UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.               )

 

 

BRUKER BIOSCIENCES CORPORATION
40 Manning Road
Billerica, MA 01821
(978) 663-3660

To the stockholders of Bruker BioSciences Corporation:

On behalf of the board of directors and management of Bruker BioSciences Corporation, I would like to invite you to attend our Annual Meeting of Stockholders to be held on Thursday, June 29, 2006 at 9:00 a.m., Local Time, at the offices of Nixon Peabody LLP, 100 Summer Street, Boston, Massachusetts.

At this important meeting you will be asked to consider and vote on, among other things, a proposal to approve the transactions contemplated by the stock purchase agreement, dated as of April 17, 2006, by and among Bruker BioSciences, Bruker Optics Inc. and the stockholders of Bruker Optics relating to the acquisition of Bruker Optics by Bruker BioSciences, including the issuance of shares of Bruker BioSciences common stock in connection with the acquisition.

Under the stock purchase agreement, we will acquire all of the stock of Bruker Optics in exchange for approximately $75.5 million in cash and shares of our common stock with a value of approximately $55.8 million. The actual number of shares that will be issued to Bruker Optics stockholders will be determined based on the average of closing prices per share of Bruker BioSciences common stock on the Nasdaq National Market for a period of 10 consecutive trading days ending three days before the closing date, which is referred to as the trailing average. If the closing date were on May [  ], 2006, we would have issued [           ] shares of our common stock to the Bruker Optics stockholders based on a trailing average of $[   ] per share, which as of May [  ], 2006 represented approximately [    %] of our post-transaction outstanding voting securities. In addition, approximately $3.7 million will be paid to Bruker Optics optionholders in consideration of the cancellation of their options. The five largest Bruker Optics stockholders, comprised of me, Frank H. Laukien, and members of my family, are also major stockholders of Bruker BioSciences.  Accordingly, the board of directors of Bruker BioSciences appointed a special committee consisting of independent directors unaffiliated with the Laukien family for the purpose of considering the advisability of the acquisition, negotiating its terms on behalf of Bruker BioSciences and recommending to the board of directors of Bruker BioSciences whether the acquisition was in the best interests of the stockholders of Bruker BioSciences who are not affiliated with the Laukien family.

The closing of the transaction is contingent on stockholder approval of the transactions contemplated by the stock purchase agreement, including the issuance of shares of our common stock in connection with the acquisition. Although not required under Delaware law, the rules of the Nasdaq National Market require stockholder approval of the share issuance, which must, under our bylaws, be approved by the affirmative vote of the holders of a majority of the shares of Bruker BioSciences common stock present or represented by proxy at the Annual Meeting and entitled to vote. Under the terms of the stock purchase agreement, the Bruker Optics stockholders, who currently hold, in the aggregate, 57.79% of the outstanding shares of Bruker BioSciences common stock, have covenanted that they will vote the shares of our stock that they own in favor of the transactions contemplated by the stock purchase agreement. In addition, under the terms of the stock purchase agreement, the transactions contemplated by the stock purchase agreement must also be approved by the holders of shares of Bruker BioSciences common stock who are unaffiliated with the five Laukien family members and who represent at least a majority of the total votes cast by these unaffiliated holders at the Annual Meeting.

After careful consideration, the board of directors and the special committee of the board of directors have unanimously approved the terms and conditions of the stock purchase agreement and recommend that you vote “FOR” the acquisition of Bruker Optics and the related issuance of shares of Bruker BioSciences common stock.

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In addition to the proposal relating to the acquisition of Bruker Optics and the issuance of shares in connection with the acquisition of Bruker Optics, you will be asked to consider and vote upon the following proposals at the Annual Meeting:

·       A proposal to amend the Bruker BioSciences certificate of incorporation to increase the number of shares of common stock authorized for issuance from 150,000,000 to 200,000,000, contingent on the approval of the issuance of shares and completion of the transactions contemplated by the stock purchase agreement.

·       A proposal to amend the Bruker BioSciences amended and restated stock option plan to increase the number of shares of common stock for which options and restricted stock may be granted under the stock option plan from 6,320,000 to 8,000,000.

·       A proposal to elect three Class III Directors to hold office until the 2009 Annual Meeting of Stockholders.

·       A proposal to ratify the selection of Ernst & Young LLP as the independent registered public accounting firm of Bruker BioSciences for fiscal year 2006.

The Notice of Annual Meeting of Stockholders and Proxy Statement, which further describe the formal business to be conducted at the meeting, and Proxy Card accompany this letter. The company’s Annual Report to Stockholders is also enclosed for your information.

All stockholders are invited to attend the meeting. Whether or not you plan to attend, you can ensure that your shares are represented at the meeting by promptly voting and submitting your proxy by telephone or by the internet, or by completing, dating and returning the enclosed Proxy Card. A postage-paid envelope is enclosed for that purpose. Your shares cannot be voted unless you vote by telephone or internet, date, sign and return the enclosed Proxy Card, or attend the meeting in person. Regardless of the number of shares you own, your careful consideration of, and vote on, the matters before the stockholders is important.

I look forward to your participation and thank you for your continued support.

	Sincerely,
	Frank H. Laukien, Ph.D.
	Chairman, President and Chief Executive Officer

 

Neither the Securities and Exchange Commission nor any U.S. state securities commission has approved or disapproved of the proposed issuance of shares of Bruker BioSciences common stock in connection with the acquisition or determined whether this proxy statement is truthful or complete. Any representation to the contrary is a criminal offense.

This proxy statement is dated May 26, 2006 and is first being mailed to Bruker BioSciences stockholders on or about May 26, 2006.

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REFERENCE TO ADDITIONAL INFORMATION

This proxy statement incorporates by reference important business and financial information about Bruker BioSciences from documents that are not included in or delivered with this proxy statement.  You may obtain documents that are incorporated by reference in this proxy statement without charge by requesting them in writing or by telephone from Bruker BioSciences at:

Bruker BioSciences Corporation
40 Manning Park
Billerica, Massachusetts  01821
Telephone: 978-663-3660
Attention:  Investor Relations

Please note that copies of the documents provided to you will not include exhibits, unless the exhibits are specifically incorporated by reference in the documents or this proxy statement.

In order to receive timely delivery of requested documents in advance of the Annual Meeting, you should make your request no later than June 7, 2006.

For a more detailed description of the information incorporated in this proxy statement by reference and how you  may obtain it, see “Where You Can Find More Information” beginning on page 97.

BRUKER BIOSCIENCES CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Our Stockholders:

Notice is hereby given that the Annual Meeting of the Stockholders of Bruker BioSciences Corporation will be held on Thursday, June 29, 2006, at 9:00 a.m., Local Time, at the offices of Nixon Peabody LLP, 100 Summer Street, Boston, Massachusetts, for the following purposes:

1.                To consider and vote upon a proposal to approve the transactions contemplated by the stock purchase agreement, dated as of April 17, 2006, by and among Bruker BioSciences, Bruker Optics Inc. and the stockholders of Bruker Optics relating to the acquisition of Bruker Optics by Bruker BioSciences and to approve the issuance of shares of Bruker BioSciences common stock in connection with the acquisition.

2.                To consider and vote upon a proposal to amend the Bruker BioSciences certificate of incorporation to increase the number of shares of common stock authorized for issuance from 150,000,000 to 200,000,000, contingent on the approval of the issuance of shares and completion of the transactions contemplated by the stock purchase agreement.

3.                To consider and vote upon a proposal to amend the Bruker BioSciences amended and restated stock option plan to increase the number of shares of common stock for which options and restricted stock may be granted under the stock option plan from 6,320,000 to 8,000,000.

4.                To elect three Class III directors to hold office until the 2009 Annual Meeting of Stockholders.

5.                To ratify the selection of Ernst & Young LLP as the independent registered public accounting firm of Bruker BioSciences Corporation for fiscal year 2006.

6.                To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

Adoption of the second proposal above relating to the amendment to our certificate of incorporation is contingent on the adoption of the first proposal relating to the approval of the Bruker Optics acquisition and related issuance of shares of common stock in the acquisition. All of the items of business listed above are more fully described in the Proxy Statement accompanying this Notice.

The board of directors has fixed the close of business on May 8, 2006 as the record date for the determination of stockholders entitled to notice of and to vote at this Annual Meeting and at any adjournment or postponement thereof.

 

Billerica, Massachusetts
May 26, 2006

All stockholders are invited to attend the meeting. Whether or not you plan to attend, you can ensure that your shares are represented at the meeting by promptly voting and submitting your proxy by telephone or by the internet, or by completing, dating and returning the enclosed Proxy Card. A postage-paid envelope is enclosed for that purpose. Your shares cannot be voted unless you vote by telephone or internet, date, sign and return the enclosed Proxy Card, or attend the meeting in person. Regardless of the number of shares you own, your careful consideration of, and vote on, the matters before the stockholders is important. Even if you have given your proxy, you may still vote in person if you attend the meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you will not be permitted to vote in person at the meeting unless you first obtain a proxy issued in your name from the record holder.

BRUKER BIOSCIENCES CORPORATION
PROXY STATEMENT

TABLE OF CONTENTS

		Page
SUMMARY TERM SHEET		1
QUESTIONS AND ANSWERS ABOUT THE ACQUISITION		3
SUMMARY		6
The Companies		6
Structure of the Acquisition and Operations after the Acquisition		8
Purchase Price		8
Recommendation of the Board of Directors and Opinion of Financial Advisors		8
The Stockholder Meeting		8
Interests of Directors and Executive Officers in the Acquisition		8
Material U.S. Federal Income Tax Consequences		9
Conditions to the Completion of the Acquisition		9
Termination of the Stock Purchase Agreement		9
Expenses		10
No Solicitation Provisions		10
Accounting Treatment of the Acquisition		10
Regulatory Matters		10
Completion and Effectiveness of the Acquisition		10
Bruker Optics Selected Consolidated Financial Data		11
Selected Unaudited Pro Forma Condensed Combined Financial Data		11
Comparative Per Share Information		13
Per Share Market Price Data and Dividend Information		14
RISK FACTORS		15
CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS		16
STOCKHOLDER MEETING		17
Date, Time and Place of Stockholder Meeting		17
Purpose		17
Record Date		18
Vote Required for Approval		18
Voting of Proxies; Quorum; Abstentions and Broker Non-Votes		19
Solicitation of Proxies		19
Recommendations of the Board of Directors and Special Committee		19
PROPOSAL NO. 1 THE ACQUISITION AND THE ISSUANCE OF SHARES IN CONNECTION WITH THE ACQUISITION		20
General		20
Proposals		20
Background of the Acquisition		20
Reasons for the Acquisition		24
Recommendation of the Board of Directors and Special Committee		25
Opinion of Bruker BioSciences’ Financial Advisor		26
Interests of Certain Directors and Executive Officers in the Acquisition		35
Completion and Effectiveness of the Acquisition		36

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Structure of the Acquisition and Operations Post-Acquisition		36
Material United States Federal Income Tax Consequences of the Acquisition		36
Accounting Treatment of the Acquisition		36
Regulatory Matters		36
No Appraisal Rights		37
Foreign Regulatory Requirements		37
Restrictions on Sales of Shares Issued In Connection with the Acquisition		37
THE STOCK PURCHASE AGREEMENT		37
General		37
Closing Date		38
Purchase Price—Payment		38
Cancellation of Bruker Optics Stock Options		38
Escrow		38
Representations and Warranties		39
Covenants		41
Conditions to the Acquisition		44
Indemnification		45
Termination of the Stock Purchase Agreement		47
Expenses		47
Amendment and Waiver		47
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS		48
INFORMATION ABOUT BRUKER OPTICS		58
Business		58
Bruker Optics Supplementary Financial Information		60
Management’s Discussion and Analysis of Financial Condition and Results of Operations		60
Quantitative and Qualitative Disclosures about Market Risk		67
Principal Stockholders and Holdings of Management		68
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS		69
DESCRIPTION OF BRUKER BIOSCIENCES CAPITAL STOCK		72
COMPARISON OF RIGHTS OF BRUKER BIOSCIENCES STOCKHOLDERS AND BRUKER OPTICS STOCKHOLDERS		73
PROPOSAL NO. 2 AMENDMENT OF BRUKER BIOSCIENCES CERTIFICATE OF INCORPORATION TO INCREASE THE AUTHORIZED SHARES IF THE ACQUISITION IS CONSUMMATED		74
Recommendation of the Bruker Biosciences Board of Directors		75
PROPOSAL NO. 3 AMENDMENT TO THE BRUKER BIOSCIENCES AMENDED AND RESTATED STOCK OPTION PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK FOR WHICH OPTIONS MAY BE GRANTED		75
Recommendation of the Bruker Biosciences Board of Directors		76
BRUKER BIOSCIENCES 2000 STOCK OPTION PLAN		76
PROPOSAL NO. 4 ELECTION OF DIRECTORS		79
Nominees		80
Directors		80
Board Committees and Meetings		82

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Compensation of Directors		82
Director Nominations		83
STOCKHOLDER COMMUNICATIONS		85
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE		84
EXECUTIVE OFFICERS		85
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		86
SUMMARY OF EXECUTIVE COMPENSATION		89
Summary Compensation Table		89
Grants of Stock Options		90
Aggregated Stock Option Exercises in Fiscal 2005 and Fiscal Year-End Option Values		90
Compensation Committee Report on Executive Compensation (1)		91
REPORT OF THE AUDIT COMMITTEE		95
PROPOSAL NO. 5 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		96
STOCKHOLDER PROPOSALS		97
OTHER MATTERS		97
WHERE YOU CAN FIND MORE INFORMATION		97
10-K REPORT		98
VOTING PROXIES		98
INDEX TO FINANCIAL STATEMENTS		F-1
ANNEX A—Stock Purchase Agreement
ANNEX B—Opinion of Bear, Stearns & Co. Inc.
ANNEX C—Proposed Amendment to the Certificate of Incorporation of Bruker BioSciences Corporation
ANNEX D—Bruker BioSciences Amended and Restated 2000 Stock Option Plan
APPENDIX A—Proxy Card

 

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SUMMARY TERM SHEET

The following is a summary of the proposed transaction between Bruker BioSciences Corporation and Bruker Optics Inc. in which Bruker BioSciences proposes to acquire all of the capital stock of Bruker Optics. Bruker BioSciences is seeking stockholder approval of the acquisition and the issuance of Bruker BioSciences common stock to Bruker Optics stockholders.

