Mercury Acquires Echotek, Targets Defense and Commercial Signal Processing

7/14/2005 - Mercury Computer Systems, Inc. (NASDAQ: MRCY), announced it has signed an agreement to purchase Echotek Corporation for approximately $49 million, subject to certain post-closing adjustments. The purchase price will be payable in a combination of cash and shares of Mercury common stock, with such stock representing approximately 10 percent of the total purchase price. Based in Huntsville, Alabama, Echotek is a market leader in the development of data acquisition products. The purchase, which is subject to certain closing conditions, is expected to close in the third quarter of calendar 2005.

Echotek produces a market-leading portfolio of board-level products for analog-to-digital conversion (A/D), digital-to-analog conversion (D/A), high- performance input/output (I/O), and specialized digital signal processing known as digital receivers. This functionality is present in "sensor-based" computing systems for defense applications such as radar and signals intelligence. These technologies are also key components in commercial systems for medical scanners, large-scale physics experiments, and electronic test instrumentation.

"Echotek will extend our technology portfolio, and consistent with our growth strategy, enable us to address more opportunities in software radio and medical applications," said Jay Bertelli, president and chief executive officer, Mercury Computer Systems, Inc. "Defense and commercial customers are demanding increasing levels of functionality per board in order to minimize system size, weight and power, and reduce cost. One of the important ways we're meeting these demands is through the recent expansion of our RF Center of Excellence, which provides a truly collaborative environment for our engineers and customers to design and develop communications and electronics intelligence, radar, and software radio applications. With the RFCE, and the combination of Echotek and Mercury applications and systems engineering expertise, modular products and services, we will be well positioned to bring the next level of board integration to market."

Echotek has a comprehensive product line available in various form factors including PCI, VME, and PMC. Echotek also supports the RACEway and RapidIO(R) fabrics, which will ease the integration of Echotek mixed-signal modules into Mercury's computer systems.

Greater than 40 percent of Echotek's production shipments are integrated into subsystems alongside Mercury content. This is testament to Mercury's leadership in high-value digital signal processing and RF (radio frequency) subsystems. Echotek products will allow Mercury to provide a more complete solution, filling a critical architectural gap between the RF interface and the digital signal processing compute elements.

The revenue for Echotek for their fiscal year ended December 31, 2004, was approximately $16 million, and the company is profitable. The acquisition is expected to be accretive within twelve months.

"Mercury is an ideal partner to address the future needs of our customers," said Ralph Kimball, chief executive officer, Echotek Corp. "We have been working with Mercury for several years and have a mutual understanding of what we have to do to be successful. In joining forces with Mercury, we also look forward to a broader reach which will lead to new business opportunities."

A Q&A regarding the acquisition of Echotek is available on Mercury's website on the Investor Relations page at

About Mercury Computer Systems, Inc.
Mercury Computer Systems, Inc. (NASDAQ: MRCY) is the leading provider of high-performance embedded, real-time digital signal and image processing computer systems. Mercury's products play a critical role in a wide range of applications, transforming sensor data to information for analysis and interpretation. In military reconnaissance and surveillance platforms the Company's systems process real-time radar, sonar, and signals intelligence data. Mercury's systems are also used in state-of-the-art medical diagnostic imaging devices including MRI, PET, and digital X-ray, and in semiconductor imaging applications including photomask generation and wafer inspection. Mercury provides advanced 3D image processing and visualization software and optimized systems to diverse end markets including life sciences, geosciences, and simulation. The Company also provides radio frequency (RF) products for enhanced communications capabilities in military and commercial applications.

Based in Chelmsford, Massachusetts, Mercury serves customers in North America, Europe and Asia through its direct sales force and a network of subsidiaries and distributors. Visit Mercury on the web at

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