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Excel Technology, Inc.

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Coherent, Inc.

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Filed by Coherent, Inc. Pursuant to Rule 14a-12
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Subject Company: Excel Technology, Inc.
Commission File No.: 0-19306


The following is a presentation made available in connection with a conference call by Coherent, Inc. on February 21, 2006 in connection with the Agreement and Plan of Merger dated February 20, 2006 by and among Coherent, Spider Acquisition Corporation and Excel Technology, Inc.





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Coherent, Inc. to Acquire Excel Technology, Inc.


February 2006





Safe Harbor Statement


The statements in this presentation that relate to future plans, events or performance are forward-looking statements that involve risks and uncertainties, including risks associated with uncertainties related to currency adjustments, contract cancellations, manufacturing risks, competitive factors, uncertainties pertaining to customer orders, demand for products and services, development of markets for the Company’s products and services and other risks identified in the Company’s SEC flings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Readers are encouraged to refer to the risk disclosures described in the Company’s reports on Forms 10-K, 10-Q and 8-K, as applicable




Superior Reliability & Performance






Coherent to Acquire Excel Technology for Approximately $376 Million, Exclusive of Fees and Transaction Costs


The Combination Creates a Global Leader of Laser-based Solutions for a Wide Range of Applications/End Markets





$30.00 Per Share in Cash




Form of Consideration:

100% Cash





Expected to Close in Third Fiscal Quarter Ending July 1, 2006




Closing Conditions:

Excel Technology, Inc. Shareholders’ Approval, Regulatory Approvals and Other Customary Closing Conditions




Rationale for the Transaction


                  The Combination Creates a Global Market Leader in Photonics for a Wide Range of Commercial and Scientific Applications


                  Together a Leading Provider of Materials Processing Solutions in a Market with Excellent Long-term Growth Prospects


                  Coherent Provides Enhanced Distribution and Global Reach to Excel


                  Excel Provides System Expertise in Certain Key Product Areas to Coherent


                  Combined Company has Attractive Business Model, Meaningful Revenue Growth Opportunities and Strong Cash Flow




Combined Company Well Positioned to Capture Key Industry Growth Opportunities


                  Continued Need for Finer Specifications, Improved Yields, Reduced Costs and Repeatability in Commercial Processes
–> Photonics is Displacing Conventional Technologies


                  Strategic Focus on Leading-edge Applications


                  Broadest Set of Materials Processing Solutions from Components, to Lasers, to Subsystems, and Systems


                  Next Generation Manufacturing Technologies for Displays, Packaging, Printing, etc.




A Combination of Two Industry Leaders












Long Lineage


Founded 1966


Founded 1985






Market Leadership


Microelectronics, Materials Processing, Graphic Arts/Display, OEM Components, and Scientific


Materials Processing, Scientific, OEM Components, and Laser Systems






Technology Leadership


DPSS Lasers, Ultrafast Lasers, Scanners, CO2 Lasers, Laser Systems, Color Measurement




Global Customer Base


Thousands of Customers in 80 Countries




Solid Financial Performance


FY2005 Revenues: $516.3mm
FY2005 EBITDA: $71.1mm


FY2005 Revenues: $137.7mm
FY2005 EBITDA: $22.4mm




Financially Accretive Transaction


                  Modestly Accretive on a Non-GAAP Basis in the Fourth Fiscal Quarter 2006


                  Potential to be Meaningfully Accretive for the First Full Fiscal Year Ending September 2007


                  Expected Benefits from Economies of Scale in Distribution, R&D, Administration and Supply Chain


                  Attractive Margins and Cash Flow




Overview of Excel Technology, Inc.




                  A Worldwide Leader in Laser Systems and Electro-optical Components


                  Serves the Materials Processing, Semiconductor, Biomedical, Scientific, and Other Industrial Markets


                  Founded in 1985 and Headquartered in East Setauket, New York


                  Trades on the Nasdaq Under the Ticker XLTC


FY’05 Income Statement




(LTM as of















Gross Margin


























Net Income






Revenue & EBITDA




Source:  Wall Street Research and Merrill Lynch.




Broad Competency in Laser Technology


Intellectual Property and a Critical Set of Competencies




228 Engineers, Scientists and Technicians 10% of sales spent on R&D


Advanced Broad Based Laser Technology


Optical Scanners


High Precision Beam Delivery Systems


Laser Marking Systems & Workstations


Laser Micro-Machining Systems & Workstations


Applications Engineering & Process Development


Light & Color Measurement Solutions


High Precision Optics




Additional Information and Where to Find It


In connection with the merger, Excel Technology has agreed to file a proxy statement and other relevant documents concerning the transaction with the Securities and Exchange Commission (SEC). STOCKHOLDERS OF EXCEL TECHNOLOGY ARE URGED TO READ THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors and security holders can obtain free copies of the proxy statement and other documents when they become available by contacting Investor Relations, Excel Technology, 41 Research Way, E. Setauket, New York 11733 (Telephone:  631-784-6100). In addition, documents filed with the SEC by Excel Technology will be available free of charge at the SEC’s web site at http://www.sec.gov.


Information regarding the identity of the persons who may, under SEC rules, be deemed to be participants in the solicitation of stockholders of Excel Technology in connection with the transaction, and their interests in the solicitation, will be set forth in a proxy statement that will be filed by Excel Technology with the SEC.