This term sheet is a summary and does not contain all of the information that may be important to you. You should carefully read this entire document, including the appendices and the other documents to which this document refers you, for a more complete understanding of the matters relating to the transaction and the issuance of Bruker BioSciences common stock. See “Where You Can Find More Information” beginning on page 97.

On April 17, 2006, Bruker BioSciences entered into a definitive stock purchase agreement to acquire all of the capital stock of Bruker Optics, which we refer to as the stock purchase agreement. In connection with the proposed acquisition of all of the capital stock of Bruker Optics:

·       The total purchase price payable by Bruker BioSciences to the holders of all of the Bruker Optics stock and stock options is $135 million, in the aggregate.

·       $131.3 million of the $135 million purchase price, which will consist of a combination of cash and newly issued shares of Bruker BioSciences common stock, will be paid to the Bruker Optics stockholders pro rata based on their respective ownership of Bruker Optics stock.

·       Bruker BioSciences expects to issue shares of its common stock with a value of approximately $55.8 million to Bruker Optics stockholders as the stock portion of the purchase price. The actual number of shares that will be issued to Bruker Optics stockholders will be determined based on the average of closing prices per share of Bruker BioSciences common stock on the Nasdaq National Market for a period of 10 consecutive trading days ending three days before the closing date, which is referred to as the trailing average. If the closing date were on May [   ], 2006, we would have issued [              ] shares of our common stock to the Bruker Optics stockholders based on a trailing average of $[    ] per share.

·       Some Bruker Optics stockholders have elected to receive a greater portion of their consideration in cash and some have elected to receive a greater portion of their consideration in stock.

·       All Bruker Optics stock options, whether vested or unvested, will be cancelled and the option holders will receive cash payments totaling approximately $3.7 million, which is part of the total purchase price of $135 million.

·       The stock purchase agreement prohibits the sale of the Bruker BioSciences shares issued as part of the purchase price for a period of one (1) year after the closing date.

·       The five principal stockholders of Bruker Optics, including our president and chief executive officer, Frank H. Laukien, currently hold, in the aggregate, 57.79% of the outstanding shares of Bruker BioSciences common stock, and, immediately following the transaction, will hold approximately [   %] of the outstanding shares of Bruker BioSciences common stock.

·       These five principal stockholders will be subject to five (5) year non-competition and non-solicitation covenants which are described in the stock purchase agreement.

·       $13.5 million of the cash purchase price will be held in escrow following the closing of the transaction to satisfy any indemnification claims asserted by Bruker BioSciences within a designated time period.

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·       An additional $1 million of the cash purchase price will be held in escrow following the closing of the transaction to satisfy any post-closing adjustments to the purchase consideration which may result if the working capital of Bruker Optics is less than $9 million at closing.

·       Dirk D. Laukien, the chief executive officer and president of Bruker Optics, will become a senior vice president of Bruker BioSciences following the acquisition and in connection with his new role, will also receive 500,000 shares of restricted stock. In addition, immediately prior to the closing of the acquisition, Bruker Optics may make a one time $2.5 million bonus payment to Dirk D. Laukien.

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QUESTIONS AND ANSWERS ABOUT THE ACQUISITION

Q:             Why is Bruker BioSciences proposing the acquisition?

A:            We are proposing to acquire Bruker Optics because we believe that the Bruker Optics business complements the business of our two existing direct operating subsidiaries, Bruker Daltonics and Bruker AXS. We expect that acquiring Bruker Optics will increase our sales opportunities and increase our presence in various markets, providing Bruker BioSciences with an extra competitive edge as we become a more broadly based company.

Q:             How much is Bruker BioSciences paying for Bruker Optics?

A:            Bruker BioSciences has agreed to pay the stockholders and option holders of Bruker Optics $135 million, in the aggregate, for all of the outstanding shares of Bruker Optics and cancellation of all stock options.

Q:             How will Bruker BioSciences pay for the shares of Bruker Optics?

A:            Bruker BioSciences will purchase the Bruker Optics stock using a combination of cash and newly issued shares of Bruker BioSciences common stock.

Q:             What will happen to my shares of Bruker BioSciences common stock in the acquisition?

A:            The shares of Bruker BioSciences common stock that you hold will not change in the acquisition.

Q:             What am I voting on in connection with the acquisition and why?

A:            You are voting to approve Bruker BioScience’s acquisition of Bruker Optics as well as the issuance of the shares of our common stock which will be used a part of the consideration for the acquisition.

Our common stock is quoted on the NASDAQ National Stock Market. NASD Rule 4350(i)(1)(C)(i) requires stockholder approval of the issuance of common stock in connection with the acquisition because certain of our directors, who are also significant stockholders and one of whom is an officer, have greater than a 5% equity interest in Bruker Optics, and the shares of our common stock issued in connection with the acquisition will result in a greater than 5% increase in Bruker BioSciences outstanding common stock and voting power.

The board of directors of Bruker BioSciences appointed a special committee consisting of independent directors unaffiliated with the Laukien family for the purpose of considering the advisability of the acquisition, negotiating its terms on behalf of Bruker BioSciences and recommending to the board of directors of Bruker BioSciences whether the acquisition was in the best interests of the stockholders of Bruker BioSciences who are not affiliated with the Laukien family. The terms of the stock purchase agreement require that the transaction itself, rather than just the share issuance as required under NASD Rule 4350(i)(1)(C)(i), be approved by the holders of shares of Bruker BioSciences common stock who are unaffiliated with the five Laukien family members and who represent at least a majority of the total votes cast by these unaffiliated holders at the Annual Meeting.

Q:             What stockholder approvals are needed in connection with the acquisition?

A:            The affirmative vote of the holders of a majority of the outstanding shares of Bruker BioSciences common stock present or represented by proxy and entitled to vote at the Annual Meeting is required to approve the transactions contemplated by the stock purchase agreement, including the issuance of shares of Bruker BioSciences common stock to be used as part of the acquisition consideration. Each holder of common stock is entitled to one vote per share. As of the record

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date, Bruker BioSciences directors and executive officers and their affiliates owned 58.44% of the outstanding shares. Five stockholders of Bruker BioSciences, including Frank H. Laukien, are also stockholders of Bruker Optics and are parties to the stock purchase agreement. These five stockholders have covenanted in the stock purchase agreement that they will vote in favor of the acquisition. The shares held by these five stockholders represent approximately 57.79% of the voting power of Bruker BioSciences capital stock entitled to vote at the stockholder meeting, and are sufficient, under our bylaws and NASD rules, to approve the transactions contemplated by the stock purchase agreement, including the share issuance.

The terms of the stock purchase agreement also provide that the transactions contemplated by the stock purchase agreement are subject to approval by holders of shares of Bruker BioSciences common stock who are unaffiliated with the five Laukien family members and who represent at least a majority of the total votes cast by these unaffiliated holders at the Annual Meeting.

Q:             Will the shares of common stock to be issued as part of the consideration for the purchase of the shares of Bruker Optics be registered?

A:            No, the shares of Bruker BioSciences common stock to be issued in connection with the acquisition will not be registered under the Securities Act of 1933 and thus will not be freely transferable under the Securities Act of 1933. Bruker Optics stockholders receiving shares of Bruker BioSciences common stock in the acquisition may sell these shares pursuant to any applicable exemption under the Securities Act except that, pursuant to the terms of the stock purchase agreement, they are prohibited from selling the shares for a period of one year after the closing date of the acquisition.

Q:             What are the material U.S. federal income tax consequences of the acquisition?

A:            The acquisition will not result in any material U.S. federal income tax consequences for Bruker BioSciences stockholders.

Q:             When do you expect the acquisition to be completed?

A:            We are working to complete the acquisition as quickly as possible. We expect to complete the acquisition during the third quarter of 2006.

Q:             Do I have any dissenters rights?

A:            No. There are no rights of appraisal or similar rights of dissenters with respect to any matter to be acted upon pursuant to this proxy statement.

QUESTIONS AND ANSWERS ABOUT VOTING

Q:             What do I need to do now?

A:            After carefully reading and considering the information contained in this proxy statement, please respond by completing, signing and dating your proxy card or voting instructions and returning it in the enclosed postage paid envelope, or by submitting your proxy or voting instructions by telephone or through the internet, as soon as possible so that your shares may be represented at the stockholder meeting.

Q:             What if I don’t vote?

A:            If you fail to respond, it will have the same effect as a vote against the amendment to the certificate of incorporation, although it will have no effect on the other proposals.

If you respond and do not indicate how you want to vote, your proxy will be counted as a vote in favor of all of the proposals.

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If you respond and abstain from voting, your proxy will have the same effect as a vote against all of the proposals, other than the election of directors.

Q:             Can I change my vote after I have delivered my proxy?

A:            Yes. You can change your vote at any time before your proxy is voted at the stockholder meeting. You can do this in one of three ways. You can revoke your proxy, submit a new proxy or, if you are a holder of record, you can attend the Annual  Meeting and vote in person. If you choose to revoke your proxy or submit a new proxy, you must submit your notice of revocation or your new proxy to the secretary of Bruker BioSciences before the Annual Meeting. If your shares are held in an account at a brokerage firm or bank, you should contact your brokerage firm or bank to change your vote. Also, if you submit your proxy electronically through the internet or by telephone, you can change your vote by submitting a proxy at a later date, using the same procedures, in which case your later submitted proxy will be recorded and your earlier proxy revoked.

Q:             Who can help answer my questions?

A:            If you have any questions about the proposals or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, you should contact:

Bruker BioSciences Corporation
Investor Relations
40 Manning Park
Billerica, Massachusetts  01821
Telephone: 978-663-3660, ext. 1411
e-mail: Michael.Willett@bdal.com

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ACQUISITION SUMMARY

This summary highlights selected information about the acquisition and the related issuance of shares and may not contain all of the information that is important to you. You should carefully read this entire proxy statement and the other documents we refer to, in their entirety, for a more complete understanding of the acquisition. In particular, you should read the documents attached to this proxy statement, including the stock purchase agreement, which is attached as Annex A. In addition, this proxy statement incorporates important business and financial information about Bruker BioSciences from other documents that may not be included in or delivered with this proxy statement. You may obtain the information incorporated by reference into this proxy statement without charge by following the instructions in the section entitled “Where You Can Find More Information” that begins on page 97 of this proxy statement.

THE COMPANIES (See page 58 for Bruker Optics)

Bruker BioSciences Corporation
40 Manning Park
Billerica, Massachusetts  01821
(978) 663-3660
http://www.bruker-biosciences.com

Bruker BioSciences Corporation was incorporated in Massachusetts as Bruker Federal Systems Corporation. In February 2000, we reincorporated in Delaware as Bruker Daltonics Inc. In July 2003, we merged with Bruker AXS Inc., and we were the surviving corporation in that merger. In connection with the merger, we changed our name to Bruker BioSciences Corporation and formed two operating subsidiaries, Bruker Daltonics and Bruker AXS, into which we transferred substantially all of their respective assets and liabilities, except cash. All references to “former Bruker AXS” refer to the public entity which merged with the company in July 2003.

Bruker Daltonics

Bruker Daltonics is a leading developer and provider of innovative life science tools based on mass spectrometry. Bruker Daltonics’ substantial investment in research and development allows the company to design, manufacture and market a broad array of products intended to meet the rapidly growing needs of a diverse customer base. Bruker Daltonics’ customers include pharmaceutical companies, biotechnology companies, agricultural biotechnology companies, proteomics companies, molecular diagnostics companies, academic institutions and government agencies.

Mass spectrometers are sophisticated devices that measure the mass or weight of a molecule and provide highly accurate information about the structure of materials. Bruker Daltonics’ mass spectrometry-based systems often combine advanced mass spectrometry instrumentation; automated sampling and sample preparation robots; reagent kits and other disposable products, called consumables, used in conducting tests, or assays, and powerful bioinformatics software. These systems offer integrated solutions for applications in multiple existing and emerging markets including genomics and proteomics, metabolic and biomarker profiling, drug discovery and development, molecular assays and diagnostics, molecular and systems biology and basic medical research.

Bruker Daltonics is also a worldwide leader in supplying mass spectrometry-based systems for substance detection and pathogen identification in security and defense applications.

Bruker AXS Inc.

Bruker AXS is a leading worldwide developer and provider of advanced integrated X-ray systems which provide solutions for molecular and elemental analysis by X-ray diffraction and X-ray fluorescence.

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Bruker AXS’ products, which have particular application in the drug discovery and materials science fields, provide customers with the ability to determine the structure of specific molecules, such as proteins, and to characterize and determine the composition of materials. Bruker AXS’ customers include biotechnology and pharmaceutical companies, semiconductor companies, raw material manufacturers, chemical companies, academic institutions and other businesses involved in materials analysis.

Bruker AXS’ X-ray systems are sophisticated devices that use extremely short wavelengths of energy to determine the characteristics of matter. Depending on the customer-specific application, these X-ray systems incorporate one of three core technology applications: single crystal X-ray diffraction, known as SCD or X-ray crystallography; polycrystalline X-ray diffraction, known as XRD or X-ray diffraction; and X-ray fluorescence, known as XRF. Using a modular platform approach, Bruker AXS often combines each of these three technology applications with sample preparation tools, automation, consumables and data analysis software. Bruker AXS’ systems offer integrated solutions for applications in multiple existing and emerging markets, including:

·       drug formulation, quality control and process analysis;

·       structural proteomics and structure-based drug discovery;

·       advanced and basic materials research and analysis; and

·       industrial quality control and process analysis.

