Flow signs option agreement to acquire OMAX

December 7, 2007

Flow International Corp., a developer and manufacturer of industrial waterjet machines used for cutting and cleaning applications, announced that it has signed an exclusive option agreement to negotiate the acquisition of OMAX Corp.

OMAX is a Kent, Wash.-based privately held provider of abrasive waterjet systems. Under the terms of the agreement, Flow and OMAX will work to negotiate a definitive agreement for Flow to acquire OMAX. Upon closing, Flow would pay approximately $109 million in cash and stock (including the amounts paid for the option agreement) with the potential for a contingent earn-out in two years of up to $26 million in either stock or cash at Flow's option. A transaction to combine the two companies is subject to completion of all due diligence, execution of a definitive agreement, Hart-Scott-Rodino anti-trust clearance, and customary closing conditions.

Assuming that a definitive agreement is reached and regulatory approval is received, the transaction would be expected to close in approximately six months. Upon closing, all litigation between the two companies would be settled.



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