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Arsenal Capital To Acquire Ferro Corporation's Fine Chemicals Business
Renamed Novolyte Technologies, Arsenal Plans To Build A Global Energy Technology Company Around This Platform

NEW YORK, October 3, 2008 – 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 that it has signed a definitive agreement to acquire Ferro Corporation’s (NYSE: FOE) Fine Chemicals business, a leading manufacturer of electrolytes used in the manufacture of lithium ion batteries, as well as high performance intermediates for other key end products, for $66 million.

The new stand-alone company will be named Novolyte Technologies and has manufacturing facilities in both the U.S. and China. The company’s products include electrolytes and materials used for lithium batteries, ultracapacitors and other energy storage devices, solvents used in a variety of industrial processes and products, electronic materials, polymer ingredients, pharmaceutical and agricultural chemicals. The company’s products and technology solutions are an integral part in the emerging growth of lithium batteries for hybrid electric (HEV) and electric vehicles.

“This is a signature Arsenal transaction that plays to the core strengths of our firm’s operating expertise,” said John Televantos, a Principal of Arsenal Capital who leads the firm’s specialty chemicals practice. “The Fine Chemicals business has a unique portfolio of strong and highly regarded products and technology that will be better positioned as a stand-alone company to take advantage of global opportunities. With the strength of the company’s senior management team, future strategic investments and the skills of our operating executives who have enhanced the performance of similar businesses, we aim to add value to Novolyte by capturing new global growth initiatives and building a world-class company.”

Arsenal has previously led a number of complex corporate carve-outs and successfully executed several such transactions in concert with leading corporations, including Cambrex Corporation, Wyeth, and Mail-Well, Inc. Earlier this year, Arsenal announced plans to acquire DSM Special Products, a business unit of Royal DSM N.V. that manufactures specialty ingredients used in food, pharma, and animal feed, as well as in a range of industrial applications.

Edward Frindt, who is now General Manager of the business will become CEO of Novolyte upon completion of the transaction. He has been with the Fine Chemicals business for eight years and has helped to grow the business internationally. Mr. Frindt recently completed an assignment in China as the Asia Business Director where he was responsible for new business development in the region, including the successful startup of the new Battery Materials Plant.

Timothy Zappala, an Arsenal Operating Partner, said, “The Fine Chemicals business is developing novel materials for use in future power technologies and, with key manufacturing operations and marketing capabilities in China, Arsenal will leverage our presence in China to further develop markets in this region as well as globally. As an independent company, Novolyte will have the support of skilled and dedicated investors who provide the flexibility to leverage the company’s technology and build Novolyte into a stronger global enterprise. We look forward to partnering with Ed and his senior management team who have a strong competency in specialty chemicals and materials.”

The transaction is expected to be completed in the fourth quarter.

Arsenal’s current investments in the specialty chemicals sector include Velsicol Chemical, a leading global manufacturer of high performance specialty chemicals including benzoic acid and its derivatives which are used in applications such as agrochemicals, food and beverage preservatives and non-phthalate plasticizers. In 2007, Arsenal sold Vertellus Specialties, a leading provider of specialty chemicals for the agriculture, nutrition, pharmaceutical, personal care, and performance materials markets, after successfully building the business and increasing annual sales to more than $450 million.

About Arsenal Capital Partners

Arsenal Capital Partners is a New York-based private equity firm that makes 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 www.arsenalcapital.com.

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