CTMI Cti Molecular Imaging - Common Stock (MM)

CTI Molecular Imaging, Inc. Announces Definitive Agreement for Acquisition of Concorde Microsystems Transaction Will Strengthen Capabilities to Serve the Medical Research Market and Drive New PET Biomarker Development KNOXVILLE, Tenn., June 20 /PRNewswire-FirstCall/ -- CTI Molecular Imaging, Inc. (NASDAQ:CTMI), a leading provider of positron emission tomography (PET) equipment, molecular imaging biomarkers and services, today announced a definitive agreement for the acquisition of Concorde Microsystems, Inc. Concorde Microsystems is the leading provider of small animal PET systems for imaging laboratory animals used in medical research. After closing, the acquisition will increase the capabilities of CTI Molecular Imaging to broadly serve the research and pharmaceutical markets, where CTI already has many existing relationships to supply research isotopes and PET expertise to several world-class pharmaceutical companies. In combination with its PETNET national network of radiopharmacies, CTI Molecular Imaging intends to leverage the acquisition of Concorde to accelerate the discovery of new molecular imaging biomarkers for the clinical market. "Concorde Microsystems has developed the premier technology for performing PET studies on laboratory animals used in basic and medical research. Concorde has the leading franchise in a market with tremendous growth opportunities. Their hardware systems are an excellent complement to the PET isotopes that we offer our research customers," said Thomas J. Hook, President of CTI Solutions and Senior Vice President of CTI Molecular Imaging. "More importantly, this is another step in CTI Molecular Imaging's evolution toward a focus on developing new molecular probes and biomarkers for the diagnostic market. We intend to augment our own internal development of these compounds through partnerships with the leading pharmaceutical research organizations in the world," continued Hook. "We want to strengthen our role as the leading supplier to the research market of important molecular imaging know-how, and the completion of this acquisition will solidify our position significantly." Concorde Microsystems has a broad customer base in medical research, with an estimated market share of greater than 80%. The National Cancer Institute's (NCI) Small Animal Imaging Resource Program (SAIRP) grants research funding with an emphasis on molecular and genomics imaging of cancer in-vivo. Of the ten research institutes participating in SAIRP, seven utilize at least one or more Concorde microPET(R) systems. "Concorde has chosen to join CTI Molecular Imaging because of its unique capabilities in molecular imaging," said Robert Nutt, President and Chief Executive Officer of Concorde Microsystems. "CTI's resources in PET technology and new biomarker development make it the best positioned company to capitalize on the promise of molecular medicine, and Concorde can help to further CTI's leadership in this endeavor." The transaction is structured as an asset purchase and is expected to close on June 30, 2004. The total consideration paid in connection with this acquisition is $41 million in cash and unregistered shares of CTI's common stock, plus the potential for incentive payments that are contingent upon the future financial performance of Concorde Microsystems. Due to the related- party nature of the acquisition, the transaction was reviewed by the Audit Committee of CTI's Board of Directors and was considered and approved only by independent board members. Piper Jaffray provided its opinion to the independent members of the Board of Directors as to the fairness, from a financial point of view, to CTI of the consideration to be paid in the transaction. Concorde Microsystems is partially owned and operated by the children of Ronald Nutt, Ph.D., the President and CEO of CTI Molecular Imaging. CTI does not anticipate a significant charge for in-process research and development expenses at Concorde. The transaction is expected to be dilutive to CTI Molecular Imaging's earnings results in the fiscal fourth quarter of 2004 by $0.01 and neutral to earnings results in fiscal 2005. About CTI Molecular Imaging: CTI Molecular Imaging, Inc. is a leading supplier of products and services for positron emission tomography (PET), a diagnostic imaging technology used in the detection and treatment of cancer, cardiac disease and neurological disorders. Additional information is available at: http://www.ctimi.com/ . About Concorde Microsystems: Concorde Microsystems is the leading supplier of microPET(R) dedicated small animal PET scanners. MicroPET(R) provides researchers in the biomedical sciences with a compact and very high performance PET system that can be used to non-invasively image a wide range of laboratory animals in a routine laboratory setting. Additional information is available at: http://www.cms-asic.com/ . Certain matters discussed in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may be identified by words such as "believe," "assume," "expect," "anticipate," "intend," "estimate" or similar expressions, and include any statements that necessarily depend on future events, such as CTI's expectations about whether and when the acquisition of Concorde Microsystems will close, the effect of any charges that will be taken in connection with the acquisition and the impact of the acquisition on CTI's financial results. Forward-looking statements involve a number of risks and uncertainties and there can be no assurance that any forward-looking statements will prove to be accurate. Various factors could cause actual results to differ materially from those anticipated in the forward-looking statements. For example, the closing of the acquisition of Concorde Microsystems is subject to a number of closing conditions, including conditions that are beyond CTI's ability to control, such as the receipt of certain consents from third parties the satisfaction of certain due diligence requirements, and the continued accuracy of certain representations, warrants and covenants made to CTI by Concorde. In addition, the impact of such acquisition on CTI's financial results will depend upon a number of uncertain events, such as the successful integration of the two businesses and CTI's ability to achieve certain anticipated efficiencies associated with combining business operations. CTI undertakes no obligation to update or revise any forward-looking statements. Further information regarding risks, uncertainties and other factors that could adversely affect CTI or cause actual results to differ materially from those anticipated in forward-looking statements are included in CTI's Annual Report on Form 10-K for the fiscal year ended September 30, 2003 and Quarterly Reports on Form 10-Q for the quarters ended December 31, 2003 and March 31, 2004. DATASOURCE: CTI Molecular Imaging, Inc. CONTACT: Michael A. Lawless of CTI Molecular Imaging, Inc., +1-865-218-2000 Web site: http://www.ctimi.com/ http://www.cms-asic.com/

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