ASSUMPTION, Ill., June 29 /PRNewswire/ -- The GSI Group, Inc. (the
"Company") today announced that it has commenced a cash tender offer to
repurchase all of its outstanding 12% Senior Notes due 2013 (CUSIP No.
36229NAD0) (the "Notes"). In connection with the tender offer, the Company
is soliciting consents to amend the indenture governing the Notes in order
to eliminate substantially all of the restrictive covenants, eliminate
certain events of default, modify covenants regarding mergers and
consolidations, and modify or eliminate certain other provisions, including
certain provisions relating to defeasance. The tender offer and related
consent solicitation are being made in connection with the previously
announced merger of the Company's parent, GSI Holdings Corp., with an
affiliate of Centerbridge Capital Partners, L.P. (the "Merger"). The tender
offer and consent solicitation are being made upon the terms and conditions
set forth in the Offer to Purchase and Consent Solicitation Statement dated
June 29, 2007 (the "Offer to Purchase") and the related Consent and Letter
of Transmittal.
    The tender offer will expire at midnight, New York City time, on August
13, 2007, unless extended or earlier terminated by the Company. The consent
solicitation will expire at 5:00 p.m., New York City time, on July 13,
2007, unless extended or earlier terminated (the "Consent Payment
Deadline"). Tendered Notes may not be withdrawn and consents may not be
revoked after the Consent Payment Deadline.
    As described in more detail in the Offer to Purchase, the total
consideration for each $1,000 principal amount of the Notes validly
tendered and not validly withdrawn pursuant to the tender offer will be a
price equal to the sum of the present value on the initial payment date of
$1,060.00, which is the redemption price for the Notes, on May 15, 2009,
the first redemption date, plus the present value on the initial payment
date of any interest that would accrue with respect to each $1,000
principal amount of such Notes from the most recent interest payment date
to, but not including May 15, 2009, less accrued but unpaid interest from
the last interest payment date to, but not including, the initial payment
date. The present value of the Notes will be determined on the basis of a
yield to May 15, 2009 equal to the sum of (x) the yield to maturity on the
5.50% U.S. Treasury Note due May 15, 2009, as calculated by UBS Securities
LLC (the "Dealer Manager"), in accordance with standard market practice,
based on the bid price for such Reference Securities as of 11:00 a.m., New
York City time, on the price determination date as displayed on "Page PX4"
of the Bloomberg Government Pricing Monitor or any recognized quotation
source selected by the Dealer Manager in its sole discretion if the
Bloomberg Government Pricing Monitor is not available or is manifestly
erroneous and (y) a spread of 50 basis points. The total consideration for
the Notes described above includes a consent payment equal to $20.00 per
$1,000 principal amount of tendered Notes. Holders must validly tender
their Notes on or before the Consent Payment Deadline in order to be
eligible to receive the total consideration, including the consent payment.
Holders who validly tender their Notes after the Consent Payment Deadline
and before the tender offer expiration date will only be eligible to
receive an amount equal to the total consideration minus the consent
payment. Holders of Notes that are accepted for payment by the Company will
also receive accrued and unpaid interest up to, but not including, the
applicable payment date for such Notes.
    The Company expects to pay for Notes that have been validly tendered
and not validly withdrawn prior to the Consent Payment Deadline and that
are accepted for payment, promptly following the date on which all
conditions to the tender offer have been satisfied or waived. This initial
payment date is expected to occur on August 1, 2007, assuming all
conditions to the offer have been satisfied or waived. The price
determination date is expected to occur on the business day preceding the
initial payment date. For Notes that have been validly tendered after the
Consent Payment Deadline and that are accepted for payment, the Company
expects to make payment promptly following the tender offer expiration
date, assuming all conditions to the tender offer have been satisfied or
waived.
    The tender offer and consent solicitation are conditioned on the
satisfaction of certain conditions including, but not limited to:
    -- The tender of Notes and delivery of consents, on or prior to the
       Consent Payment Deadline, representing a majority of the principal
       amount of such Notes outstanding.

    -- The execution by the trustee of the supplemental indentures
       implementing the proposed amendments following receipt of the requisite
       consents.

    -- The receipt and availability of funds from financings obtained in
       connection with the merger necessary to pay the total consideration or
       tender offer consideration, as the case may be, plus accrued interest
       to the applicable payment date, for validly tendered and not validly
       withdrawn Notes.

    -- All of the conditions precedent to the Merger have been satisfied or
       waived and the closing of the Merger shall have occurred or shall be
       occurring substantially concurrent with the initial payment date.
    The Company has retained UBS Securities LLC to act as the Dealer
Manager for the tender offer and Solicitation Agent for the consent
solicitation. Persons with questions regarding the tender offer and the
consent solicitation should contact the Dealer Manager at 888-722-9555,
ext. 4210 (toll-free) or 203-719-4210 (collect). Requests for documentation
may be directed to MacKenzie Partners, Inc., the Information Agent, which
can be contacted at 800-322-2885 (toll-free) or 212-929-5500 (collect).
    This press release is for informational purposes only and is neither an
offer to purchase nor a solicitation of an offer to sell the Notes. The
offer to purchase the Notes is only being made pursuant to the tender offer
and consent solicitation documents, including the Offer to Purchase that
the Company is distributing to holders of Notes. The tender offer and
consent solicitation are not being made to holders of Notes in any
jurisdiction in which the making or acceptance thereof would not be in
compliance with the securities, blue sky or other laws of such
jurisdiction. In any jurisdiction in which the tender offer or consent
solicitation is required to be made by a licensed broker or dealer, they
shall be deemed to be made by UBS Securities LLC on behalf of the Company.
None of the Company, the Dealer Manager, the Information Agent or the
depositary makes any recommendation in connection with the tender offer or
the consent solicitation.
    Forward-Looking Statements
    Except for historical information contained herein, the statements in
this release are forward-looking. Forward-looking statements involve known
and unknown risks and uncertainties that may cause the actual results in
future periods of the Company to differ materially from forecasted results.
Those risks include, among other things, obtaining suitable financing to
support our growth in operations; possible acquisition or divestiture
transactions; managing our growth to achieve operating efficiencies;
successfully competing in our markets; adequately protecting our
proprietary information and technology from competitors; assuring that our
products are not rendered obsolete by products or technologies of
competitors; successfully managing product liability risks; and avoiding
problems with third parties, including key personnel, upon whom we may be
dependent. The risks associated with forward-looking statements are more
fully described in our filings with the Securities and Exchange Commission.
The Company assumes no duty to update its forward-looking statements as of
any future date.

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