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Arsenal Capital announces sale of Vertellus Specialties Inc.
Leading Specialty Chemicals Company Yields Attractive Return

NEW YORK, December 10, 2007 - Arsenal Capital Partners, a leading New York-based private equity firm that invests in middle-market specialty industrial, healthcare and financial services companies, today announced the sale of Vertellus Specialties, a leading provider of specialty chemicals for the agriculture, nutrition, pharmaceutical, personal care, and performance materials markets, to Wind Point Partners, a private equity firm. Terms of the transaction were not disclosed.

Headquartered in Indianapolis, Vertellus was formed by Arsenal in 2006 through the merger of its portfolio companies Reilly Industries and Rutherford Chemicals. Led by Managing Director Jeffrey Kovach and Principals John Televantos and Jack Norris, Arsenal worked closely with Vertellus' senior management to realign the business by market, capture combination synergies, and drive new product and process developments. Arsenal supported significant capital investments, particularly at the company's Greensboro and Indianapolis facilities, to enhance production capacity and implement new technologies. Vertellus also invested heavily to expand capacity in China to better serve the growing demand in Asia for vitamins and herbicides. Annual sales for the company exceed $450 million.

"We are very pleased with the outcome of this investment, particularly given the complex nature of the initial corporate carve out of Rutherford Chemicals and the subsequent merger and successful integration with Reilly Industries," said Mr. Kovach. "Vertellus today is a leading provider of niche specialty chemicals and additives serving key industries and has successfully leveraged its strong technology portfolio to increase market share. The company is favorably positioned to continue to benefit from global trends well into the future."

Added Mr. Televantos, "This investment has been a strong fit with Arsenal's specialty chemicals and materials sector focus. We partner with growing businesses such as Vertellus, which offer specialty products and services to their customers, and support management initiatives to improve their competitive position by leveraging Arsenal's financial and operational resources."

Mr. Kovach said, "The management team of Vertellus, led by CEO Tim Zappala, has done an exceptional job of growing and improving the business. All of us at Arsenal Capital Partners greatly appreciate their contributions to the success of this company and our investment. We look forward to continuing our close working relationship with Tim following his transition out of Vertellus."

Outgoing Vertellus President and CEO Timothy Zappala said, "Everyone within our organization contributed to the success of Vertellus and looks forward to continuing to implement the growth initiatives that will help expand our business around the world under Wind Point's ownership. We want to thank the Arsenal team for their tremendous assistance and the positive and collaborative working relationship they fostered as we worked together to build this business into the leading provider in the vast majority of our markets."

"This investment highlights the strength of the Arsenal investment model, which encompasses sector focus and a broad team of industry and operating resources," said Mr. Kovach. "Company management utilized a significant number of Arsenal professionals in building to this successful outcome and, as one of the first investments in our inaugural fund, it has provided a blueprint for value creation in other Arsenal investments. In addition, this realization has ensured an attractive return to the limited partners that supported our first fund."

The successful investment return generated from the Vertellus sale follows the realization in September of another Arsenal portfolio company, Priority Solutions, which generated a return of approximately 3.5 times Arsenal's original investment in slightly more than three years.

About Vertellus Specialties

Vertellus Specialties Inc. develops and manufactures specialty chemicals used in pharmaceuticals, personal care, nutrition, agriculture, and performance materials markets. Vertellus is the #1 global producer of pyridine and picolines, specialty pyridine derivatives, DEET, castor oil derivatives and systems, and citrate polymer additives and systems, and is the world's second largest producer of Vitamin B-3. The company benefits from a technically advanced global manufacturing base and has approximately 750 employees. For more information, visit

About Arsenal Capital Partners

Arsenal Capital Partners is a New York-based private equity firm that makes control investments in specialty industrial, healthcare and financial services companies. Arsenal makes investments in sectors where the firm has prior knowledge and experience, and targets businesses that have the potential for further value creation by working closely with management to accelerate growth and leverage the firm's operational improvement capabilities. Arsenal currently has $800 million of committed equity capital. For additional information on Arsenal Capital Partners please visit

About Wind Point Partners

Wind Point Partners is a private equity investment firm with $2 billion in capital under management. Wind Point focuses on partnering with top caliber executives to acquire solid middle market businesses with a clear path to value creation. Additional information about Wind Point is available at


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