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Mechanical Dynamics to Acquire ESTECH CAE Firm from Nissan

17 November 2000

Mechanical Dynamics to Acquire ESTECH CAE Firm from Nissan; Will Expand Presence and Meet Strong Demand in Asia/Pacific Region

    ANN ARBOR, Mich., Nov. 17 Mechanical Dynamics, Inc.
, a worldwide provider of functional virtual prototyping
software and services, announced today that it has reached a definitive
agreement with Nissan Motor of Japan and Structural Dynamics Research
Corporation (SDRC) to acquire their joint interests in ESTECH, a computer-
aided engineering (CAE) service provider based in Yokohama, Japan.
    "This acquisition fits extremely well into our plans for expansion in the
Asia/Pacific region," said Michael E. Korybalski, chairman and CEO of
Mechanical Dynamics.  "There is strong demand for our functional virtual
prototyping solutions in that part of the world, as evidenced by the strong
growth we've seen in Asia/Pacific, particularly Japan, over the past several
quarters.  ESTECH has an excellent reputation, especially in the automotive
industry, and this will be of significant benefit as we deploy our Functional
Digital Car solution to auto manufacturers throughout the region."
    ESTECH (Engineering Solutions & TECHnology) was founded in 1989 and has
worked with more than 100 clients in that time, including nine of the 11
Japan-based automotive manufacturers.  The company employs 43 people in six
engineering groups, with one group dedicated to the use of ADAMS(R),
Mechanical Dynamics' flagship functional virtual prototyping software.
    "ESTECH is unique within the Asian region in that they use ADAMS and
finite element analysis in conjunction with testing technology to solve
engineering problems," said Raymond J. Gaynor, Mechanical Dynamics' vice
president of Asia/Pacific Operations.  "The integration of functional virtual
prototyping and physical testing is a key initiative for Mechanical Dynamics,
and we see strong synergies between that goal and the expertise ESTECH has
developed."
    Gaynor said key initiatives ESTECH will promote with their clients include
simulation and testing in noise, vibration and harshness (NVH) and durability.
Mechanical Dynamics has been developing solutions in these two critical areas
of vehicle development, and will introduce ADAMS(R)/Vibration and
ADAMS(R)/Durability in November 2000 as part of the release of ADAMS Version
11.0.  Along with ADAMS(R)/Car and ADAMS(R)/Engine, these products form the
basis of Mechanical Dynamics' Functional Digital Car(TM), a virtual prototype
of a complete vehicle for performance simulation, testing, and optimization.
    Under the terms of the agreement, ESTECH will become a wholly owned
subsidiary of Mechanical Dynamics.  The total purchase price, less ESTECH
cash, is expected to approximate $5.0 million, including other acquisition-
related costs.  Pursuant to the agreement, the purchase price will be adjusted
to reflect any change in the net assets of ESTECH from March 31, 2000 through
the closing date, which is expected to occur within 30 days.  Total revenue
for ESTECH for its fiscal year ended March 31, 2000 approximated $6.6 million.
Excluding any one-time acquisition-related charges, the transaction is
expected to be neutral to Mechanical Dynamics' fourth-quarter 2000 earnings
and accretive to the company's calendar year 2001 earnings.
    Koreyuki Yamamoto, president of ESTECH, said, "We have worked with
Mechanical Dynamics throughout the years and have established an excellent
relationship with them.  We've found ADAMS technology invaluable in assisting
our clients with complex engineering problems.  Becoming part of Mechanical
Dynamics' operation in Asia offers ESTECH an exciting opportunity to
significantly expand our business."
    ESTECH will work with Mechanical Dynamics Japan to provide total
functional virtual prototyping solutions throughout the region.  Shunichi
Yamauchi, president of Mechanical Dynamics Japan, will continue to serve as
Japan country manager for Mechanical Dynamics and will oversee ESTECH
operations.