Bruker Optics Inc.
19 Fortune Drive
Billerica, Massachusetts  01821
(978) 439-9899
http://www.brukeroptics.com

Bruker Optics was incorporated in Massachusetts in May 1995, originally as Bruker Spectrospin, Inc., later changing its name to Bruker Optics, Inc. In July 2000, Bruker Optics, Inc. reincorporated in Delaware as Bruker Optics Inc. Bruker Optics is a privately held company.

Bruker Optics manufactures and distributes research, analytical and process analysis instruments based on infrared (IR), near-infrared (NIR), Raman and time-domain magnetic resonance (TD-NMR) spectroscopies. These products are utilized in industry, government and academia for a wide range of instruments and solutions for life science, pharmaceutical analysis, food and agricultural analysis in research and development, quality control and process analysis applications.

As with all spectroscopic techniques, vibrational spectroscopy can be used to identify a compound and to investigate the composition of a sample. Bruker Optics utilizes Fourier Transform (FT-IR, FT-NIR and FT-Raman) and the dispersive (Raman) measurement techniques on an extensive range of laboratory and process spectrometers. Infrared spectroscopy is a type of absorption spectroscopy that uses the infrared part of the electromagnetic spectrum. Raman spectroscopy relies on the Raman scattering of a monochromatic light that yields similar and complementary analytical information. Infrared and Raman spectroscopy are widely used in both research and industry as a simple, rapid, non-destructive and reliable technique from basic sample identification and quality control to advanced research. The Bruker Optics product line is complemented by a wide range of sampling accessories and techniques which include microanalysis, high-throughput screening and many others, to help users find the best suitable solution to analyze their samples effectively.

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STRUCTURE OF THE ACQUISITION AND OPERATIONS AFTER THE ACQUISITION (see page 36)

Bruker BioSciences is purchasing all of the outstanding stock of Bruker Optics from the Bruker Optics stockholders in a private placement. Bruker BioSciences intends to operate Bruker Optics as a wholly-owned subsidiary alongside Bruker Daltonics and Bruker AXS.

PURCHASE PRICE  (see page 38)

The total purchase price payable by Bruker BioSciences for the Bruker Optics stock and stock options in the transaction is $135 million, in the aggregate, payable in cash and Bruker BioSciences stock. Approximately $131.3 million of this consideration will be paid to the Bruker Optics stockholders pro rata in accordance with their respective ownership of the Bruker Optics stock. The remaining $3.7 million of the consideration will be paid to Bruker Optics option holders in consideration for the cancellation of all Bruker Optics options. As described in more detail later in this proxy statement, some Bruker Optics stockholders have elected to receive a greater portion of their consideration in cash and some have elected to receive a greater portion of their  consideration in stock.

RECOMMENDATION OF THE BOARD OF DIRECTORS AND OPINION OF FINANCIAL ADVISORS (see pages 26 and 26)

Recommendation of Bruker BioSciences’ Board of Directors.   Upon recommendation of the independent special committee of the board of directors, and after careful consideration, the board of directors of Bruker BioSciences unanimously determined that the stock purchase agreement and the transactions contemplated by the stock purchase agreement, including the issuance of shares in connection with the acquisition of Bruker Optics, are advisable and voted to approve the stock purchase agreement and recommends that the stockholders vote FOR the acquisition and the issuance of shares of Bruker BioSciences common stock in connection with the acquisition.

Opinion of Bruker BioSciences’ Financial Advisor.   Bear, Stearns & Co. Inc. has rendered a written opinion to the special committee of the board of directors of Bruker BioSciences that, as of April 17, 2006, and based upon and subject to the assumptions, qualifications and limitations set forth therein, the consideration to be issued in the acquisition was fair, from a financial point of view, to the holders of Bruker BioSciences shares, excluding the holders of Bruker BioSciences shares who also own Bruker Optics shares. The full text of the written opinion, dated April 17, 2006, is attached as Annex B. We encourage you to read the opinion carefully and in its entirety to understand the procedures followed, assumptions made, matters considered and limitations on the review undertaken by Bear Stearns in providing its opinion.

THE STOCKHOLDER MEETING (see page 17)

The Bruker BioSciences Annual Meeting will be held at the offices of Nixon Peabody LLP, 100 Summer Street, Boston, Massachusetts on June 29, 2006, starting at 9:00 a.m., local time.

INTERESTS OF DIRECTORS AND EXECUTIVE OFFICERS IN THE ACQUISITION (see page 35)

Some of the directors and executive officers of Bruker BioSciences may have interests in the acquisition that are different from, or are in addition to, the interests of Bruker BioSciences’ stockholders, including financial interests as stockholders of Bruker Optics. The five largest stockholders of Bruker Optics, including Frank H. Laukien and Bruker Optics’ president and CEO, Dirk D. Laukien, are also the five largest stockholders of Bruker BioSciences.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES (see page 36)

The acquisition will not result in any material U.S. federal income tax consequences for Bruker BioSciences stockholders, excluding the holders of Bruker BioSciences shares who also own Bruker Optics shares.

CONDITIONS TO THE COMPLETION OF THE ACQUISITION (see page 44)

Under the terms of the stock purchase agreement, the completion of the acquisition is subject to:

·       the approval of the transactions contemplated by the stock purchase agreement by the holders of shares of Bruker BioSciences common stock who are unaffiliated with Isolde Laukien, Jörg Laukien, Frank Laukien, Dirk Laukien and Marc Laukien and who represent at least a majority of the total votes cast by these unaffiliated holders at the Annual Meeting; and

·       the approval of the transactions contemplated by the stock purchase agreement by the holders of Bruker BioSciences common stock who represent at least a majority of the total votes cast at the Annual Meeting.

The completion of the transactions contemplated by the stock purchase agreement is also subject to the satisfaction or waiver of other conditions, including, among others, the expiration or termination of applicable waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. See “The Stock Purchase Agreement—Conditions to the Acquisition” on page 44.

TERMINATION OF THE STOCK PURCHASE AGREEMENT (see page 46)

The stock purchase agreement may be terminated at any time prior to closing by the mutual written consent of Bruker BioSciences and the sellers. In addition, either Bruker BioSciences or the sellers may terminate the stock purchase agreement at any time prior to closing if:

·       any governmental entity shall have issued an order permanently restraining, enjoining, or otherwise prohibiting the completion of the acquisition  and such order is final and nonappealable; or

·       the closing has not occurred by August 31, 2006, unless a breach of the stock purchase agreement by the party seeking termination is the cause of or results in the failure of the acquisition to be completed.

Bruker BioSciences may terminate the stock purchase agreement at any time prior to closing if:

·       the trailing average is less than $3.11; or

·       the sellers or Bruker Optics breach any of their respective covenants, representations and warranties, or other agreements contained in the stock purchase agreement and such breach would give rise to the failure of a condition to Bruker BioSciences’ obligation to complete the acquisition and such breach is not curable or, if curable, is not cured or waived within 20 calendar days after written notice of such breach has been delivered to the breaching party.

The sellers may terminate the stock purchase agreement at any time prior to closing if Bruker BioSciences breaches any of its covenants, representations and warranties, or other agreements contained in the stock purchase agreement and such breach would give rise to the failure of a condition to the sellers’ obligation to complete the acquisition and such breach is not curable or, if curable, is not cured or waived within 20 calendar days after written notice of such breach has been delivered to Bruker BioSciences.

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EXPENSES (see page 47)

The stock purchase agreement provides generally that regardless of whether the acquisition is consummated, all fees and expenses incurred by the parties will be paid by the party incurring such fees and expenses. With respect to fees due in connection with filings made pursuant to the Hart-Scott-Rodino Act, Bruker BioSciences shall be responsible for all fees relating to its own filing and Bruker Optics shall be responsible for all fees relating to filings made by it or any of the sellers. In addition, Bruker BioSciences shall be responsible for the payment of all transfer, documentary, sales, use, registration and other such taxes incurred in connection with the transaction, including all applicable German and other real estate transfer or gains taxes and stock transfer taxes, which may exceed, in the aggregate, $300,000.

“NO SOLICITATION” PROVISIONS (see page 43)

Bruker Optics has agreed to, and to cause its subsidiaries to, and the sellers have agreed to, and to cause Bruker Optics and its subsidiaries to, cause each of its officers, managers, employees, subsidiaries, affiliates, agents and other representatives to, as of the execution of the stock purchase agreement, cease any existing discussions or negotiations with respect to any inquiry or proposal regarding the sale, consolidation, merger or other similar transaction regarding Bruker Optics and not to initiate any such discussions or negotiations (other than with Bruker BioSciences) concerning any such inquiry or proposal. The sellers and Bruker Optics are obligated to immediately disclose to Bruker BioSciences any such third party inquiries or proposals, including the terms thereof.

ACCOUNTING TREATMENT OF THE ACQUISITION (see page 36)

The acquisition represents a business combination of companies under common control due to the majority ownership of both companies by the five Laukien family members as an affiliated stockholder group. As a result, the acquisition, as it relates to the shares owned by these affiliated stockholders, will be accounted for in a manner similar to a pooling-of-interest, or at historical carrying value. The acquisition of the shares of the non-affiliated stockholder will be accounted for using the purchase method of accounting, or at fair value, in a manner similar to acquisition of a minority interest.

REGULATORY MATTERS (see page 36)

Under U.S. antitrust laws, the companies may not complete the acquisition until Bruker BioSciences has notified the Antitrust Division of the Department of Justice and the Federal Trade Commission of the acquisition and filed the necessary report forms, and until a required waiting period has ended. Bruker BioSciences filed the required information and materials to notify the Department of Justice and the Federal Trade Commission of the acquisition on March 28, 2006. In addition, Bruker BioSciences must obtain any consents, authorizations, approvals, filings or exemptions in connection with compliance with the rules of the Nasdaq and make such filings and approvals as are required to be made or obtained under the securities or “Blue Sky” laws of various states in connection with the issuance of Bruker BioSciences common stock.

We cannot assure you that we will obtain all regulatory approvals to complete the acquisition or that the granting of these approvals will not involve the imposition of conditions on the completion of the acquisition or require changes to the terms of the acquisition. These conditions or changes could result in the conditions to the acquisition not being satisfied.

COMPLETION AND EFFECTIVENESS OF THE ACQUISITION (see page 36)

We will complete the acquisition when all of the conditions to completion of the acquisition are satisfied or waived in accordance with the stock purchase agreement. We expect to complete the acquisition during the third calendar quarter of 2006.

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BRUKER OPTICS SELECTED CONSOLIDATED FINANCIAL DATA

The following selected consolidated financial information of Bruker Optics is provided to aid your analysis of the financial aspects of the acquisition. We derived this information from unaudited consolidated financial statements for the three months ended March 31, 2006 and 2005, and from audited consolidated financial statements for the years ended December 31, 2005, 2004, 2003, 2002 and 2001. This information is only a summary, and you should read it in conjunction with Bruker Optics’ historical consolidated financial statements and the related notes and Management’s Discussion and Analysis of Financial Conditions and Results of Operations contained in this proxy statement. See “WHERE YOU CAN FIND MORE INFORMATION” on page 97.

 

 

SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL DATA

We are providing the following selected Unaudited Pro Forma Condensed Combined Financial Data to provide you with a better understanding of what the results of operations and financial position of Bruker BioSciences might have been had the acquisition been completed at an earlier date. The Unaudited Pro Forma Condensed Combined Statements of Operations data for the three months ended March 31, 2006 and 2005 and for the years ended December 31, 2005, 2004 and 2003 give effect to the acquisition as if it had been completed on January 1, 2003. The Unaudited Pro Forma Condensed Combined Balance Sheet data as of March 31, 2006 give effect to the acquisition as if it had been completed on that date.

We have prepared the selected Unaudited Pro Forma Condensed Combined Financial Data based on available information using assumptions that management believes are reasonable. The selected Unaudited Pro Forma Condensed Combined Financial Data are being provided for informational purposes only. They do not purport to represent Bruker BioSciences’ actual financial position or results of operations had the acquisition occurred on the dates specified nor do they project Bruker BioSciences’ results of operations or financial position for any future period or date.

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The selected Unaudited Pro Forma Condensed Combined Statements of Operations data do not reflect any adjustments for nonrecurring items or anticipated operating synergies resulting from the acquisition. In addition, pro forma adjustments are based on certain assumptions and other information that is subject to change as additional information becomes available. Accordingly, the adjustments included in Bruker BioSciences’ financial statements published after the completion of the acquisition will vary from the adjustments included in the unaudited pro forma condensed combined financial data included in this proxy statement.

The selected Unaudited Pro Forma Consensed Combined Data does not include any adjustments for liabilities resulting from integration planning, as management of Bruker BioSciences and Bruker Optics are in the process of making these assessments, and estimates of these costs, if any, are not currently known. Bruker BioSciences may incur restructuring charges upon completion of the acquisition or in subsequent quarters for severance or relocation costs related to Bruker BioSciences employees, costs of vacating some facilities (leased or owned) or other costs associated with exiting activities of Bruker BioSciences.

The selected Unaudited Pro Forma Condensed Combined Financial Data should be read in conjunction with the Bruker BioSciences and Bruker Optics audited and unaudited historical financial statements and related notes as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  See “WHERE YOU CAN FIND MORE INFORMATION on page 97.

 

 

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COMPARATIVE PER SHARE INFORMATION

The following table sets forth selected historical per share information of Bruker BioSciences and Bruker Optics and unaudited pro forma consolidated per share information as of the three months ended March 31, 2006 and 2005 and for the years ended December 31, 2005, 2004 and 2003, giving effect to the transactions described in the stock purchase agreement as if they had occurred on January 1, 2003.

