries, Inc. to acquire XRL, Inc.

XRL-ESI

PORTLAND, Ore.- June 15, 1995 – Today Electro Scientific Industries, Inc. (NASDAQ:ESIO) announced the signing of a definitive agreement to acquire XRL, Inc., a privately held company based in Canton, Massachusetts. The closure of the transaction is subject to the completion of due diligence and certain closing conditions and board and shareholder approvals. Mirus Capital Advisors represented the investors and management of XRL Inc. on the deal, which should be completed in July of this year.

XRL, formed in 1984, received several rounds of venture capital financing through 1990. The company has substantial expertise in the use of lasers to improve the yield of semiconductor memory devices, notably Dynamic Random Access Memories (DRAMs). They also have significant expertise in other technologies related to laser based products. XRL’s customers include prominent multi-national electronic manufacturers in the US, Japan, Korea, Taiwan, and Europe. For the year ended December 31, 1994, XRL sales were $6 million.

In announcing the proposed transaction, Donald R. VanLuvanee, President and CEO of ESI, said, “With its combination of engineering capabilities, products, distribution, and customer base, XRL is an excellent addition to ESI. XRL matches nicely with our objective to expand ESI’s business in areas where our strengths represent a competitive advantage in providing value to customers. Customers of XRL and ESI will receive full support for products manufactured by both organizations.”

The acquisition will be accounted for as a purchase transaction. The consideration will consist of $8 million, primarily paid in ESI stock. The specific number of shares will be based upon the current share price near the closing. The issued shares will be restricted, subject to registration in December 1995. In conjunction with the acquisition, ESI expects to record a substantial one-time acquired research and development charge against earnings in the first quarter of fiscal 1996, ending August 31, 1995.

ESI, headquartered in Portland, Oregon, designs and manufactures sophisticated products used around the world in electronics production including: Laser manufacturing systems for semiconductor yield improvement; laser trim systems for precise electrical tuning of circuits for the thick-film microelectronics and surface mount technology industries; precision laser machining systems; and machine vision systems. The Palomar Systems, Inc. subsidiary of ESI, based in Escondido, California, designs and builds production and test equipment for the manufacture of ceramic capacitors.

About Mirus Capital Advisors

Mirus Capital Advisors provides investment banking solutions to corporate clients in the areas of software, online media, business services and niche manufacturing. Founded in 1987, Mirus provides corporate finance advisory services on engagements including mergers, acquisitions, divestitures, recapitalizations and valuations. Additional information about the firm is available at www.merger.com.

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