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INDSPEC CHEMICAL CORPORATION SIGNS DEFINITIVE STOCK ACQUISITION AGREEMENT WITH CASTLE HARLAN

 NEW YORK and PITTSBURGH, Nov. 2 /PRNewswire/ -- INDSPEC Chemical Corporation and CH NewCo, Inc., a wholly owned subsidiary of Castle Harlan Partners II, L.P. (CHPII), announced today that they have entered into a definitive Stock Acquisition Agreement providing for CH NewCo's acquisition of a controlling interest in INDSPEC. Under the terms of the Stock Acquisition Agreement, which has been approved by INDSPEC's Board of Directors, CHPII will purchase a majority of the common stock of INDSPEC and INDSPEC will make a cash tender offer for all of its outstanding shares of common stock (including warrants and options). The purchase price for the common stock will be $450 per share.
 The CHPII buyout has been joined in by company management, led by Chief Executive Officer Frank Spinola. INDSPEC management and its employees will own at least a 40 percent interest in INDSPEC following the completion of the CH NewCo purchase and the tender offer.
 INDSPEC, based in Pittsburgh, is a specialty chemical company that manufactures resorcinol, a versatile compound used in such varied products as tires, wood adhesives, sunscreens, dyestuffs, pharmaceuticals and fire retardants. INDSPEC also produces other chemical products. INDSPEC is currently owned by approximately 200 shareholders, principally Chase Manhattan Bank and investors associated with the Sterling Group, a private investment group based in Houston. INDSPEC was acquired by these shareholders in 1988 from Koppers Company (now Beazer).
 CHPII is an investment fund controlled by Castle Harlan, Inc., the New York merchant bank. Castle Harlan is run by John K. Castle, former president and chief executive officer of Donaldson, Lufkin & Jenrette, the investment banking firm, and Leonard M. Harlan, chairman of The Harlan Company, a diversified real estate and corporate finance advisory firm. Through other limited partnerships, Castle Harlan has had controlling investments in Delaware Management Company, Inc., the $26 billion Philadelphia money management firm, Ethan Allen Interiors and the Quantum Restaurant Group.
 Simultaneously with the execution of the Stock Acquisition Agreement, CHPII entered into separate stock voting agreements with holders of in excess of 51 percent of the outstanding common stock of INDSPEC (on a fully diluted basis) providing for the agreement by such holders to vote in favor of certain transactions contemplated by the Stock Acquisition Agreement and to refrain from taking any action to support any other acquisition proposal. The tender offer, which was commenced today, is conditioned upon the closing of the CH NewCo purchase, which in turn is subject to there being properly tendered and not withdrawn 70,000 shares of common stock of INDSPEC (representing nearly 70 percent of the outstanding shares), the completion of financing by the buyer, receipt of all necessary regulatory approvals and consents and certain other conditions.
 -0- 11/2/93
 /CONTACT: Frank Spinola, chief executive officer, of INDSPEC, 412-338-2861/


CO: INDSPEC Chemical Corporation; CH NewCo, Inc.; Castle Harlan
 Partners II, L.P. ST: Pennsylvania IN: CHM SU: TNM


DM-JM -- PG018 -- 9856 11/02/93 17:41 EST
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Publication:PR Newswire
Date:Nov 2, 1993
Words:489
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