Hexagon Acquires NovAtel

NovAtel has a long standing partnership with Hexagon's subsidiary, Leica Geosystems, focused on the development of high-precision GNSS technologies. NovAtel has been a core supplier of these technologies to Leica Geosystems since 2002.

The combination of Hexagon and NovAtel will add new applications to the Hexagon product portfolio and give Hexagon access to technologies applicable to new high growth markets.

"The acquisition of NovAtel will enable Hexagon to accelerate the development of new applications and markets within the GNSS sector and secure an exciting, rapidly growing core business," stated Ola Rollen, CEO and President of Hexagon AB.

Under the terms of the agreement, Hexagon will commence a cash tender offer to acquire all of the issued and outstanding shares of NovAtel for US$50 per share. The offer price represents a 31 per cent premium to NovAtel's 30-day volume weighted average share price. The aggregate purchase price of the transaction is expected to be approximately US$390 million, net of NovAtel's cash balance on 30 June 2007.

In addition, pursuant to the agreement, Hexagon will acquire NovAtel shares and a debenture convertible into NovAtel shares totalling 19.9 per cent of the issued and outstanding shares of NovAtel in a private placement transaction at a purchase price of US$50 per share. Excluding the shares acquired in the tender offer and after giving effect to the shares issued and issuable to Hexagon in the private placement, Hexagon will own 16.6 per cent of NovAtel's outstanding shares.

Hexagon has advised that it has committed funds available to finance the total cash requirements under the agreement pursuant to a facility agreement with certain banks.

It is anticipated that the tender offer will be mailed to NovAtel shareholders on or about the week of October 15, 2007.

The agreement has been approved by NovAtel's Board of Directors and is fully supported by NovAtel's senior management. Completion of the transactions is expected during the fourth quarter of 2007 and is subject to customary regulatory approval, minimum tender and other conditions.