The historical book value per share is computed by dividing stockholders’ equity by the actual common stock outstanding. The pro forma per share net income (loss) from continuing operations is computed by dividing the pro forma net income (loss) from continuing operations by the pro forma weighted average number of shares outstanding, assuming Bruker BioSciences had acquired Bruker Optics at the beginning of the earliest period presented. The pro forma combined book value per share is computed by dividing total pro forma stockholders’ equity by the pro forma number of common shares outstanding, assuming the acquisition had occurred on that date.

The following information should be read in conjunction with the separate audited historical consolidated financial statements and related notes of Bruker BioSciences and Bruker Optics, the unaudited pro forma condensed combined financial information and related notes of Bruker BioSciences and the selected historical and selected unaudited pro forma financial data, either included or incorporated by reference into this proxy statement. See “Where You Can Find More Information” beginning on page 97 and “Bruker Optics Management’s Discussion and Analysis of Financial Condition and Results of Operations” beginning on page 60. The pro forma information is presented for illustrative purposes only and is not necessarily indicative of the operating results or financial position that would have occurred if the acquisition of Bruker Optics had been consummated as of the beginning of the earliest period presented, nor is it necessarily indicative of the future operating results or financial position of the combined company.

 

 

 

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PER SHARE MARKET PRICE DATA AND DIVIDEND INFORMATION

Bruker BioSciences common stock has been traded on the Nasdaq National Market since August 4, 2000. There was no public market for Bruker BioSciences common stock prior to that date. Bruker Optics common stock is not, and has never been, traded publicly. The following table sets forth, for the periods indicated, the high and low per share prices for Bruker BioSciences common stock as reported on the Nasdaq National Market.  The prices reflect inter-dealer prices and do not include retail markups, markdowns or commissions.

 

Recent Share Price

On April 17, 2006, the last trading day before the acquisition was announced, the closing price of Bruker BioSciences common stock as reported on the Nasdaq National Market was $4.97 per share. The closing sale price of Bruker BioSciences common stock as reported on the Nasdaq National Market on May 12, 2006 was $5.20 per share. As of that date there were 94 holders of record of Bruker BioSciences common stock based on information provided by our transfer agent. The number of stockholders of record does not reflect the actual number of individual or institutional stockholders that own Bruker BioSciences common stock because most stock is held in the name of nominees. There are a substantially greater number of beneficial owners of Bruker BioSciences common stock.

The information above shows only historical prices. No assurances can be given as to the market prices of Bruker BioSciences common stock at any other time before or after the consummation of the acquisition.

Dividend Information

Neither Bruker BioSciences nor Bruker Optics has ever declared or paid cash dividends on its common stock. If the acquisition is not consummated, Bruker Optics anticipates that it would continue its policy of retaining any and all earnings to finance the operation and expansion of its business. Bruker BioSciences currently anticipates that it will retain all available funds for use in its business and does not anticipate paying any cash dividends in the foreseeable future, whether or not the acquisition is consummated.

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RISK FACTORS

In addition to the other information included or incorporated by reference in this proxy statement, including the Risk Factors contained in Bruker BioSciences’ Annual Report on Form 10-K and Quarterly Report on Form 10-Q, you should carefully consider the matters described below relating to the proposed acquisition of Bruker Optics in deciding whether or not to vote for the proposals presented in this proxy statement. Additional risks and uncertainties not presently known to Bruker BioSciences or that are not currently believed to be material, if they occur, also may adversely affect the proposed acquisition of Bruker Optics and/or the combined company post-acquisition.

Although Bruker BioSciences expects that the acquisition of Bruker Optics will result in benefits to Bruker BioSciences, the combined company may not realize those benefits because of integration difficulties and other challenges.

The success of the acquisition of Bruker Optics will depend, in part, on the ability of Bruker BioSciences to realize the potential synergies, cost savings and growth opportunities from integrating the business of Bruker Optics with the business of Bruker BioSciences. Bruker BioSciences’ success in realizing these benefits and the timing of this realization depends upon the successful integration of the operations of Bruker Optics. The difficulties of combining the operations of Bruker Optics with those of Bruker BioSciences’ operating subsidiaries, Bruker AXS and Bruker Daltonics, include, among others:

·       consolidating research and development operations while preserving the research and development activities and important relationships of Bruker Optics, Bruker AXS and Bruker Daltonics;

·       retaining key employees;

·       consolidating corporate and administrative infrastructures;

·       integrating and managing the technology of the companies;  and

·       minimizing the diversion of management’s attention from ongoing business concerns.

Bruker BioSciences cannot assure you that the integration of Bruker Optics will result in the realization of the full benefits which the company anticipates will result from the acquisition.

The market price of Bruker BioSciences common stock may decline as a result of the acquisition of Bruker Optics.

The market price of Bruker BioSciences’ common stock may decline as a result of the acquisition of Bruker Optics if:

·       Bruker BioSciences does not achieve the perceived benefits of the acquisition as rapidly as, or to the extent anticipated by, financial or industry analysts; or

·       The effect of the acquisition on Bruker BioSciences’ financial results is not consistent with the expectations of financial or industry analysts.

Accordingly, investors may experience a loss as a result of a decreasing stock price and Bruker BioSciences may not be able to raise future capital, if necessary, in the equity markets.

Some directors and executive officers of Bruker BioSciences have interests in the acquisition of Bruker Optics that may differ from or are in addition to the interests of Bruker BioSciences stockholders, including, if the acquisition is completed, the receipt of financial and other benefits.

Our chief executive officer and chairman of the board, Frank  H. Laukien, and certain of his family members own stock in both Bruker BioSciences and Bruker Optics. Dr. Laukien and his related family members own 98.63% of the shares of Bruker Optics being acquired by Bruker BioSciences. The actual

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number of shares that will be issued to Bruker Optics stockholders, including Dr. Laukien and his related family members, will be determined based on the average of closing prices per share of Bruker BioSciences common stock on the Nasdaq National Market for a period of 10 consecutive trading days ending three days before the closing date, which is referred to as the trailing average. If the closing date were on May [  ], 2006, we would have issued [         ] shares of our common stock to the Bruker Optics stockholders based on a trailing average of $[    ] per share. Using this assumed date, following the acquisition, Dr. Laukien and his related family members would own, in the aggregate, approximately [   ]% of the outstanding shares of common stock of Bruker BioSciences. In addition, Dr. Laukien’s half brother, Dirk D. Laukien, is the President of Bruker Optics and, following Bruker BioSciences’ acquisition of Bruker Optics, will become a senior vice president of Bruker BioSciences and, in connection with his new role, will receive a grant of 500,000 shares of Bruker BioSciences restricted common stock. In addition, immediately prior to the acquisition, Bruker Optics may make a one time $2.5 million bonus payment to Dirk D. Laukien. Although the Bruker BioSciences’ board of directors appointed an independent special committee to determine the advisability of and to negotiate the terms of the transaction, you should take the potential conflicts of interest of the Laukien family into account when considering the recommendations of the special committee and of the board of directors.

The acquisition of Bruker Optics is subject to the receipt of consents and approvals from government entities that may not be received or that may impose conditions that could have an adverse effect on Bruker BioSciences following the completion of the acquisition.

We cannot complete the acquisition of Bruker Optics unless we and Bruker Optics receive various consents, orders, approvals and clearances from antitrust and other authorities in the United States. While we believe we will receive the requisite regulatory approvals from these authorities, there can be no assurance of this. In addition, the authorities may impose conditions on the completion of the acquisition  or require changes to the terms of the acquisition. For example, the authorities may require divestiture of certain assets as a condition of closing the acquisition of Bruker Optics. Bruker BioSciences is not obligated to agree to divest material assets in order to obtain regulatory approval of the proposed acquisition of Bruker Optics. While Bruker BioSciences does not currently expect that any such conditions or changes would be imposed, there can be no assurance that they will not be, and such conditions or changes could have the effect of delaying completion of the acquisition of Bruker Optics or imposing additional costs on Bruker BioSciences.

The issuance of approximately [   ] million shares of Bruker BioSciences common stock to Bruker Optics stockholders in the acquisition will substantially reduce the percentage interests of Bruker BioSciences stockholders.

If the acquisition is completed, approximately [   ] million shares of Bruker BioSciences common stock will be issued to current Bruker Optics stockholders, and former Bruker Optics stockholders will own approximately [   ]% of the outstanding common stock of Bruker BioSciences after the acquisition. The issuance of these shares to current Bruker Optics stockholders will cause a reduction in the relative percentage interests of current Bruker BioSciences stockholders in earnings, voting, liquidation value and book and market value. The issuance of shares of Bruker BioSciences common stock at any implied premium would likely result in dilution to the market price of Bruker BioSciences common stock. The issuance of additional shares in future transactions could further reduce the percentage interests of current Bruker BioSciences stockholders and Bruker Optics stockholders.

CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed

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investment decisions. This proxy statement contains such “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be made directly in this proxy statement, and they may also be made a part of this proxy statement by reference to other documents filed with the Securities and Exchange Commission by Bruker BioSciences, which is known as “incorporation by reference.” These statements may include statements regarding the period following completion of the acquisition. Words such as “anticipate,” “estimate,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance used in connection with any discussion of future operating or financial performance, or the acquisition of Bruker Optics by Bruker BioSciences, identify forward-looking statements. All forward-looking statements are management’s present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements, including the risks described under “Risk Factors” in this proxy statement and in our Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Stockholders are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this proxy statement or the date of the document incorporated by reference in this proxy statement. Bruker BioSciences is not under any obligation, and expressly disclaims any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

For additional information about factors that could cause actual results to differ materially from those described in the forward-looking statements, please see the quarterly reports on Form 10-Q and the annual reports on Form 10-K that Bruker BioSciences has filed with the Securities and Exchange Commission.

All subsequent forward-looking statements attributable to Bruker BioSciences or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

STOCKHOLDER MEETING

This Proxy Statement and the enclosed Proxy Card are furnished in connection with the solicitation of proxies by the board of directors of Bruker BioSciences for use at the 2006 Annual Meeting of Stockholders (the “Annual Meeting”) and at any adjournment thereof. The approximate date on which this Proxy Statement and form of proxy are first being sent to stockholders is May 26, 2006.

Date, Time and Place of Stockholder Meeting

As set forth in the notice of meeting, the Bruker BioSciences 2006 Annual Meeting of Stockholders is scheduled to be held on June 29, 2006 at 9 a.m. at the office of Nixon Peabody LLP, 100 Summer Street, Boston, Massachusetts.

Purpose

The stockholder meeting is being held so that stockholders may consider and vote on:

·       a proposal to approve the transactions contemplated by the stock purchase agreement, dated as of April 17, 2006, by and among Bruker BioSciences, Bruker Optics Inc. and the stockholders of Bruker Optics relating to the acquisition of Bruker Optics by Bruker BioSciences, including the issuance of shares in connection with the acquisition;

·       a proposal  to approve an amendment to the certificate of incorporation increase the authorized share capital, contingent upon approval of the transactions described above;

·       a proposal to approve an amendment to our stock option plan to increase the number of shares of common stock for which options or shares of restricted common stock may be granted under the plan;

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·       a proposal to elect three Class III directors to hold office until the 2009 Annual Meeting of Stockholders; and

·       a proposal to ratify the selection of Ernst & Young LLP as Bruker BioSciences’ independent registered public accounting firm.

Record Date

Only stockholders of record at the close of business on May 8, 2006 are entitled to notice of and to vote at the Annual Meeting. On May 8, 2006, Bruker BioSciences had outstanding and entitled to vote 90,074,933 shares of common stock. Each outstanding share of common stock entitles the record holder to one vote. Votes will be tabulated by our transfer agent and the inspector of elections, who will be one of our employees or one of our attorneys.

Vote Required for Approval

Acquisition and Share Issuance.   The transactions contemplated by the stock purchase agreement, including the share issuance, must be approved by the affirmative vote of the holders of a majority of the shares of Bruker BioSciences common stock present or represented by proxy at the Annual Meeting and entitled to vote. The transactions contemplated by the stock purchase agreement must also be approved by the affirmative vote of holders of shares of Bruker BioSciences common stock who are unaffiliated with the five Laukien family members and who represent at least a majority of the total votes cast by these unaffiliated holders at the Annual Meeting.

Amendment to Certificate of Incorporation.   The affirmative vote of the holders of a majority of the shares of Bruker BioSciences common stock outstanding as of the record date is required to adopt and approve the amendment to the certificate of incorporation.

Amendment to Stock Option Plan.   The affirmative vote of the holders of a majority of the shares of Bruker BioSciences common stock present or represented by proxy at the Annual Meeting and entitled to vote is required to approve the amendment to the Amended and Restated 2000 Stock Option Plan.

Elections of Directors.   Directors shall be elected by a plurality of the votes of the shares of common stock present in person or represented by proxy at the Annual Meeting and entitled to vote, which means that the three directors who receive the highest number of affirmative votes will be elected.

Ratification of Independent Auditors.   Ratification of the independent auditors of Bruker BioSciences for the current year will require the affirmative vote of a majority of the shares of the common stock present or represented and entitled to vote at the Annual Meeting.

As of the record date, Bruker BioSciences directors and executive officers and their affiliates owned 58.44% of the outstanding shares of Bruker BioSciences’ common stock. Five stockholders, including Frank H. Laukien, who are parties to the stock purchase agreement, have covenanted under the terms of the stock purchase agreement to vote all of their shares of Bruker BioSciences in favor of the acquisition and related share issuance. These shares represent 57.79% of the voting power of Bruker BioSciences entitled to vote at the stockholder meeting and, under our bylaws and NASD rules, are sufficient to approve the proposal regarding the acquisition and related share issuance. However, the terms of the stock purchase agreement provide, that the transactions contemplated by the stock purchase agreement are subject to approval by holders of shares of Bruker BioSciences common stock who are unaffiliated with the five Laukien family members and who represent at least a majority of the total votes cast by these unaffiliated holders at the Annual Meeting.

