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EXHIBIT 99.1
The following news release was distributed via PR Newswire at 8:15 a.m. EST on
Friday, November 17, 2000:
MECHANICAL DYNAMICS TO ACQUIRE ESTECH CAE FIRM FROM NISSAN; WILL EXPAND PRESENCE
AND MEET STRONG DEMAND IN ASIA/PACIFIC REGION
ANN ARBOR, Mich. - Mechanical Dynamics, Inc. (Nasdaq: MDII), a worldwide
provider of functional virtual prototyping software and services, announced
today that it has reached a definitive agreement with Nissan Motor of Japan and
Structural Dynamics Research Corporation (SDRC) to acquire their joint interests
in ESTECH, a computer-aided engineering (CAE) service provider based in
Yokohama, Japan.
"This acquisition fits extremely well into our plans for expansion in the
Asia/Pacific region," said Michael E. Korybalski, chairman and CEO of Mechanical
Dynamics. "There is strong demand for our functional virtual prototyping
solutions in that part of the world, as evidenced by the strong growth we've
seen in Asia/Pacific, particularly Japan, over the past several quarters. ESTECH
has an excellent reputation, especially in the automotive industry, and this
will be of significant benefit as we deploy our Functional Digital Car solution
to auto manufacturers throughout the region."
ESTECH (Engineering Solutions & TECHnology) was founded in 1989 and has worked
with more than 100 clients in that time, including nine of the 11 Japan-based
automotive manufacturers. The company employs 43 people in six engineering
groups, with one group dedicated to the use of ADAMS(R), Mechanical Dynamics'
flagship functional virtual prototyping software.
"ESTECH is unique within the Asian region in that they use ADAMS and finite
element analysis in conjunction with testing technology to solve engineering
problems," said Raymond J. Gaynor, Mechanical Dynamics' vice president of
Asia/Pacific Operations. "The integration of functional virtual prototyping and
physical testing is a key initiative for Mechanical Dynamics, and we see strong
synergies between that goal and the expertise ESTECH has developed."
Gaynor said key initiatives ESTECH will promote with their clients include
simulation and testing in noise, vibration and harshness (NVH) and durability.
Mechanical Dynamics has been developing solutions in these two critical areas of
vehicle development, and will introduce ADAMS(R)/Vibration and
ADAMS(R)/Durability in November 2000 as part of the release of ADAMS Version
11.0. Along with ADAMS(R)/Car and ADAMS(R)/Engine, these products form the basis
of Mechanical Dynamics' Functional Digital Car(TM), a virtual prototype of a
complete vehicle for performance simulation, testing, and optimization.
Under the terms of the agreement, ESTECH will become a wholly owned subsidiary
of Mechanical Dynamics. The total purchase price, less ESTECH cash, is expected
to approximate $5.0 million, including other acquisition-related costs. Pursuant
to the agreement, the purchase price will be adjusted to reflect any change in
the net assets of ESTECH from March 31, 2000 through the closing date, which is
expected to occur within 30 days. Total revenue for ESTECH for its fiscal year
ended March 31, 2000 approximated $6.6 million. Excluding any one-time
acquisition-related charges, the transaction is expected to be neutral to
Mechanical Dynamics' fourth-quarter 2000 earnings and accretive to the company's
calendar year 2001 earnings.
Koreyuki Yamamoto, president of ESTECH, said, "We have worked with Mechanical
Dynamics throughout the years and have established an excellent relationship
with them. We've found ADAMS technology invaluable in assisting our clients with
complex engineering problems. Becoming part of Mechanical Dynamics' operation in
Asia offers ESTECH an exciting opportunity to significantly expand our
business."
ESTECH will work with Mechanical Dynamics Japan to provide total functional
virtual prototyping solutions throughout the region. Shunichi Yamauchi,
president of Mechanical Dynamics Japan, will continue to serve as Japan country
manager for Mechanical Dynamics and will oversee ESTECH operations.
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Except for historical information contained herein, some matters discussed in
this news release constitute forward-looking statements which involve risks and
uncertainties that could cause actual results to differ materially from those
projected. These include possible delays in developing, completing, or shipping
new or enhanced products, as well as other risks and uncertainties that are
detailed from time to time in reports filed by Mechanical Dynamics, Inc. with
the Securities and Exchange Commission, including Mechanical Dynamics, Inc.'s
1999 Annual Report and Form 10-K and most recent Quarterly Report on Form 10-Q.
Mechanical Dynamics pioneered the field of mechanical system simulation with its
market-leading ADAMS(R) software, and remains committed to extending the
capabilities of this technology to benefit manufacturers in every industry
worldwide. Engineering teams use ADAMS to build and test functional virtual
prototypes of their complex mechanical system designs. Along with getting to
market faster and at lower cost, the company's functional virtual prototyping
solutions provide closer integration between manufacturers and their suppliers;
increased communication among design, analysis, and engineering teams; and the
ability to manage the risks of the design process through more and better
information earlier in the cycle.
Mechanical Dynamics also offers extensive implementation services, including
consulting and training. In this way, the company partners with its customers to
help reduce the time, costs, and risks of the product development process and
meet the "Smarter to Market(TM)" challenge.
Additional information about Mechanical Dynamics can be obtained by writing to
the company at 2301 Commonwealth Boulevard, Ann Arbor, Michigan 48105. Phone:
734-994-3800. Fax: 734-994-6418. E-mail: [email protected]. Online: www.adams.com.
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Editor's advisory: ADAMS and the Mechanical Dynamics logo are registered
trademarks of Mechanical Dynamics, Inc. All other company, brand, or product
names are or may be trademarks of their respective holders.
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