Hercules sells CP Kelco shares

Hercules announced today that they had sold their minority share holding in CP Kelco to the J M Huber corporation. J M Huber are also the owners of Noviant the worlds largest CMC manufacturer.

J M Huber have some substantial interests in the hydrocolloids world as the owner of the old Metsa Serla CMC facilities, now known as Noviant, which were themselves an agglomeration of various smaller companies. Certainly this will strengthen the Huber offering into the oil well drilling market and give them a foot hold into a more food oriented business.

Hercules for their part have finally managed to disengage from what was never the sweet deal it looked to be from the beginning. The business of CP Kelco never lived up to their expectations but then they had not anticpiated such difficult trading conditions for Carrageenan and Xanthan. The full release reads:

CP Kelco's Daily Operations Will Not Be Affected by Hercules' Sale of its Minority Share Position to Huber

Hercules Incorporated announced an agreement has been signed for the sale of its minority share position in CP Kelco to J.M. Huber Corporation. The companies expect the transaction, subject to regulatory approval, will close during the first quarter of 2004.

"In terms of our day-to-day operations, this announcement and resulting sale of Hercules' minority share position will have virtually no impact on us and will be completely transparent to our customers, suppliers and employees," says Robert B. Toth, CP Kelco's President & CEO. "It is a financial transaction between Hercules and Huber which we believe is a direct result of continued improved performance that makes CP Kelco an attractive investment."

Formed in 2000 by the combination of the Copenhagen Pectin/Food Gums Division of Hercules Incorporated and the Kelco Biopolymers business of Monsanto Company, CP Kelco's principal shareholders are currently Lehman Brothers Merchant Banking Partners II L.P. and Hercules Incorporated (NYSE:HPC). Lehman Brothers will remain the primary and controlling shareholder if and when the transaction is approved.