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Voting of Proxies; Quorum; Abstentions and Broker Non-Votes

If the enclosed Proxy Card is properly executed and returned, it will be voted in the manner directed by the stockholder. If no instructions are specified with respect to any particular matter to be acted upon, proxies will be voted in favor of such matter. In addition, if other matters come before the meeting, the persons named in the accompanying proxy and acting thereunder will have discretion to vote on those matters in accordance with their best judgment. Any person signing the enclosed form of proxy has the power to revoke it by voting in person at the meeting, by giving written notice of revocation to the Secretary of Bruker BioSciences at 40 Manning Road, Billerica, Massachusetts 01821 at any time before the proxy is exercised or by granting a subsequently dated proxy. Please note, however, that if your shares are held of record by a broker, bank or nominee and you wish to vote at the meeting, you will not be permitted to vote in person unless you first obtain a proxy issued in your name from the record holder.

The holders of a majority in interest of all of the Bruker BioSciences’ common stock, par value $.01 per share, issued, outstanding and entitled to vote are required to be present in person or be represented by proxy at the Annual Meeting in order to constitute a quorum for the transaction of business. Each share of common stock outstanding on the record date will be entitled to one vote on all matters.

Because abstentions with respect to any matter are treated as shares present or represented and entitled to vote for the purposes of determining whether that matter has been approved by the stockholders, abstentions have the same effect as negative votes for each proposal other than the election of directors and the vote by unaffiliated stockholders relating to the acquisition and share issuance. Broker non-votes are not deemed to be present or represented for purposes of determining whether stockholder approval of that matter has been obtained, but they are counted as present for purposes of determining the existence of a quorum at the Annual Meeting.

Solicitation of Proxies

Bruker BioSciences will bear the cost of the solicitation. Although it is expected that the solicitation will be primarily by mail, regular employees or representatives of Bruker BioSciences (none of whom will receive any extra compensation for their activities) may also solicit proxies by telephone, telecopier and in person and arrange for brokerage houses and other custodians, nominees and fiduciaries to send proxies and proxy materials to their principals at the expense of Bruker BioSciences.

Recommendations of the Board of Directors and Special Committee

The board of directors of Bruker BioSciences and the independent special committee appointed by the board of directors unanimously determined that the stock purchase agreement and the transactions contemplated by the stock purchase agreement, including the acquisition of Bruker Optics are advisable, voted to approve the stock purchase agreement and recommends that the stockholders vote FOR the transactions contemplated by the stock purchase agreement, including the issuance of shares of Bruker BioSciences common stock in connection with the acquisition of Bruker Optics, FOR the amendment to the certificate of incorporation, FOR the amendment to the Amended and Restated 2000 Stock Option Plan, FOR the directors nominated for re-election and FOR the ratification of Ernst & Young as Bruker BioSciences’ independent registered public accounting firm.

Bruker BioSciences’ principal executive offices are located at 40 Manning Road, Billerica, Massachusetts 01821, and our telephone number is (978) 663-3660.

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PROPOSAL NO. 1  THE ACQUISITION AND THE ISSUANCE OF SHARES IN CONNECTION WITH THE ACQUISITION

This section of the proxy statement describes material aspects of the proposed acquisition, including the stock purchase agreement and the related issuance of Bruker BioSciences shares of common stock. While we believe that the description covers the material terms of the acquisition, this summary may not contain all of the information that is important to you. You should read this entire proxy statement and the other documents which are attached or incorporated by reference carefully for a more complete understanding of the acquisition.

General

Bruker BioSciences’ board of directors is using this proxy statement to solicit proxies from the holders of Bruker BioSciences common stock for use at the Bruker BioSciences Annual Meeting.

Proposals

At the Annual Meeting, holders of Bruker BioSciences common stock are being asked to vote on, among other things, the acquisition of Bruker Optics and the issuance of shares of Bruker BioSciences common stock in connection with the acquisition.

The acquisition will not be completed unless Bruker BioSciences’ stockholders approve the acquisition and the issuance of shares of Bruker BioSciences common stock in connection with the acquisition.

Background of the Acquisition

From time to time, the boards of directors of each of Bruker BioSciences and Bruker Optics have separately considered strategic alternatives and business combinations.

On October 31, 2005, at a meeting held at Bruker BioSciences, Dirk Laukien, the President and Chief Executive officer of Bruker Optics, informed Frank Laukien,  Jörg Laukien, a board member of Bruker BioSciences, and Richard Stein of Nixon Peabody, outside counsel to Bruker BioSciences and Bruker Optics, a board member of Bruker BioSciences and the secretary of Bruker BioSciences and Bruker Optics, that Dirk Laukien had a possible interest in selling Bruker Optics and that he had begun discussions with another company regarding the sale of Bruker Optics.

In November, 2005, Bill Knight, the Chief Financial Officer of Bruker BioSciences had a number of meetings, telephone conversations and emails with Dirk Laukien and Jonathan Hitchcock, the Treasurer and Controller of Bruker Optics, regarding a possible transaction between Bruker BioSciences and Bruker Optics. A meeting between Dirk Laukien and Bill Knight on this topic occurred on November 14.

In November, 2005, Frank Laukien, Isolde Laukien, Marc Laukien, Dirk Laukien and Jörg Laukien, the majority owners of both Bruker BioSciences and Bruker Optics, discussed a potential transaction between Bruker BioSciences and Bruker Optics. At this time, these stockholders decided that the feasibility, desirability and structural/tax consequences of such an acquisition should be explored.

On November 22, 2005, Frank Laukien informed Bill Linton, as Lead Director of Bruker BioSciences, of the existence of the discussions regarding the potential acquisition of Bruker Optics by Bruker BioSciences and, due to the related-party nature of the potential acquisition, asked Mr. Linton to become involved. At this time Mr. Linton expressed his willingness to become involved in exploring the possibility of an acquisition of Bruker Optics. Mr. Linton and Frank Laukien discussed the potential benefits and risks associated with the transaction. Frank Laukien suggested that Mr. Linton contact Bruker Optics management for further discussions.

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During the week of November 22, 2005, Bill Linton and Dirk Laukien spoke by telephone. They discussed the potential acquisition, the potential synergies between the two companies, and the motivations for all parties to consider the idea of moving forward with the potential acquisition.

On December 1, 2005, a conference call occurred among Frank Laukien, Bill Linton, Richard Stein, Brian Monahan and Bill Knight to discuss a possible acquisition of Bruker Optics and a dinner meeting Mr. Linton was going to have with Dirk Laukien on December 4.

On December 4, 2005, Bill Linton, Dirk Laukien and Bill Knight had a dinner meeting and discussed a possible transaction.

During November and December, 2005, there were numerous internal discussions and emails among Brian Monahan, Corporate Controller of Bruker BioSciences, Bill Knight, Bill Linton, Frank Laukien and Richard Stein regarding a possible Bruker Optics transaction.

On January 9, 2006, Frank Laukien sent Bill Linton materials regarding a possible Bruker Optics transaction.

On January 10, 2006, Frank Laukien informed the board of directors of Bruker BioSciences of a possible transaction, providing certain background information and scheduling a board conference call for January 12, 2006.

On January 10, 2006, Nixon Peabody provided Frank Laukien preliminary thoughts regarding a Bruker Optics deal structure.  Specifically, Nixon Peabody addressed potential deal structures, tax implications and the process of acquiring an affiliated private company.

On January 10 and 11, 2006, numerous emails were exchanged between Frank Laukien and members of the Bruker BioSciences board regarding the rationale for a possible transaction.

On January 12, 2006, the Bruker BioSciences board of directors held a special meeting by conference call to discuss the potential acquisition of Bruker Optics. The board engaged in an extensive discussion regarding the rationale for the possible acquisition and strategic alternatives. Among the topics discussed were synergies, the reaction of institutional investors, the Bruker Optics financial results and the Bruker Optics forecast. Mr. Linton described his involvement in discussions with Bruker Optics due to his role as Lead Director. The various conflicts present in connection with a possible transaction with Bruker Optics were discussed, and it was the sense of the board that if the matter were to proceed, it should do so under the auspices of the independent directors. As a result the board of directors created a special committee consisting of William Linton, Lead Director of the board of directors, as chairman of the special committee, M. Christopher Canavan, Jr., Taylor Crouch and Daniel Dross. All members of the special committee are independent directors, within the meaning of the listing standards of the Nasdaq Stock Market, and are unaffiliated with the Laukien family. The tasks of the special committee were: (i) to consider the advisability of the proposed acquisition of Bruker Optics, (ii) if it concluded the acquisition was advisable, to negotiate on behalf of Bruker BioSciences the terms of the acquisition and (iii) to recommend to the board of directors of Bruker BioSciences whether the acquisition was in the best interests of the stockholders of Bruker BioSciences who are not affiliated with the Laukien family. The special committee was authorized to retain its own financial and legal advisors to assist it in discharging those responsibilities. The board determined that the special committee should meet during the week of January 16 to determine whether to continue exploring a potential acquisition of Bruker Optics.

Shortly thereafter, the special committee retained Bear, Stearns & Co. Inc. as its financial advisor and Dewey Ballantine LLP as its legal advisor. Both Bear Stearns and Dewey Ballantine had provided advice to a special committee of the board of directors of Bruker Daltonics in connection with its merger with Bruker AXS in 2003.

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On January 15, 2006, Frank Laukien notified Dirk Laukien of the interest of Bruker BioSciences in a possible transaction, the pending appointment of the special committee and the next steps.

On January 25, 2006, Bruker Optics made a telephonic and powerpoint webex presentation to Bear Stearns regarding Bruker Optics’ business and financials.

On January 26, 2006, Frank Laukien provided Bear Stearns information regarding the various percentages of stock and cash which the Laukien family members would desire in a possible transaction.

On January 27, 2006, the special committee met with Bear Stearns to discuss the preliminary pre-due diligence valuation of Bruker Optics and strategic rationale perspectives on a potential acquisition.

On January 30, 2006, Nixon Peabody provided a suggested form of letter of intent for the transaction to the special committee and counsel for the special committee.

On January 31, 2006, Nixon Peabody provided its thoughts on a possible deal structure to the special committee and counsel for the special committee.

That same day, during a Bruker BioSciences board conference call, the board formally confirmed the appointment of the special committee and decided to commence formal discussions with Bruker Optics regarding a possible acquisition of all of the outstanding stock of Bruker Optics by Bruker BioSciences. During the meeting, Mr. Linton presented the background of the possible acquisition of Bruker Optics, together with an update on informal discussions regarding this topic which had occurred among the independent directors. Mr. Linton described the various issues which had been considered by the independent directors and their conclusion that, based upon preliminary analysis done by Bear Stearns, it would be worthwhile to continue exploring the possibility of such an acquisition. Mr. Linton also described the various issues which needed to be examined in detail prior to proceeding with a transaction with Bruker Optics.

On February 2, 2006, representatives of the special committee and Dewey Ballantine attended an online due diligence presentation of Bruker Optics management.

On February 3, 2006, representatives of the special committee and Dewey Ballantine met to discuss the draft letter of intent and special committee compensation and indemnification.

On February 6, 2006, a non-binding letter of intent was submitted by the special committee to Dirk Laukien. At the same time, Dirk Laukien informed Bruker BioSciences that Bruker Optics had received an all cash offer from the other party with whom he had been negotiating. The amount of the other party’s offer was higher than the final offer made by Bruker BioSciences, which was ultimately accepted by Bruker Optics. The offer was from a well established company which fully possessed the necessary liquidity and other requirements for this type of an offer. This offer was the result of months of discussions between Bruker Optics and the party making the offer and was treated by Bruker Optics as being an extremely serious, well qualified offer.

On February 7 and February 8, 2006, a series of calls and emails among Bruker BioSciences management represented by Bill Knight and Frank Laukien and Bruker Optics management represented by Dirk Laukien occurred regarding integration and related matters.

On February 9, 2006, a meeting occurred at Bill Linton’s office in Madison, Wisconsin among Bill Linton, Dirk Laukien and Frank Laukien regarding the many elements of a possible transaction and Dirk Laukien’s role in Bruker BioSciences on a going forward basis.

On February 10, 2006, calls and emails between Bill Knight and Jonathan Hitchcock occurred regarding diligence and related matters.

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That same day, a conference call occurred among the Laukien family members in their capacity as majority stockholders of Bruker Optics where they informally approved the transaction as discussed on February 9, 2006 among Dirk Laukien, Bill Linton and Frank Laukien.

On February 13, 2006, a revised form of the letter of intent was presented by the special committee to Bruker Optics management.

On February 14, 2006, the non-binding letter of intent was executed by all parties.

On February 15, 2006, at a regular meeting of the Bruker BioSciences board, Bill Linton updated the board on the activities of the special committee. Bill Linton described what had been accomplished to date and what remained to be done.

On February 21, 2006, the special committee and the management of each of Bruker BioSciences and Bruker Optics, as well as their respective legal and financial advisors, met in Billerica, Massachusetts. Members of management of each company made presentations regarding their respective businesses and a potential transaction involving the two companies.

On February 22, 2006, at a regular meeting of the Bruker BioSciences board, Bill Linton gave an update on the status of the potential acquisition and Frank Laukien presented a plan for the integration of Bruker BioSciences and Bruker Optics if the acquisition were to be consummated. A detailed discussion occurred in connection with Frank Laukien’s presentation.

That same day, Bruker BioSciences issued a press release announcing its 2005 financial results.

On March 17, 2006, the special committee and representatives of Dewey Ballantine met to discuss legal due diligence, and a proposed form of stock purchase agreement.

