Ferro Corporation Acquires Advanced Polymer Compounding.

CLEVELAND--(BUSINESS WIRE)--March 10, 1999--Ferro Corporation (NYSE:FOE) announced today the acquisition of Advanced Polymer Compounding Company (APC), headquartered in Carpentersville, Illinois. APC is a supplier of high performance thermoplastic elastomers (TPEs) and highly engineered plastic compounding services. Terms of the transaction were not disclosed.

Hector R. Ortino, Ferro's president and chief executive officer, said, "This acquisition is an excellent strategic fit that meets a number of our acquisition criteria. APC will bring us entry into a new, high-growth market and expand our geographic presence. It offers us considerable synergy with our existing plastic compounding businesses, and it will broaden our technology base. In addition, APC's profitability is above the average for Ferro."

APC's TPE products are sold under the trade name "Alcryn(R)," a patent-protected line of high performance TPEs developed by Dupont and purchased by APC in 1997. Compared to traditional TPEs, the Alcryn product line offers superior weatherability, noise reduction, non-slip properties, abrasion resistance, oil and gas resistance, and faster processing cycle times. Because of these benefits, Alcryn has already penetrated market segments such as automotive, architectural, appliances, tools, lawn and garden and electrical, with strong potential for continued growth. Alcryn products are sold in the United States and exported to Mexico, Europe, China and Australia.

APC also provides engineered plastic compounding services for products such as reactive processed compounds, semi-conductive compounds and a variety of alloys and blends for end-use markets such as automotive, construction, packaging, wire and cable. APC had sales of approximately $25 million in 1998.

R. Jay Finch, vice president of Ferro's specialty plastics segment, said, "Acquisition of APC represents an important step in an ongoing search for acquisitions in related plastics businesses that can fulfill our aggressive growth strategy, improve our market position and enhance shareholder value. We targeted TPEs as a high priority because they offer significant growth potential and synergy with our existing plastic compounds and colorants markets. Our strong and very diversified customer base will benefit from this product line extension. For example, we expect Alcryn to appeal to our customers in the appliance, lawn and garden and automotive market segments. And APC's processing knowledge in engineered compounds enriches our core technology and product lines."

APC will become the Performance Polymer Compounds unit and will be integrated with Ferro's major business of Filled & Reinforced Plastics, which in turn is part of Ferro's Specialty Plastics segment.

Ortino added, "Acquisitions such as APC will play an important role in our future as we look to diversify and improve the mix of businesses in our portfolio and create a model for the Company that offers a higher sustainable long-term growth rate."

Ferro Corporation is a leading multinational producer of performance materials for industry, including coatings, colors, ceramics, plastics and chemicals. The Company had sales of $1.4 billion in 1998 and has operations in 19 countries.