Bruker Completes Acquisition of the Atomic Force Microscopy and Optical Industrial Metrology Instruments Businesses from Veeco

Bruker Completes Acquisition of

the Atomic Force Microscopy and

Optical Industrial Metrology Instruments Businesses from Veeco

BILLERICA, Mass., October 7,

2010 Bruker Corporation (NASDAQ: BRKR) today announced the closing of its

acquisition of the Atomic Force

Microscopy (AFM) and the Optical Industrial Metrology (OIM) instruments

businesses from Veeco Instruments, Inc. (NASDAQ: VECO) for $229.4 million in cash.

The industry-leading AFM

scientific instruments business headquartered in Santa Barbara, California, as

well as the OIM business based in Tucson, Arizona, along with the global

AFM/OIM field sales, applications and support organizations, have now become

part of the Bruker Nano Division, which is part of the Bruker AXS Group, adding

more than 350 employees in eleven countries.

The 2009 revenues for the

AFM and OIM instruments businesses were derived approximately 38% from

Asia-Pacific, 31% from the Americas, and 31% from Europe, and in terms of

customers approximately 45% from applied/industrial customers and 55% from

academic/government customers.

The acquired AFM and OIM businesses are highly complementary to Bruker s

existing systems and solutions, and the combined product portfolio transforms

Bruker into a global leader in materials research and nanotechnology analysis

instrumentation. In addition to the

newly acquired AFM and OIM product lines, Bruker offers a broad range of

high-performance X-Ray Diffraction (XRD), X-Ray Fluorescence (XRF), XRF

microanalysis ( XRF), vibrational spectroscopy (FTIR, NIR, Raman) and AFM

hybrid (e.g. AFM-Raman, AFM-optical microscopy) systems, as well as EDS and

EBSD analyzer accessories for third-party electron microscopes, all used for

surface analysis in materials, life-science and nanotechnology R&D and

Bruker has long been a global leader in life-science research tools with a

focused portfolio of high-performance NMR, pre-clinical MRI, EPR, life-science

mass spectrometry and X-ray crystallography instruments. In May 2010, Bruker also expanded its

mass spectrometry portfolio into the chemical analysis markets with the

acquisition of laboratory GC, GC-MS/MS and ICP-MS product lines of Varian Inc.

Laukien, President and CEO of Bruker Corporation, stated: We are very excited

about the addition of these highly regarded AFM and OIM businesses to Bruker,

as they complement our focused product and market strategies very well. With these additional high-performance and industry-leading

products, Bruker can now serve its global customers and markets even

better. Moreover, we cordially welcome

the many talented and motivated new AFM and OIM colleagues who have just joined

R. Munch, Ph.D., previously the Executive Vice President of Veeco s Metrology

and Instrumentation Business, has been appointed President of Bruker Nano, Inc.

with responsibility for the acquired AFM and OIM businesses. Dr. Munch

received his Ph.D. in Chemical Engineering from Stanford University. He has been the Veeco Executive Vice

President, Metrology and Instrumentation since February 2008. From 2006 to 2008, he was Senior Vice

President and General Manager of the Commercial Lasers and

Group of Coherent Inc. From 2004 to

2006, Dr. Munch was Chief Executive Officer and President of Cooligy

Inc. Prior to that, he held a number of executive and general

management positions at Corning Inc., Tyco Electronics Corporation, and Raychem

Dr. Munch commented: Together with Bruker, we

now have a tremendous new ability to further develop innovative products that

will evolve the industry and how we measure and obtain nanoscale

information. Bruker has been extremely

supportive from the start and is dedicated to ensuring that our current and

future customers receive the highest performing and most innovative instruments

with unsurpassed service.

Financial Outlook for Acquired

Bruker Nano AFM and OIM Businesses

Bruker expects the newly

acquired businesses to contribute approximately $20 million of revenue in the

fourth quarter of 2010. AFM and OIM

revenues in the fourth quarter of 2010 will be significantly lower than recent

quarterly averages due to the planned implementation of Bruker s revenue

recognition policy, where most systems will be recognized as revenue upon

signed customer acceptance. The

implementation of this revenue recognition policy will cause a one-time delay

in AFM and OIM revenues in the fourth quarter of 2010, and is also expected to

increase backlog at year-end compared to historical balances. Accordingly, in the fourth quarter of 2010,

Bruker expects the AFM and OIM businesses to generate a GAAP operating loss of

$6.5-$7.5 million, and a GAAP loss per share of $0.04-$0.05, primarily due to

this one-time shift in revenue recognition.

Included in these fourth quarter 2010 GAAP estimates are

acquisition-related charges of approximately $0.6 million for transitional

services provided to Bruker, approximately $1.5 million associated with the

required step-up of acquired inventory and fixed assets, as well as a non-cash

charge of approximately $1.7 million for amortization of acquisition-related

intangible assets, for a combined AFM/OIM acquisition-related charge of

approximately $3.8 million in the fourth quarter of 2010.

In 2011, the acquired Bruker

Nano AFM and OIM businesses are forecasted to contribute revenues greater than

$130 million, and adjusted operating margins (excluding acquisition-related and

non-cash intangible amortization charges) of greater than 15%. In 2011, Bruker expects to incur additional

AFM/OIM acquisition-related charges of approximately $1.0 million, and

approximately $7.0 million of non-cash charges associated with the amortization

of acquisition-related intangible assets, based on a preliminary purchase price

allocation. The overall effect is

expected to result in the new AFM and OIM businesses being approximately two to

four cents accretive to Bruker s 2011 GAAP EPS, and six to eight cents

accretive to 2011 adjusted

Use of Non-GAAP Financial

In addition to the financial

measures prepared in accordance with generally accepted accounting principles

(GAAP), we describe certain non-GAAP financial measures, including adjusted

EPS, adjusted operating income and adjusted operating margin, which exclude acquisition-related

and restructuring and other charges. We exclude the above

items because they are

outside of our normal operations and/or, in certain cases, are difficult to

forecast accurately for future periods. We believe that the use of non-GAAP

measures helps investors to gain a better understanding of our core operating