Fox Paine to Acquire Paradigm Geophysical

Paradigm Geophysical Ltd. announced that its Board of Directors approved a definitive agreement whereby Paradigm would be acquired by Paradigm Geotechnology BV in a merger transaction valued at approximately $100 million. Paradigm Geotechnology BV, a company formed to invest in energy related technology and services firms, is controlled by Fox Paine & Company, LLC, a San Francisco-based private equity firm. Under the terms of the agreement, the outstanding shares of Paradigm Geophysical will be converted into the right to receive US$5.15 per share in cash, a premium of 37.8% over Paradigm's average closing price of $3.74 over the ninety-day period ending May 21, 2002. Shareholders owning in excess of 42% of Paradigm's shares have agreed to vote in favor of the transaction. The transaction is expected to close in August 2002. Saul A. Fox, Chairman of Paradigm Geotechnology BV and Fox Paine’s Chief Executive, commented, "Our firm's principals have been active investors in the oil and gas and power industries since the mid-1980s and understand the significance of Paradigm's industry leading products and services, which enhance its customers more efficient discovery and recovery of oil and gas resources. We are pleased to be associated with the Paradigm management team, led by Mr. Eldad Weiss, who has built a dynamic, global operation serving the petroleum exploration and production industry in 18 different countries worldwide."

Eldad Weiss, Chairman and CEO of Paradigm, stated, "This transaction is a vote of confidence in our people, products and customer relationships. Going forward as a private company facilitates the long-term growth of our business. Fox Paine's financial capacity and the long-term strategic outlook will enable us to aggressively pursue our corporate goals of delivering superior technologies to our customers, expanding through acquisitions and widening our range of products and services for the oil and gas industry."

The proposed transaction is subject to customary closing conditions, including approval by Paradigm's shareholders and certain regulatory approvals. Tanner & Company acted as financial advisor to Paradigm Geophysical. Reliance Capital served as mergers and acquisitions advisor to Paradigm Geotechnology BV and Fox Paine.


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