Sheldahl Inc. to Sell Portion of Materials Business

    NORTHFIELD, Minn.--May 21, 2001--Sheldahl, Inc. today announced it is actively pursuing opportunities to sell a portion of its technical materials business based in Northfield, Minnesota.
    The sale would include the Company's vacuum deposited materials, unidirectional tape and specialty laminates, including Copper/PET and Copper/PEN, used in the electronics industries.
    "The sale of this portion of our materials business is consistent with Sheldahl's long-term growth strategy," said Donald Friedman, President and Chief Executive Officer of Sheldahl. "This transaction will improve our balance sheet and sharpen our focus on key strategic business opportunities."
    Sheldahl said it is in the process of negotiating a sale of this business on a non-exclusive basis to Morgenthaler Partners and Ampersand Ventures, investors in the Company. The Company has 60 days to solicit additional offers from other interested parties, and has engaged William Blair & Company, LLC of Chicago to conduct a targeted sale process. The Sheldahl Board of Directors has created an independent committee to evaluate offers to ensure that shareholder's interests are preserved during the process. As part of the transaction, Morgenthaler Partners, Ampersand Ventures, and Molex, Inc. have provided a $5 million dollar advance to the Company.
    The Company said it would retain the portion of its materials operations consisting of the display products group that manufactures Accentia(TM), a key component in the plastic display and touch panel markets, and Comclad, a line of high frequency, low loss materials for wireless markets and its adhesiveless and Lithium battery products.