January 9, 1996 -- Saskatoon, Saskatchewan, Canada -- Develcon Electronics
Ltd. today announced it has entered into a letter of intent with certain
of the major shareholders of EDA Instruments Inc. (EDA), a designer and
manufacturer of Wide Area Networking (WAN) equipment, in connection with
the proposed purchase by the Company of all of the issued and outstanding
shares of EDA.

Under the terms of the transaction, Develcon would issue an aggregate of
7,228,109 Common Shares and 3,614,055 Common Share purchase warrants to
acquire the 2,007,808 common shares of EDA to be outstanding immediately
prior to the closing of the transaction. Develcon would issue a total of
an additional 219,360 Common Shares to employees of EDA in consideration
for their agreement to terminate or waive options held by them to acquire
common shares of EDA.

In addition, Develcon would enter into an employment agreement with
Geoffrey Bennett, the President of EDA. Develcon would also agree that,
for as long as Mr. Bennett is employed by the Company and he or members of
his immediate family hold at least 2,000,000 Common Shares of the Company,
he will be entitled to a nominee for election as a director of the
Company.

The completion of the transaction is subject to, among other things, the
receipt by Develcon of net proceeds of at least $10 million from a special
warrant financing to be undertaken by the Company and the approvals of The
Toronto Stock Exchange and the shareholders and directors of the Company
and EDA. The proceeds of the special warrant offering would be used to
eliminate long-term indebtedness of Develcon, including the indebtedness
of EDA assumed on the acquisition, and to provide the working capital
required to fund the anticipated growth of the combined organizations.
Develcon has engaged First Marathon Securities Ltd. and Midland Walwyn
Capital Inc. as its financial advisors in preparation for such proposed
special warrant offering.

William D. Vancoughnett, Chairman and Chief Executive Officer stated,
"There is an opportunity here to build on a long standing bilateral OEM
and technology licence relationship between the two companies. Develcon's
ATM, LAN bridge/router and ISDN technologies together with EDA's Frame
Relay, X.25 switch and Legacy WAN Protocol technologies give us the
ability to address larger and more robust connectivity solutions for
enterprise networks. The acquisition of EDA will provide Develcon with the
critical mass needed to improve its competitive position in the networking
marketplace.

"There are significant technological synergies which we can leverage into
new products to fit a broader range of applications which neither
organization has been able to fully capitalize on a stand-alone basis. In
addition to the obvious operational benefits of merging elements of the
organizations, the complementary channels to market will provide
significantly increased geographic coverage for the two companies."

Geoffrey Bennett, President of EDA, stated that "the acquisition of EDA by
Develcon would provide the financial and marketing resources to allow the
companies to capitalize on the strong market acceptance that has been
received for the recently introduced Athena range of wide area
communications platforms and also permit faster development of additional
LAN capabilities for the product."

Develcon is a leading Canadian designer, manufacturer and supplier of
reliable, easy-to-use, standards-based data communications equipment with
special emphasis on ISDN Remote LAN access approved for use around the
world. It markets all its products through indirect channels in over 60
countries.

The Company specializes in products used to create, interconnect and manage
LANs. These include a line of stackable SNMP-managed Hubs, local and
remote Ethernet and Token Ring Bridges, Ethernet multi-protocol
Bridge/Routers and ISDN Bridge/Routers.

EDA is a Canadian designer of a range of WAN products which are marketed in
over 50 countries. The Company, which employs approximately 70 people and
has current annual revenues in the area of $9 million, has its head office
in Toronto and branch offices in Singapore and Santiago, Chile. As a
result of the transition from the MPX25000 to the Athena product line and
the substantial investment in Research and Development and Marketing, the
Company has operated at a loss during the past two years. Management of
EDA expects that at the projected level of shipments the Company would
return to profitability in the near term.

EDA's business is the design, manufacture and marketing of data
communications equipment used to organize and transmit data over private
and public information networks in a timely and cost effective manner.
These products offer the user a choice of data transmission protocols
ranging from X.25 to Frame Relay or ISDN together with a base for
expansion to ATM. EDA's technological strength lies in its proprietary
combination of hardware and software, which provides well priced solutions
to the data transmission challenges of both network operators and users.
EDA is addressing the advanced needs of the data communications
marketplace with its recently introduced Athena platform. This platform is
technologically unique in that it meets the need for both packet switching
and routing functions, in a comprehensive yet flexible and highly cost
effective manner.

As at January 9, 1996, an aggregate of 22,278,057 Common Shares of Develcon
were issued and outstanding and an additional 4,185,000 Common Shares of
the Company were issuable pursuant to all outstanding stock options and
securities convertible into or exchangeable for Common Shares of the
Company.

The Common Shares of Develcon Electronics Ltd. are listed on The Toronto
Stock Exchange (symbol DLC).

For further information, please contact:

W.D. Vancoughnett
Chairman of the Board and
  Chief Executive Officer
Develcon Electronics Ltd.
(306) 933-3300
 
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