Idexx Laboratories Inc. announced Monday plans to mergewith ETI Corp. in a stock swap worth about $20 million.

The two companies have signed a letter of intent for themerger, and John Deckro, Idexx's chief financial officer, said thecompany hopes to complete the deal by next February.

Under the terms of the agreement, ETI's shareholders wouldreceive 700,000 shares of Idexx common stock (NASDAQ:IDXX)when the merger is completed.

Idexx's stock closed at $29.75 on Monday, up 25 cents a share.

Deckro said Idexx's decision to merge with ETI was basedprimarily on patented environmental diagnostic technologyowned by ETI's subsidiary, Environetics Inc. The technologycould be used for a broad number of applications, said Deckro,but Idexx has nothing imminent in the pipeline.

Environetics manufactures and markets Colilert, anenvironmental diagnostic test to detect bacterial contaminantsin drinking water. Deckro would not disclose annual sales of theproduct. However, the U.S. Environmental Protection Agencyhas approved its use in 45 states, where it is widely used bywater utility companies, according to Idexx.

"The Environetics business fits well with the strong franchisethat Idexx has developed in veterinary diagnostics markets,"said David Shaw, Idexx's president. Environetics will continueto operate from Branford, Conn., under the management of itspresident, Larry Cohoon.

Based in Westbrook, Maine, Idexx develops biotechnology-based detection systems for animal health and food qualitycontrol. Its lead products include its Cite diagnostic test forvarious veterinary applications and VetTest VT8008, ananalyzer to perform blood profiles.

-- Michelle Slade Associate Editor

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