That same day, Bear Stearns and Bruker Optics management met telephonically to review Bruker Optics’ preliminary fiscal year 2005 financials.

In addition, on March 17, 2006, a draft stock purchase agreement was transmitted to Bruker Optics and its counsel by Dewey Ballantine.

On March 21, 2006, Bear Stearns and Bruker Optics management met in Billerica, Massachusetts to perform financial due diligence and review assumptions with respect to Bruker Optics’ financial projections. Bear Stearns also met with Bruker BioSciences in Billerica, Massachusetts to discuss Bruker BioSciences’ management’s due diligence review of Bruker Optics and certain integration matters.

On March 22, 2006, representatives of Dewey Ballantine, Nixon Peabody and Bruker Optics’ counsel met at Dewey Ballantine’s offices in New York.

On March 23, 2006, the special committee and its advisors received the comments of Dirk Laukein.

That same day, Bear Stearns met with William Knight and Brian Monahan in Billerica, Massachusetts to review the financial projections of Bruker Optics and Bruker BioSciences, as well as potential synergies in respect of a potential acquisition.

On March 28, 2006, the special committee met with representatives of Dewey Ballantine and Bear Stearns to discuss the negotiations of the stock purchase agreement. In addition, representatives of Dewey Ballantine and Bear Stearns delivered legal and financial due diligence reports to the special committee, including a review of Bruker Optics’ preliminary 2005 financial results and its projections.

On April 4, 2006, the special committee met with representatives of Bruker BioSciences management, Dewey Ballantine and Bear Stearns. Bruker BioSciences management delivered a report on operational due diligence. Dewey Ballantine and Bear Stearns provided legal and financial due diligence updates and updates regarding the ongoing negotiation of the stock purchase agreement.

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On April 5, 2005, a revised stock purchase agreement was circulated by Dewey Ballantine.

On April 6, 2006, the special committee and its advisors received further comments to the draft stock purchase agreement from Dirk Laukien.

On April 11, 2006, a revised stock purchase agreement was circulated by Dewey Ballantine.

On April 13, 2006, representatives of Dewey Ballantine received the comments to the draft stock purchase agreement from Frank Laukien.

That same day, the special committee met with representatives of Bruker BioSciences management, Dewey Ballantine, Bear Stearns and Ernst & Young. Ernst & Young delivered a report on accounting and tax due diligence. Bruker BioSciences management, Dewey Ballantine and Bear Stearns provided final due diligence reports. The special committee discussed ongoing negotiation of the stock purchase agreement.

On April 14, 2006, a final version of the stock purchase agreement was circulated by Dewey Ballantine.

On April 17, 2006, the Bruker BioSciences board of directors, including the special committee, met telephonically with representatives of Bruker BioSciences management, Dewey Ballantine and Bear Stearns to consider the acquisition. Dewey Ballantine provided a review of the directors’ fiduciary duties and a summary of the terms of the transaction. Bear Stearns provided a detailed presentation of the transaction and delivered its oral opinion, which was subsequently confirmed in writing, that as of April 17, 2006, and based upon and subject to the assumptions, qualifications and limitations set forth in the written opinion, the consideration to be issued in the acquisition was fair, from a financial point of view, to the holders of Bruker BioSciences shares, excluding the holders of Bruker BioSciences shares who also own Bruker Optics shares. Bill Linton then summarized the activities of the special committee. Following Bill Linton’s summary, the special committee met in executive session and voted to proceed with the transaction. The special committee then rejoined the board meeting and Bill Linton reported on its vote, after which the independent members of the board also unanimously voted in favor of the transaction and recommended that it be approved and adopted by the stockholders of Bruker BioSciences.

Reasons for the Acquisition

The Bruker BioSciences board of directors and the Bruker BioSciences special committee considered a number of factors and additional benefits for Bruker BioSciences’ stockholders that could result from the acquisition. These additional factors and potential benefits include:

·       The complementary nature of the business of Bruker BioSciences’ subsidiaries, Bruker Daltonics and Bruker AXS, and Bruker Optics would allow for potential strategic benefits, including the fact that Bruker BioSciences would become more of a leading tools supplier for life science and materials research and would offer a broader technology base and an increased distribution, sales and service infrastructure;

·       Acquiring Bruker Optics would allow Bruker BioSciences to increase its critical mass competitively and improve its worldwide geographical distribution coverage in the Americas, Europe and Asia; and

·       The oral opinion of Bear Stearns to the Bruker BioSciences special committee on April 17, 2006, subsequently confirmed by a written opinion, also dated April 17, 2006, that, as of April 17, 2006, and based upon and subject to the assumptions, qualifications, and limitations set forth therein, the consideration to be issued in the acquisition was fair, from a financial point of view, to the holders of Bruker BioSciences shares, excluding the holders of Bruker BioSciences shares who also own Bruker Optics shares. The full text of Bear Stearns’ written opinion, dated April 17, 2006, which sets

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forth the assumptions made, matters considered and limitations on the review undertaken by Bear Stearns, is attached hereto as Annex B and is incorporated into this proxy statement by reference.

In addition, the Bruker BioSciences board of directors took into consideration the unanimous recommendation of the Bruker BioSciences special committee.

The Bruker BioSciences board of directors and the Bruker BioSciences special committee also identified a number of risks and uncertainties in its deliberations concerning the acquisition, including the following:

·       The fact that Bruker Optics is a focused independent entity and the integration of Bruker Optics into Bruker BioSciences could harm the entrepreneurial spirit of Bruker Optics;

·       The need to integrate Bruker Optics into Bruker BioSciences’ financial and information systems;

·       The risk of diverting management focus and resources from other strategic opportunities and from operational matters while working to implement the acquisition; and

·       The risk that the acquisition would not be consummated.

The foregoing discussion of the factors considered by the Bruker BioSciences board of directors and the special committee is not intended to be exhaustive but summarizes the material factors considered by the Bruker BioSciences board of directors and the special committee in making its recommendation. In view of the wide variety of factors considered by the Bruker BioSciences board of directors and special committee, neither found it practical to and did not quantify or assign any relative or specific weights to the preceding factors or determine that any factor was of particular importance, nor did it specifically characterize any factor as positive or negative, except as described above. The Bruker BioSciences board of directors and the special committee viewed its decision and recommendation as being based on the totality of the information presented. In addition, individual members of the Bruker BioSciences board of directors and the special committee may have given differing weights to differing factors and may have viewed certain factors more positively or negatively than others. Throughout its deliberations, the Bruker BioSciences board of directors and the special committee consulted with Bruker BioSciences management and their respective legal and financial advisors.

The Bruker BioSciences board of directors and the special committee each concluded that certain of these risks could be managed or mitigated and others were unlikely to occur or have a material impact on the combined company or the acquisition, and that, on balance, the potential benefits of the acquisition outweighed the risks of the acquisition. For these reasons, the Bruker BioSciences board of directors and the special committee determined the stock purchase agreement and the transactions contemplated by it, including the issuance of Bruker BioSciences shares as a part of the consideration for the stock purchase, are advisable, fair to and in the best interests of Bruker BioSciences and its stockholders, approved (or, in the case of the Bruker BioSciences special committee, recommended approval of) the stock purchase agreement and recommended that holders of Bruker BioSciences common stock approve the transactions contemplated by the stock purchase agreement, including the issuance of Bruker BioSciences common stock in connection with the acquisition of Bruker Optics.

Recommendation of the Board of Directors and Special Committee

By unanimous vote of the Bruker BioSciences special committee, the Bruker BioSciences special committee determined that the stock purchase agreement and the transactions contemplated by it, including the issuance of Bruker BioSciences shares as a part of the consideration for the acquisition, are advisable, fair to and in the best interests of Bruker BioSciences and its stockholders, voted to recommend approval of the stock purchase agreement by the board of directors of Bruker BioSciences and recommended that holders of Bruker BioSciences common stock approve the transactions contemplated

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by the stock purchase agreement, including the issuance of Bruker BioSciences shares as a part of the consideration for the acquisition of Bruker Optics. By the unanimous vote of the members of the board of directors present at the board meeting and who voted on the transaction (all non-independent directors, namely Frank H. Laukien, Jörg Laukien, Bernhard Wangler and Richard Stein, recused themselves from voting) at the board meeting at which the stock purchase was considered and voted upon, the Bruker BioSciences board of directors determined that the stock purchase agreement as proposed and the transactions contemplated by it, including the acquisition and related issuance of shares, are advisable, fair to and in the best interests of Bruker BioSciences and its stockholders, approved the stock purchase agreement and recommended that holders of Bruker BioSciences common stock vote FOR the transactions contemplated by the stock purchase agreement, including the issuance of Bruker BioSciences common stock as part of the consideration for the acquisition of Bruker Optics.

In considering the recommendation of the Bruker BioSciences board of directors with respect to the stock purchase agreement and related issuance of shares, you should be aware that certain directors and executive officers of Bruker BioSciences may have interests in the acquisition that are different from, or are in addition to, the interests of Bruker BioSciences stockholders. Please see the section entitled “Interests of Certain Directors and Executive Officers in the Acquisition” that begins on page 35 of this proxy statement.

Opinion of Bruker BioSciences’ Financial Advisor

Pursuant to an engagement letter dated March 29, 2006, the Bruker BioSciences special committee retained Bear Stearns to act as its financial advisor with respect to a possible transaction with Bruker Optics. In selecting Bear Stearns, the Bruker BioSciences special committee considered the fact that Bear Stearns is an internationally recognized investment banking firm with substantial experience advising companies in the healthcare industry as well as substantial experience providing strategic advisory services. Bear Stearns, as part of its investment banking business, is continuously engaged in the evaluation of businesses and their debt and equity securities in connection with mergers and acquisitions; underwritings, private placements and other securities offerings; senior credit financings; valuations; and general corporate advisory services.

At the April 17, 2006 meeting of the Bruker BioSciences special committee, Bear Stearns delivered its oral opinion, which was subsequently confirmed in writing, that, as of April 17, 2006, and based upon and subject to the assumptions, qualifications and limitations set forth in the written opinion, the consideration to be issued in the acquisition was fair, from a financial point of view, to the holders of Bruker BioSciences shares, excluding the holders of Bruker BioSciences shares who also own Bruker Optics shares.

The full text of Bear Stearns’ written opinion is attached as Annex B to this proxy statement and you should read the opinion carefully and in its entirety. The opinion sets forth the assumptions made, some of the matters considered and qualifications to and limitations of the review undertaken by Bear Stearns. The Bear Stearns opinion is subject to the assumptions and conditions contained in it and is necessarily based on economic, market and other conditions and the information made available to Bear Stearns as of the date of the Bear Stearns opinion.

In reading the discussion of the fairness opinion set forth below, you should be aware that Bear Stearns’ opinion:

·       was provided to the Bruker BioSciences special committee for its benefit and use;

·       did not constitute a recommendation to the board of directors of Bruker BioSciences or the Bruker BioSciences special committee or any stockholder of Bruker BioSciences as to how to vote in connection with the acquisition of Bruker Optics or otherwise; and

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·       did not address Bruker BioSciences’ underlying business decision to pursue the acquisition of Bruker Optics, the relative merits of the acquisition as compared to any alternative business strategies that might exist for Bruker BioSciences, the financing of the acquisition or the effects of any other transaction in which Bruker BioSciences might engage.

Bruker BioSciences and the special committee did not provide specific instructions to, or place any limitations on, Bear Stearns with respect to the procedures to be followed or factors to be considered by it in performing its analyses or providing its opinion.

In connection with rendering its opinion, Bear Stearns:

·       reviewed a draft of the stock purchase agreement in substantially final form;

·       reviewed Bruker Optics’ Consolidated Financial Statements for the years ended December 31, 2004 and 2005, as audited by Ernst & Young;

·       reviewed certain operating and financial information relating to Bruker Optics’ business and prospects, including projections for the five years ended December 31, 2010, all as prepared and provided by Bruker Optics’ management (which are referred to as the Bruker Optics projections);

·       met with certain members of Bruker Optics’ senior management to discuss Bruker Optics’ business, operations, historical financial results and future prospects and the Bruker Optics projections;

·       reviewed Bruker BioSciences’ Annual Reports to Stockholders and Annual Reports on Form 10-K for the years ended December 31, 2003, 2004 and 2005 and its Current Reports on Form 8-K filed since December 31, 2005;

·       reviewed certain operating and financial information relating to Bruker BioSciences’ business and prospects, including projections for the five years ended December 31, 2010, all as prepared and provided to us by Bruker BioSciences’ management (which are referred to as the Bruker BioSciences projections);

·       reviewed certain operating and financial projections for Bruker Optics for the five years ended December 31, 2010, all as prepared and provided to us by Bruker BioSciences’ management (which are referred to as the adjusted Bruker Optics projections);

·       reviewed certain estimates of revenue enhancements, cost savings and other combination benefits expected to result from the acquisition, prepared and provided to us by Bruker BioSciences’ management (which are referred to as the potential synergies);

·       met with certain members of Bruker BioSciences’ senior management to discuss Bruker BioSciences’ and Bruker Optics’ businesses, operations, historical financial results and future prospects, the Bruker BioSciences projections, the Bruker Optics projections, the adjusted Bruker Optics projections and the potential synergies;

·       reviewed the historical stock prices, trading multiples and trading volumes of the common stock of Bruker BioSciences;

·       reviewed publicly-available financial data, stock market performance data and trading multiples of companies which we deemed generally comparable to Bruker BioSciences and Bruker Optics;

·       reviewed the terms of recent mergers and acquisitions involving companies which we deemed generally comparable to Bruker Optics;

·       performed discounted cash flow analyses based on the Bruker BioSciences projections, the adjusted Bruker Optics projections and the pro forma combined projections of Bruker BioSciences and Bruker Optics including the potential synergies;

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·       reviewed the pro forma financial results, financial condition and capitalization of Bruker BioSciences, giving effect to the acquisition; and

·       conducted such other studies, analyses, inquiries and investigations as Bear Stearns deemed appropriate.

