Vestar Capital Partners and The Carlyle Group Partner in AZ Electronic Materials

London - Global private equity firms, Vestar Capital Partners and The Carlyle Group, announced today that they have partnered in an investment in AZ Electronic Materials. The company, previously acquired by Carlyle from Clariant in 2004, will now be jointly owned by Vestar and Carlyle as equal partners, alongside AZ's management team led by CEO Thomas von Krannichfeldt. Subject to regulatory approvals, the acquisition is anticipated to close by the end of March. Financial details were not disclosed.

Headquartered in Luxembourg with operations throughout Europe, Asia and the United States, AZ is the leading global supplier of electronic materials to the fast-growing flat panel display ("FPD") and integrated circuit ("IC") industries. In FPD, AZ has strong market positions in the major centres of FPD manufacturing (Taiwan and South Korea). In IC, AZ also has strong positions in a number of highly attractive growth segments. It has research and development and manufacturing sites in Japan, Korea, Taiwan, Germany, France and the United States, and a global sales team. AZ has approximately 820 employees worldwide and 2006 revenues were €412 million and has consistently grown in excess of 15% per annum over the past 3 years.

In September 2006, AZ announced a commitment to invest €50 million over the next 15 months in development and expansion programmes to increase production capacity for its customers and ensure it continues to provide the highest quality of products. This includes a €13 million investment in Japan, to expand its manufacturing capacity for polysilazane (PHPS), and the significant expansion of its photoresist facility and production in Hsinchu, Taiwan with an investment of NTD 256 million (€6.25 million), and a €7 million investment in our IC business in the US, including a significant expansion of our Klebosol plant in Martin, South Carolina.

"We have been thrilled with the tremendous success of our investment in AZ over the past three years and are delighted to remain as a substantial investor in the company going forward," said Robert Easton, Managing Director, The Carlyle Group. "The company's growth trajectory has been outstanding and we are confident about the company’s continued growth across all of the company's major product lines. We are delighted to welcome Vestar as partners in this investment. Together with Vestar we plan to continue to invest significantly in the business and to build value as AZ executes on its proven growth strategies."

Robert Rosner, President of Vestar Capital Partners Europe and a founding partner of the firm added, "the combination of our two firm's resources and global footprints with established presence in Europe, the US and Asia make us ideally matched to support AZ's management team as they drive their business growth going forward. We are committed to supporting the company with both financial resources and the time and expertise needed to achieve the company's growth plans, as it follows its customers’ increasing production needs throughout the world."

Jean-Francois Felix, Vestar Managing Director based in Paris, added, "This is an extraordinarily impressive management team who has guided the company to strong market positions in categories that clearly have a lot of wind at their back. It has all the ingredients to be a particularly successful partnership and investment for Vestar."

AZ CEO Thomas von Krannichfeldt commented. "We are delighted with this next chapter in the growth story of AZ Electronic Materials. We have two very strong shareholders in Carlyle and Vestar, both with resources dedicated to our global markets. This transaction enables us to continue to grow our business as an independent company and to ensure the business is a strong and sustainable company on the global market. All of the members of our senior management team are excited about our future under this attractive new partnership."

About AZ Electronic Materials
AZ Electronic Materials is an independent specialty chemicals business with plants in Taiwan, Korea, China, Japan, France, Germany and the US, and provides specialty chemicals for the flat panel displays, integrated circuits and devices, and photolithographic printing industries. The international business is headquartered in Luxembourg, and is owned by the global private equity firms The Carlyle Group, Vestar Capital Partners and AZ Electronic Materials management.

About Vestar Capital Partners
Vestar Capital Partners is a leading international private equity firm specializing in management buyouts and growth capital investments. The firm's investment strategy is targeted towards companies in the U.S., Europe, and Japan with valuations in the $100 million to $5 billion range. Since the firm's founding in 1988, the Vestar funds have completed over 55 investments in the U.S. and Europe in companies with a total value of over $20 billion. These companies have varied in size and geography and span a broad range of industries. The firm's strategy is to invest behind incumbent management teams, family owners or corporations in a creative, flexible and entrepreneurial way with the overriding goal to build long-term franchise value. Vestar currently manages funds with committed capital totaling approximately $7 billion and has offices or affiliates operating in New York, Denver, Boston, Paris, Milan, and Tokyo. More information about Vestar is available at www.vestarcapital.com.