Ultralife Batteries completes acquisition of McDowell Research

NEWARK, N.Y., 11 July 2006. Ultralife Batteries Inc. has completed the acquisition of McDowell Research, a manufacturer of military communications accessories located in Waco, Texas. In conjunction with the closing of the acquisition, Mr. Tom Hauke has been named a corporate officer of Ultralife Batteries and will retain his title as president of McDowell Research.

NEWARK, N.Y., 11 July 2006. Ultralife Batteries Inc. has completed the acquisition of McDowell Research, a manufacturer of military communications accessories located in Waco, Texas. In conjunction with the closing of the acquisition, Mr. Tom Hauke has been named a corporate officer of Ultralife Batteries and will retain his title as president of McDowell Research.

Under the terms of the agreement, the purchase price of approximately $25 million consists of $5 million in cash and a $20 million non-transferable convertible note held by the sellers.

Ultralife's primary lending banks have assisted with financing the cash portion of the purchase price by enhancing the company's credit facility. The $20 million convertible note carries a five-year term and is convertible at $15 per share into 1.33 million shares of Ultralife common stock, with a forced conversion feature at $17.50 per share.

"We acquired McDowell to enhance our channels into the rapidly growing special operations area and to strengthen our presence in global military markets," says John D. Kavazanjian, Ultralife's president and chief executive officer. "This acquisition will significantly broaden our solutions offerings in the military and government sectors."

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