Bear Stearns relied upon and assumed, without independent verification, the accuracy and completeness of the financial and other information provided to or discussed with it by Bruker BioSciences and Bruker Optics or obtained by it from public sources, including, without limitation, the Bruker BioSciences projections, the Bruker Optics projections, the adjusted Bruker Optics projections and the potential synergies. With respect to the Bruker BioSciences projections, the Bruker Optics projections and the adjusted Bruker Optics projections, Bear Stearns relied on representations that they were reasonably prepared on bases reflecting the best currently available estimates and judgments of the senior management of Bruker BioSciences and Bruker Optics, respectively, as to the expected future performance of Bruker BioSciences and Bruker Optics and utilized these projections in performing its review and analyses for rendering its opinion. With respect to the potential synergies, Bear Stearns relied on representations that they were reasonably prepared based on the best currently available estimates and judgments of the senior management of Bruker BioSciences as to the combination benefits expected to result from the acquisition. Bear Stearns did not assume any responsibility for the independent verification of any such information or of the Bruker BioSciences projections, the Bruker Optics projections, the adjusted Bruker Optics projections and the potential synergies provided to it, and Bear Stearns further relied upon the assurances of the senior managements of Bruker BioSciences and Bruker Optics that they are unaware of any facts that would make the information, the Bruker BioSciences projections, the Bruker Optics projections, the adjusted Bruker Optics projections and the potential synergies provided to it incomplete or misleading.

In arriving at its opinion, Bear Stearns did not perform or obtain any independent appraisal of the assets or liabilities (contingent or otherwise) of Bruker BioSciences and Bruker Optics, nor was Bear Stearns furnished with any such appraisals. Bear Stearns assumed that the transactions contemplated by the stock purchase agreement will be consummated in a timely manner and in accordance with the terms of the stock purchase agreement without any limitations, restrictions, conditions, amendments or modifications, regulatory or otherwise, that collectively would have a material effect on Bruker BioSciences or Bruker Optics, and that the final form of the stock purchase agreement will be substantially similar to the last draft reviewed by it.

Bear Stearns did not express any opinion as to the price or range of prices at which shares of common stock of Bruker BioSciences may trade subsequent to the announcement or consummation of the acquisition.

Summary of Financial Analyses

The following is a brief summary of the material financial analyses performed by Bear Stearns and presented to the Bruker BioSciences special committee and Bruker BioSciences’ board of directors in connection with rendering its fairness opinion on April 17, 2006.

Some of the financial analyses summarized below include summary data and information presented in tabular format. In order to understand fully the financial analyses, the summary data and tables must be read together with the full text of the analyses. Considering the summary data and tables alone, without considering the full narrative description of the financial analysis, could create a misleading or incomplete view of Bear Stearns’ financial analyses.

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Discounted Cash Flow Analysis.   Based on cash flow projections for Bruker BioSciences, Bruker Optics and the potential synergies expected to result in the transaction all as prepared by Bruker BioSciences, Bear Stearns performed a discounted cash flow analysis to assist the Bruker BioSciences special committee in valuing Bruker Optics, Bruker BioSciences and the pro forma combined company.

Bear Stearns performed a discounted cash flow analysis assuming:

·       for Bruker Optics, a range of illustrative discount rates of 13.5% to 15.5% and a range of terminal EBITDA multiples (based on estimated 2010 EBITDA) of 8.0x to 10.0x;

·       for Bruker BioSciences, a range of illustrative discount rates of 13.5% to 15.5% and a range of terminal EBITDA multiples (based on estimated 2010 EBITDA) of 8.0x to 10.0x; and

·       for potential synergies, a range of illustrative discount rates of 13.5% to 15.5% and illustrative perpetual growth rates of 2% to 4%.

Discounted cash flow valuations were calculated for Bruker Optics on a stand-alone basis using the adjusted Bruker Optics projections, both including and excluding potential synergies. Bear Stearns derived a range of implied equity values for Bruker Optics as follows:

 

The ranges of implied equity values in the table above compare to the purchase price of $135 million.

Discounted cash flow valuations were also calculated for Bruker BioSciences on a stand-alone basis using the Bruker BioSciences projections and for the pro forma combined company both including and excluding the potential synergies. In calculating per share values for the pro forma combined company, the number of Bruker BioScience shares to be issued in the acquisition were based on various assumed Bruker BioSciences stock prices including $4.95, the closing price on April 13, 2006, $3.11, the lowest closing price over the past 52-weeks and the trailing average price at which Bruker BioSciences has the right to terminate the acquisition, and $5.61, the highest closing price over the past 52-weeks. The actual number of Bruker BioSciences shares to be issued in the acquisition will be based on the average of the closing prices per share of Bruker BioSciences on the Nasdaq, as reported in The Wall Street Journal, for the period of ten consecutive trading days ending three days prior to the closing date.

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Bear Stearns derived a range of implied equity values per share for Bruker BioSciences and the pro forma combined company as follows:

 

Comparable Public Companies Analysis.   Bear Stearns performed a comparable public companies analysis to assist the Bruker BioSciences’ special committee in valuing Bruker Optics based on various financial multiples of selected comparable public companies in the life science instrumentation industry. In performing this analysis, Bear Stearns reviewed certain financial information relating to Bruker Optics and compared this information to the corresponding financial information of publicly-traded life science instrumentation companies which Bear Stearns deemed to be generally comparable to Bruker Optics.

Bear Stearns compared the projected financial performance and the resulting multiples as of April 13, 2006 of Bruker BioSciences and the resulting multiples of Bruker Optics at the $135 million purchase price in the transaction to eight publicly-traded life science instrumentation companies, which it deemed generally comparable to Bruker Optics. These comparable companies consisted of:

 

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Using publicly available information and market data as of April 13, 2006, and in the case of Bruker BioSciences and Bruker Optics, information based on Bruker BioSciences management estimates and using Wall Street research projections for revenue, EBITDA and EBIT and consensus estimates for EPS for the above comparable companies, Bear Stearns calculated the following harmonic mean multiples for the above public comparable companies:

 

“Harmonic mean” is calculated by taking the inverse of the average reciprocals of the multiples and gives equal weight to equal dollar investments in the securities whose ratios are being averaged. Bear Stearns utilizes the harmonic mean in averaging ratios in which price is the numerator. “Enterprise Value” is calculated as the sum of the value of the common equity on a fully diluted basis and the value of net debt, any minority interest and preferred stock. “EBITDA” is a company’s earnings before interest, taxes, depreciation and amortization. “EBIT” is a company’s earnings before interest and taxes. “EPS” is a company’s earnings per share. “Bruker BioSciences at Market” is defined as Bruker BioSciences’ enterprise value and share price based on the closing share price of the Bruker BioSciences common stock as of April 13, 2006. “Bruker Optics at Deal” is defined as Bruker Optics’ enterprise value and equity value based on the $135 million purchase price in the transaction and the value of net debt, a bonus payable to Dirk Laukien prior to closing and certain currency derivative contracts.

Precedent M&A Transaction Analysis.   Bear Stearns performed a precedent transactions analysis to assist the Bruker BioSciences’ special committee in valuing Bruker Optics based on various financial multiples of selected comparable precedent transactions in the life science instrumentation industry. In performing this analysis, Bear Stearns reviewed certain financial information relating to Bruker Optics and compared this information to the corresponding financial information of precedent transactions involving life science instrumentation companies which Bear Stearns deemed to be generally comparable to Bruker Optics.

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Bear Stearns compared the financial performance and the resulting multiples of Bruker Optics at the $135 million purchase price in the transaction to eight precedent transactions involving life science instrumentation companies, which it deemed generally comparable to Bruker Optics. These comparable precedent transactions consisted of:

 

Using publicly available information, and in the case of Bruker Optics, information based on Bruker BioSciences management estimates and using Wall Street research projections for revenue and EBITDA for the above target companies, Bear Stearns calculated the following harmonic mean multiples for the above comparable precedent transactions:

 

Contribution Analysis.   Bear Stearns performed a contribution analysis to assist the Bruker BioSciences special committee in valuing Bruker Optics based on the relative contribution of each company to the combined pro forma entity. In performing the analysis, Bear Stearns used the financial projections for Bruker BioSciences and Bruker Optics, both prepared by Bruker BioSciences’ management. Bear Stearns calculated the relative contribution by both Bruker BioSciences and Bruker Optics to the combined entity with respect to the enterprise value and equity value, based on Bruker BioSciences’ closing share price of $4.95 on April 13, 2006, an assumed Bruker BioSciences stock price of $3.11 and the $135 million purchase price in the transaction for Bruker Optics, and projected financial data including revenues, EBITDA and net income with and without giving effect to the potential synergies.

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The following table illustrates the relative contribution to revenues, EBITDA and net income of both Bruker BioSciences and Bruker Optics, without potential synergies, to the combined company:

Relative Contribution Without Potential Synergies:

 

The following table illustrates the relative contribution to revenues, EBITDA and net income of both Bruker BioSciences and Bruker Optics and giving effect to the potential synergies to the combined company:

Relative Contribution With Potential Synergies:

 

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Pro Forma Transaction Analysis.   Bear Stearns performed a pro forma transaction analysis to assist the Bruker BioSciences special committee in analyzing the financial impact of the transaction on Bruker BioSciences. Bear Stearns reviewed and analyzed certain pro forma financial impacts of the transaction on holders of Bruker BioSciences based on the following, among other items:

·       a purchase price of $135 million;

·       an assumption for analytical purposes that the trailing average price used to determine the number of Bruker BioSciences shares to be issued in the transaction would be $4.95, the closing price of Bruker BioSciences on April 13, 2006;

·       the financial projections provided to Bear Stearns by the management of Bruker BioSciences for both Bruker BioSciences and Bruker Optics;

·       an assumption for analytical purposes that the combination of Bruker BioSciences and Bruker Optics would realize pre-tax potential synergies of $2.3 million and $2.7 million in 2007 and 2008, respectively (tax-effected at a 40% tax rate); and

·       an assumption for analytical purposes that there would be no financial statement impact of potential restructuring costs or other one-time costs associated with the transaction and that the transaction was effective as of January 1, 2006.

The following table shows the projected per share accretion / (dilution) to Bruker BioSciences’ pro forma earnings including the projected synergies for the years presented.

 

Miscellaneous.   The preparation of a fairness opinion is a complex process and involves various judgments and determinations as to the most appropriate and relevant assumptions and financial analyses and the application of those methods to the particular circumstances involved. Such an opinion is therefore not readily susceptible to partial analysis or summary description, and taking portions of the analyses set out above, without considering the analysis as a whole, would in the view of Bear Stearns, create an incomplete and misleading picture of the processes underlying the analyses considered in rendering the Bear Stearns opinion. Bear Stearns based its analysis on assumptions that it deemed reasonable, including assumptions concerning general business and economic conditions and industry-specific factors. Bear Stearns did not form an opinion as to whether any individual analysis or factor, whether positive or negative, considered in isolation, supported or failed to support the Bear Stearns opinion. In arriving at its opinion, Bear Stearns considered the results of all its analyses and did not attribute any particular weight to any one analysis or factor. Bear Stearns arrived at its ultimate opinion based on the results of all analyses undertaken by it and assessed as a whole and believes that the totality of the factors considered and analyses performed by Bear Stearns in connection with its opinion operated collectively to support its determination as to the fairness of the consideration to be issued in the acquisition to the holders of Bruker BioSciences shares, excluding the holders of Bruker BioSciences shares who also own Bruker Optics shares. The analyses performed by Bear Stearns, particularly those based on estimates and projections, are not necessarily indicative of actual values or actual future results, which may be significantly more or less favorable than suggested by such analyses.

None of the public companies used in the comparable company analysis described above are identical to Bruker BioSciences or Bruker Optics, and none of the precedent transactions used in the precedent transactions analysis described above are identical to the acquisition. Accordingly, an analysis of publicly traded comparable companies and comparable precedent transactions is not mathematical; rather it

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involves complex considerations and judgments concerning the differences in financial and operating characteristics of the companies and precedent transactions and other factors that could affect the value of Bruker BioSciences and Bruker Optics and the public trading values of the companies and precedent transactions to which they were compared. The analyses do not purport to be appraisals or to reflect the prices at which any securities may trade at the present time or at any time in the future.

The Bear Stearns opinion was just one of the many factors taken into consideration by the Bruker BioSciences special committee and the Bruker BioSciences board of directors. Consequently, Bear Stearns’ analysis should not be viewed as determinative of the decision of the Bruker BioSciences special committee or of the Bruker BioSciences board of directors with respect to the fairness of the stock purchase agreement and the transactions contemplated by it, from a financial point of view, to Bruker BioSciences and the stockholders of Bruker BioSciences.

Pursuant to the terms of Bear Stearns’ engagement letter, Bruker BioSciences has agreed to pay Bear Stearns a customary transaction fee, a substantial portion of which is payable upon consummation of the transactions contemplated by the stock purchase agreement. In addition, Bruker BioSciences has agreed to reimburse Bear Stearns for reasonable out-of-pocket expenses incurred by Bear Stearns in connection with its engagement and the transactions contemplated by the stock purchase agreement, including reasonable fees and disbursements of its legal counsel. Bruker BioSciences has agreed to indemnify Bear Stearns against certain liabilities arising out of or in connection with Bear Stearns’ engagement.

Bear Stearns has been previously engaged by Bruker BioSciences to provide certain investment banking and other services for which it received customary fees. In the ordinary course of business, Bear Stearns and its affiliates may actively trade the equity and debt securities and/or bank debt of Bruker BioSciences and its respective affiliates for its own account and for the accounts of its customers and, accordingly, may at any time hold a long or short position in such securities or bank debt.

