UPDATE 2-GSI Group agrees to buy Excel Technology for $360 mln

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July 10 (Reuters) - GSI Group Inc (GSIG.O: Quote, Profile, Research), which supplies precision technology and semiconductor systems, said it agreed to buy photonics-based solutions maker Excel Technology Inc (XLTC.O: Quote, Profile, Research) for $360 million cash to expand its market presence and move into Southeast Asia. The offer price of $32 per share, before fees and transaction costs, represents a 30.2 percent premium to the average Excel closing price over the last 30 trading days, GSI said in a statement.

Shares of Excel were up 37 percent at $31.02 in late morning trade on Nasdaq.

GSI's precision technology segment revenue is expected to double and will also boost its position in the non-semiconductor market, particularly in laser and precision components.

Excel's presence in the Southeast Asia is expected to open up new avenues for GSI, the companies said in a joint press conference. GSI, which expects the transaction to close in the third quarter, plans to pay the purchase price through a combination of available cash and external financing.

UBS Investment Bank acted as exclusive financial adviser and placement agent to GSI Group for the transaction. GSI said it expects to earn about 2 cents a share in the second quarter, in line with analysts' expectations. In April, the company said it expected earnings per share, including restructuring charges, at about breakeven.

The Billerica, Massachusetts-based GSI, which caters to the global medical, semiconductor, electronics and industrial markets, reaffirmed its prior revenue view of $64 million to $68 million.

Shares of GSI were trading down 3 percent at $7.54 on Nasdaq. (Reporting by Bhaswati Mukhopadhyay and Kuganandhan Paramanandan in Bangalore; Editing by Bernard Orr)