Borden Chemical, Inc. to Acquire Spurlock Industries, Inc.

COLUMBUS, Ohio--(BUSINESS WIRE)--Dec. 18, 1998--Borden Chemical, Inc. announced today that it has entered into a definitive merger agreement to acquire formaldehyde and resins producer Spurlock Industries, Inc. (OTC BB:SKII).

The boards of directors of both companies have approved the agreement. The Spurlock family, which controls approximately 55 percent of the stock of Spurlock Industries, has agreed to support the acquisition and to vote all of its shares in favor of the transaction.

The agreed purchase price is approximately $23 million, or $3.40 per share, subject to downward adjustment for limited contingencies. Borden Chemical also will assume approximately $13.4 million in liabilities.

Spurlock Industries, based in Waverly, Va., has manufacturing facilities located in Waverly, Va., Malvern, Ark., and Moreau, N.Y. and has approximately 80 employees. The company had announced earlier this year that it was exploring a sale of its business.

"Spurlock is a strategic fit with our existing formaldehyde and forest products businesses," said Joseph M. Saggese, chairman, president and chief executive officer for Borden Chemical. "Their manufacturing locations will enhance our presence on the East Coast and expand our North American formaldehyde production network. In addition, their resins business is a nice complement to our existing business in forest products resins."

Phillip S. Sumpter, chairman and chief executive officer of Spurlock Industries, said, "We are very pleased with the terms of the agreement and believe that our shareholders, our customers and our employees will benefit from this transaction."

The acquisition is subject to, among other things, the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the approval of Spurlock Industries shareholders, and certain other conditions, including the conclusion of the derivative action pending in the Federal District Court in Colorado. The companies said they anticipate closing to occur sometime during the first quarter of 1999. Davenport & Company LLC is serving as financial advisor to Spurlock Industries and has provided a fairness opinion to the Spurlock Industries board of directors concerning the transaction.

Borden Chemical, Inc., a subsidiary of privately held Borden, Inc., is a leading global source for formaldehyde, resins, melamine, adhesives, coatings and other specialty chemicals serving a broad range of markets including the forest products, foundry, automotive, construction, composites, electronics and oilfield industries.

NOTE TO EDITORS: Borden Chemical, Inc. is privately held and not affiliated with Borden Chemicals and Plastics Limited Partnership (NYSE:BCU). Please do not run under the BCU symbol.