CIMCO reaches definitive agreement to be acquired by M.A. Hanna.

COSTA MESA, Calif.--(BUSINESS WIRE)--Dec. 20, 1995--CIMCO Inc. (NASDAQ:CIMC), a producer of thermoplastic compounds and plastic components, and M.A. Hanna Company (NYSE/CHX:MAH), an international specialty chemicals company, jointly announced Wednesday that they have entered into a definitive merger agreement whereby M.A. Hanna will acquire, through a tender offer for $10.50 a share, all of the outstanding capital stock of CIMCO.

CIMCO's board of directors has approved the tender offer and the definitive agreement and recommended that shareholders of CIMCO accept the offer. Russell T. Gilbert, president and chief executive officer of CIMCO and that company's largest stockholder, stated that he intends to tender his 615,984 shares, or almost 21 percent of CIMCO's shares outstanding, to M.A. Hanna on the same terms offered to other CIMCO stockholders.

The tender offer, which will commence within five business days, is conditioned upon governmental approvals among other clearances and the acquisition of a majority of the CIMCO common shares by M.A. Hanna. The merger agreement provides that following the consummation of the offer, the remaining CIMCO common shares will be acquired for $10.50 per share in cash through a merger in which CIMCO will become a business unit of M.A. Hanna. In connection with its approval of the definitive agreement, CIMCO made its share purchase rights inapplicable to the M.A. Hanna transaction.

"My objective and that of the CIMCO management team and board of directors has been to maximize shareholder value," Gilbert said. "This transaction fulfills that objective, and we are pleased that Hanna has recognized our achievements."

Gilbert has made an offer to M.A. Hanna for the plastics components business of CIMCO, as previously announced. Consistent with its strategy of being intermediary between the polymer producer and the end product manufacturer, M.A. Hanna intends to retain CIMCO's plastics compounding operations while selling its plastics components business to Gilbert promptly after completing the tender offer.

CIMCO's plastics compounding businesses, which operate as Compounding Technology Inc. (CTi), are located in Singapore; Corona, Calif.; and Charlotte, N.C. accounting for 31 million pounds of capacity. Another facility is under construction in France.

"The acquisition of CTi helps us on three fronts to have a more balanced market profile. First, we will grow our international business. CTi provides Hanna with an excellent base for growth in Asia," said Martin D. Walker, M.A. Hanna chairman and chief executive officer.

"Second, CTi's strong engineering plastics compounding business will add breadth to our specialty compounding portfolio throughout the world," Walker continued. "Third, we are able to build a stronger position in the electrical and electronics and business machines markets."

CTi, formed in 1980, had sales of $44 million in fiscal 1995 and has 95 employees. Through the first six months of fiscal 1996, CTi's sales have nearly doubled and operating profits are running five times greater than the same period in fiscal 1995. The company develops and produces engineering plastic compounds with an emphasis on polycarbonate resins, which are used in the electrical/electronics, business machine and appliance markets because of the material's toughness, clarity and heat resistance.

Founded in 1959, CIMCO Inc., with headquarters in Costa Mesa, Calif., reported sales of $83 million for fiscal 1995. CIMCO is a major developer and manufacturer of high performance plastic components for commercial, industrial and medical markets. CIMCO supplies more than 100 original equipment manufacturers in the computer, commercial irrigation, automotive safety, residential products, telecommunications and health care industries.

M.A. Hanna Company is a leading international specialty chemicals company. Its primary businesses are plastics and rubber compounding, color and additive concentrates and distribution of plastic resins and engineering shapes.

CONTACT: Pondel, Parsons & Wilkinson

Cecilia Wilkinson, 310/207-9300

or

CIMCO Inc.

Tammy Trenkmann, 714/546-4460

or

M.A. Hanna Company

Barb Gould, Investor

216/589-4085

or

M.A. Hanna Company

Andy Opila, Media

216/589-4018