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Arsenal Capital Partners Acquires Reilly Industries In a $250 Million Transaction
Manufacturer of Specialty Chemicals for Agrochemical, Pharmaceutical and Polymer Additives Markets

NEW YORK, October 4, 2005 - Arsenal Capital Partners, a New York-based private equity firm that invests in middle-market manufacturing and service companies, announced today the acquisition of a controlling interest in Reilly Industries, Inc. ("Reilly"), an Indianapolis-based manufacturer of specialty chemicals. The transaction was valued at approximately $250 million.

Reilly is the world's largest producer of pyridine and pyridine derivatives and chemical intermediates used in diverse end markets, including agrochemicals, pharmaceuticals, and nutrition. In addition, Reilly's Morflex, Inc. subsidiary is the world's largest producer of the insect repellent DEET and a leading manufacturer of safe, non-phthalate polymer additives used in a variety of medical, food packaging, and children's toy applications. Reilly operates seven manufacturing facilities in the United States, Europe and Asia.

"We are excited and pleased to enter into this relationship with Arsenal," said Robert McNeeley, President and CEO of Reilly. "This arrangement fits with our long term strategy of seeking opportunities to broaden our current business lines and expand into new ones. Arsenal has a proven expertise the specialty chemical sector and our new partnership with them should enable us to pursue this strategy effectively." Reilly management and the Reilly family will maintain an ownership position in the business.

Arsenal Capital Partners has previously made investments in the specialty chemicals and related industrial sectors, including Rutherford Chemicals, a producer of fine and specialty chemicals; Scientific Protein Laboratories, a manufacturer and developer of active pharmaceutical ingredients; Sermatech International, a provider of engineered coatings to the aerospace/defense and power generation markets; and Interdynamics, a value-added packager of chemicals for the automotive aftermarket.

Equity financing for the transaction was provided from Arsenal Capital Partners' $300 million fund. Debt financing for the transaction was provided by Silver Point Capital, L.P., D.B. Zwirn & Co., L.P., and Wells Fargo Foothill, Inc.

About Arsenal Capital Partners:

Arsenal Capital Partners invests in specialty product and specialty services companies in industries where it has substantial prior experience and expertise that can support management teams to drive growth and improve productivity. Arsenal focuses on growing, niche markets within the healthcare and specialty industrial sectors, including specialty chemicals, aerospace/defense, pharmaceuticals, specialty components and distribution/logistics. For additional information please visit www.arsenalcapital.com.

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