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06-05-2014

A. Schulman to Acquire Majority of Ferro's Specialty Plastics Business

A. Schulman, Inc., Akron, Ohio/USA, has entered into an agreement to purchase a selected majority of the assets of the Specialty Plastics business segment from Ferro Corporation, Mayfield Heights, Ohio/USA, for USD 91 million in cash. The purchase agreement includes four facilities located in the United States as well as operations in Spain. Subject to the satisfaction of customary closing conditions and regulatory approvals, the transaction is anticipated to close during the fourth quarter of A. Schulman's current fiscal year ending August 31, 2014. Excluded from the transaction are Ferro's plastics business and operations in Edison, New Jersey, and Carabobo, Venezuela.

The acquisition is expected to be accretive to adjusted earnings per share and the Company anticipates achieving approximately $5.5 million in synergies within 12 to 18 months following the close of the transaction, driven primarily by sourcing activities and plant efficiency actions. The Specialty Plastics assets included in the pending transaction achieved sales of $154 million in 2013, with approximately two-thirds of these revenues generated in the United States. As a result, this acquisition is expected to deliver important geographic diversification benefits to A. Schulman.

The Specialty Plastics segment is a global supplier of custom engineered plastic compounds, colorants, and liquid coatings, primarily focused on thermoset plastic technology. The business offers a broad portfolio of proprietary products and recognized brand names serving a wide range of end markets including packaging, transportation, construction, appliances and agriculture. Its products include color additives and concentrates with a focus on high-margin color, combination and additive masterbatches; filled and reinforced plastics with a strong position in glass-filled polypropylene and custom formulating capabilities; advanced polymer compounds and alloys including melt-processable rubber, molding and extrusion materials, and custom compounds. Its facilities are strategically located to competitively and efficiently serve its target markets and customers, with available capacity for growth in all segments.

Joseph M. Gingo (figure: A. Schulman)

Joseph M. Gingo (figure: A. Schulman)

"Specialty Plastics is a performance-driven, technically demanding business, and this business segment is what initially attracted us to seek to acquire Ferro back in 2013. Strategically combining the two businesses provides the existing customers of the Specialty Plastics segment with an expanded product portfolio, technical solutions and global resources with the full support of the A. Schulman team", said Joseph M. Gingo, Chairman, President and Chief Executive Officer of A. Schulman. "When finalized, this will be the ninth acquisition we have successfully completed over the past four years, in addition to three joint ventures, as we continue to execute our aggressive growth strategy driven by organic growth and acquisitions. As we stated at our recent investor day, our goal is to gain USD 100 million in sales annually through acquisitions."

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