For more information, contact:

Richard Beck Advanced Energy Industries 970/407-6204

Dr. Joseph Stach RF Power Products 609/627-6100

AE To Acquire RF Power products in Exchange of Stock: Merger Will Add Approximately $34 Million to Advanced Energy’s Revenue Base

FORT COLLINS, Colorado/VOORHEES, New Jersey (June 2, 1998)—Advanced Energy Industries, Inc. (Nasdaq:AEIS) today announced that it has agreed to acquire RF Power Products, Inc. (ASE:RFP) in an exchange of stock. RF Power Products shareholders will receive between 3,500,000 and 4,000,000 shares of common stock in Advanced Energy with an aggregate value of approximately $55.0 million depending upon the price of Advanced Energy stock at the time of closing, subject to specified adjustments. A definitive agreement has been approved by the board of directors of both companies. Consummation of the transaction is subject to approval by RF Power Products shareholders, antitrust clearances and certain other conditions. RF Power Products’ fiscal 1997 revenues were $33.8 million.

 

The acquisition is expected to be accounted for as a pooling of interests. RF Power Products will operate as a wholly-owned subsidiary of Advanced Energy. RF Power Products designs and manufactures radio frequency (RF) power systems, matching networks and peripheral products primarily for original equipment providers in semiconductor, commercial coating, flat panel display and analytical instrumentation markets.

Douglas S. Schatz, Advanced Energy’s Chairman and Chief Executive Officer, said, “As an established provider of RF power systems, RF Power Products will boost Advanced Energy’s presence in the RF market and bring us additional technological resources. Combined with our RF technology, this acquisition enables Advanced Energy to provide our global customers with a complete suite of RF power solutions, while expanding the technology base and service capabilities of both companies.”

“This exciting union will offer significant benefits to customers by providing broad power and frequency ranges not currently available from any one source, including a vast array of RF power products. The combined technology is the best available in the market today. With this acquisition, our combined companies will be able to more broadly apply product development resources toward meeting future customer needs,” Schatz said.

“Having been in business for many years, RF Power Products has established strong relationships with a number of global leaders including Applied Materials, Lam Research and Veeco. These relationships will further strengthen Advanced Energy’s own ties with some of these same customers, as well as allow us to enter new customer relationships and industries, including food processing and instrumentation, which are new market sectors for us. We are excited by the tremendous people that RF Power Products has to complement the extremely talented employees of Advanced Energy,” he said.

Schatz further stated that the acquisition of RF Power Products gives Advanced Energy access to a more available labor base than that available in the Fort Collins, Colorado area at the engineering and human resources levels. “RF Power Products’ location in New Jersey has one of the greatest concentrations of RF engineers in the country because of its proximity to the defense industry and major research companies. The ability to tap this labor base solves an issue we have experienced in the past due to our location,” he said.

“We are also delighted that Messrs. Zafiropoulo and Starek, currently directors of RF Power Products, will join the board of Advanced Energy at the closing date,” he added.

Through the acquisition of RF Power Products, Advanced Energy accelerates its global expansion in the RF market. In addition to its manufacturing headquarters, RF Power Products has sales and service offices in Santa Clara, California, Austin, Texas and the United Kingdom, and technical representatives and distributors in Korea, Taiwan and Japan.

Dr. Joseph Stach, RF Power Products’ President and Chief Executive Officer, stated, “RF Power Products’ strengths lie in our RF technology and people base that include some of the country’s leading RF engineers. These strengths together with Advanced Energy’s technology, people and lead