Interests of Certain Directors and Executive Officers in the Acquisition

In considering the recommendation of the board of directors of Bruker BioSciences to vote for the proposals to approve the acquisition of Bruker Optics and the issuance of shares of Bruker BioSciences common stock as part of the consideration for the Bruker Optics stock purchase, stockholders of Bruker BioSciences should be aware that some Bruker BioSciences executive officers and directors may have interests in the acquisition that may be different from, or in addition to, those of Bruker BioSciences stockholders.

Frank Laukien’s half brother, Dirk D. Laukien, is the President of Bruker Optics and, following Bruker BioSciences’ acquisition of Bruker Optics, will become a senior vice president of Bruker BioSciences. In connection with his new role, Dirk D. Laukien will also be granted 500,000 shares of Bruker BioSciences restricted common stock. In addition, immediately prior to the closing of the acquisition, Bruker Optics may make a one time $2.5 million bonus payment to Dirk D. Laukien.

In addition, our chief executive officer and chairman of the board, Frank H. Laukien, and certain of his family members, including Dirk D. Laukien and  Jörg Laukien, a member of our board of directors, own stock in both Bruker BioSciences and Bruker Optics. Dr. Laukien and his related family members own 98.63% of the shares of Bruker Optics being acquired by Bruker BioSciences. If the closing date were on May[   ], 2006, we would have issued [        ] shares of our common stock to the Bruker Optics stockholders based on a trailing average of $[    ] per share and, following the acquisition, the family member stockholders of Bruker BioSciences would own, in the aggregate, approximately [   ]% of the outstanding shares of common stock of Bruker BioSciences.

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As of May 8, 2006, the directors and executive officers of Bruker BioSciences beneficially owned 23,798,625 shares, including stock options exercisable within 60 days of May 8, 2006, representing approximately 26.4% of the outstanding shares of Bruker BioSciences common stock.

For additional information relating to affiliations of various Bruker BioSciences officers, directors and stockholders, you should read the section entitled “Certain Relationships and Related Party Transactions of Bruker BioSciences” beginning on page 69.

The Bruker BioSciences board of directors was aware of these interests during its deliberation of the merits of the acquisition and in determining to recommend to the stockholders of Bruker BioSciences that they vote for the proposal to approve the transactions contemplated by the stock purchase agreement, including the related issuance of shares of Bruker BioSciences common stock.

Completion and Effectiveness of the Acquisition

The acquisition will be completed when and if all of the conditions to completion of the acquisition are satisfied or waived.

We are working toward completing the acquisition as quickly as possible. We expect to complete the acquisition during the third calendar quarter of 2006.

Structure of the Acquisition and Operations Post-Acquisition

The transaction is structured so that Bruker BioSciences would purchase all of the outstanding stock of Bruker Optics from the Bruker Optics stockholders in a private placement. Consideration for the shares of Bruker Optics stock would consist of a combination of cash and shares of Bruker BioSciences common stock. Bruker BioSciences intends to operate Bruker Optics as a wholly-owned subsidiary alongside Bruker Daltonics and Bruker AXS.

Material United States Federal Income Tax Consequences of the Acquisition

The acquisition will not result in any material U.S. federal income tax consequences for Bruker BioSciences stockholders.

Accounting Treatment of the Acquisition

The acquisition represents a business combination of companies under common control due to the majority ownership of both companies by the five Laukiens as an affiliated stockholder group. As a result, the acquisition, as it relates to the shares owned by these affiliated stockholders, will be accounted for in a manner similar to a pooling-of-interest, or at historical carrying value. The acquisition of the shares of the non-affiliated stockholders will be accounted for using the purchase method of accounting, or at fair value, in a manner similar to acquisition of a minority interest.

Regulatory Matters

We have summarized below the material regulatory requirements affecting the acquisition. Although we have not yet received the required approvals we discuss, we anticipate that we will receive regulatory approvals sufficient to complete the acquisition by the spring of 2006.

Antitrust Considerations.   The acquisition is subject to the requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which prevents certain merger or acquistion transactions from being completed until required information and materials are furnished to the Antitrust Division of the Department of Justice and the Federal Trade Commission and specified waiting periods are terminated or expire. Bruker BioSciences and Bruker Optics filed the required information and

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materials to notify the Department of Justice and the Federal Trade Commission of the acquisition on March 28, 2006. The applicable HSR waiting period expired at 11:59 pm on April 27, 2006.

The Antitrust Division of the Department of Justice or the Federal Trade Commission may challenge the acquisition on antitrust grounds, regardless of the fact that the waiting period expired without comment. Accordingly, at any time before or after the completion of the acquisition, either the Antitrust Division of the Department of Justice or the Federal Trade Commission could take action under the antitrust laws as it deems necessary or desirable in the public interest, or other persons could take action under the antitrust laws, including seeking to enjoin the acquisition or seeking the divestiture of substantial assets of one of the parties. Additionally, at any time before or after the completion of the acquisition, notwithstanding that the applicable waiting period expired or was terminated, a private party (including an individual state) may seek to take action under the antitrust laws as it deems necessary or desirable in the public interest. Although we do not expect any conditions to be imposed by the Antitrust Division or the Federal Trade Commission, there can be no assurance that a challenge to the acquisition will not be made or that, if a challenge is made, we will prevail.

No Appraisal Rights

There are no rights of appraisal or similar rights of dissenters with respect to any matter to be acted upon under this proxy statement. Delaware law does not require that holders of Bruker BioSciences common stock who object to the share issuance and the transactions, and who vote against or abstain from voting in favor of the issuance and the transactions be afforded any appraisal or dissenters’ rights or the right to receive cash for their shares.

Foreign Regulatory Requirements

Bruker BioSciences is not aware of any material foreign governmental approvals or actions that are required to complete the acquisition. Bruker BioSciences and Bruker Optics conduct operations in a number of foreign countries, some of which have voluntary and/or post-acquisition notification systems. Should any approval or action be required, Bruker BioSciences and Bruker Optics currently plan to seek the approval or take the action required. Failure to obtain the approval or take the action is not anticipated to have a material effect on the acquisition or on Bruker BioSciences.

Restrictions on Sales of Shares Issued In Connection with the Acquisition

The shares of Bruker BioSciences common stock to be issued in connection with the acquisition will not be registered under the Securities Act of 1933 and they will not be freely transferable under the Securities Act. Bruker Optics stockholders receiving shares of Bruker BioSciences common stock in the acquisition may sell these shares pursuant to any applicable exemption under the Securities Act except that, pursuant to the terms of the stock purchase agreement, they are prohibited from selling the shares for a period of one year after the closing date of the acquisition.

THE STOCK PURCHASE AGREEMENT

The following summary of the stock purchase agreement is qualified in its entirety by reference to the complete text of the stock purchase agreement, which is incorporated by reference and attached as Annex A to this proxy statement. We urge you to read the full text of the stock purchase agreement.

General

On April 17, 2006, Bruker BioSciences, Bruker Optics and the stockholders of Bruker Optics entered into a stock purchase agreement. Under the stock purchase agreement, Bruker BioSciences will purchase all of the outstanding shares of Bruker Optics for an aggregate purchase price of approximately

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$131.3 million, payable in cash and shares of Bruker Biosciences common stock. All Bruker Optics options, whether vested or unvested, will be cancelled and all option holders will receive cash payments totaling approximately $3.7 million.

Closing Date

Unless the parties agree otherwise, the closing of the stock purchase will take place on the later of July 1, 2006 or the third business day following the satisfaction or waiver of all of the closing conditions.

Purchase Price—Payment

The stock purchase agreement provides that Bruker BioSciences shall purchase all of the outstanding shares of Bruker Optics for an aggregate purchase price of $131.3 million, which will be payable to the Bruker Optics stockholders pro rata in accordance with their respective ownership of the Bruker Optics common stock. At closing, an aggregate of approximately $75.5 million will be paid in cash, and shares of Bruker BioSciences stock with a value of approximately $55.8 will be issued to Bruker Optics stockholders.

The actual number of shares that will be issued to Bruker Optics stockholders will be determined based on the average of closing prices per share of Bruker BioSciences common stock on the Nasdaq National Market for a period of 10 consecutive trading days ending three days before the closing date, which is referred to as the trailing average. If the closing date were on May [  ], 2006, we would have issued [                      ] shares of our common stock to the Bruker Optics stockholders based on a trailing average of $[      ] per share. No fractional shares of Bruker BioSciences common stock will be issued in the acquisition.

The purchase price will be paid to Bruker Optics stockholders according to the following percentages:

 

Cancellation of Bruker Optics Stock Options

The stock purchase agreement provides that at or prior to the closing, all options outstanding under the Bruker Optics stock option plan, whether or not exercisable or vested, will be canceled and each holder of Bruker Optics options will be entitled to receive a cash payment (less any required tax withholdings) equal to the product of (1) the excess, if any, of $6.99740143712269 over the exercise price per share of the applicable option and (2) the number of shares of common stock of Bruker Optics issuable upon the exercise of such option. The aggregate amount payable to Bruker Optics option holders under the stock purchase agreement is $3.7 million.

Escrow

Working Capital Escrow.   At the closing, $1.0 million of the cash purchase price will be placed into escrow as security for any potential adjustments to the purchase price that will be made if the net working capital of Bruker Optics as of the closing is less than $9.0 million. If the net working capital of

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Bruker Optics is less than $9.0 million, then the difference shall be paid out of the working capital escrow, with any excess amounts to be paid directly by the sellers. The unused portion of the working capital escrow will be released to the sellers within 3 business days of the later of (1) the conclusion of the 20-day period following Bruker BioSciences’ delivery to the sellers of an unaudited consolidated balance sheet of Bruker Optics and its subsidiaries as of the date of the closing or (2) the resolution of any disputes regarding the consolidated balance sheet that has been raised by the sellers.

Indemnity Escrow.   At the closing, $13.5 million of the cash purchase price will be placed into escrow as security for fulfillment by the sellers of their indemnification obligations set forth in the stock purchase agreement. The unused portion of the indemnity escrow will be released to the sellers within 3 business days of the later of (1) the 30th day following the receipt by Bruker BioSciences of the audited financial statements of Bruker Optics for the fiscal year ended December 31, 2006 or (2) the resolution of any claim for indemnification of which the sellers have received notice prior to the conclusion of the 30-day period described in clause (1) of this sentence.

Representations and Warranties

The stock purchase agreement contains customary representations and warranties made by Bruker Optics and Bruker Optics stockholders to Bruker BioSciences, subject, in some cases, to specified exceptions and qualifications contained in the stock purchase agreement or in the disclosure schedule delivered in connection therewith.

The assertions embodied in those representations and warranties were made solely for purposes of the stock purchase agreement and may be subject to important qualifications and limitations. For example, many of Bruker Optics’ representations and warranties are qualified by a Material Adverse Effect standard. For purposes of the stock purchase agreement, a “Material Adverse Effect” means, any circumstance, change or effect that, individually or in the aggregate with other circumstances, changes or effects, is or is reasonably likely to materially delay or impede the consummation of the transactions contemplated by the stock purchase agreement or be materially adverse to the business, operations (including results of operations), prospects, assets, liabilities, or financial condition of Bruker Optics and its subsidiaries taken as a whole; provided, however, that none of the following, either alone or in combination, shall be considered in determining whether there has been a “Material Adverse Effect”: (1) events, circumstances, changes or effects (including legal and regulatory changes) that generally affect the industries in which each of Bruker Optics and its subsidiaries operate, other than such events, circumstances, changes or effects that disproportionately affect (relative to other industry participants) Bruker Optics or its subsidiaries and (2) changes caused by a material worsening of current conditions caused by acts of terrorism or war occurring after the date of the stock purchase agreement.

Some of the representations and warranties in the stock purchase agreement may not be accurate or complete as of any specified date or may be subject to contractual standards of materiality that differ from the standards of materiality under U.S. federal securities laws. For the foregoing reasons, you should not rely on the representations and warranties as statements of factual information.

The representations and warranties regarding Bruker Optics and its subsidiaries made to Bruker BioSciences by Bruker Optics and its stockholders relate to, among other things:

·       corporate organization, including due incorporation, good standing, corporate power and qualification to conduct business;

·       authorization, execution, delivery and performance and the enforceability of the stock purchase agreement and related matters;

·       capital structure;

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·       absence of conflicts with, or violations of, organizational documents or other obligations as a result of the consummation of the transactions contemplated by the stock purchase agreement;

·       identification of required governmental filings and consents;

·       absence of violations of any law, or necessity of any approval, as a result of the execution and delivery of, or consummation of the transactions contemplated by, the stock purchase agreement;

·       compliance with applicable laws and permits;

·       books and records;

·       delivery and accuracy of financial statements;

·       absence of undisclosed material liabilities;

·       litigation matters;

·       absence of a Material Adverse Effect and certain other material changes or events since December 31, 2005;

·       disclosure of certain contracts;

·       employee matters, employee benefit plans, employment agreements, matters relating to the Employee Retirement Income Security Act of 1974, as amended, and labor relations;

·       absence of default under material contracts;

·       absence of transactions with affiliates;

·       accounts receivable;

·       owned and leased property;

·       environmental matters;

·       tax matters;

·       intellectual property matters;

·       information technology matters;

·       bank accounts;

·       inventory;

·       insurance policies; and

·       no representation, warranty, statement or covenant made by Bruker Optics in the merger agreement contains an untrue statement of material fact or omits to state a material fact required to be stated in the merger agreement or necessary to make the statements contained in the merger agreement not misleading.

In addition, each Bruker Optics stockholder made representations and warranties to Bruker BioSciences regarding:

·       authorization, execution, delivery and performance and the enforceability of the stock purchase agreement and related matters;

·       absence of conflicts with or violations of the stock purchase agreement or any ancillary agreements;

·       litigation matters;

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