Sale of Sheldahl to Investor Group Approved by U.S. Bankruptcy Court

    NORTHFIELD, Minn.--Aug. 26, 2002--Sheldahl, Inc. today announced that the U.S. Bankruptcy Court for the District of Minnesota has approved the sale of its continuing business assets to the company's three largest shareholders, Ampersand Ventures, Molex Incorporated and Morgenthaler, following the company's voluntary petition for Chapter 11 reorganization. The company said it anticipated that the transaction would be completed within 30 days.
    Under the purchase agreement, Sheldahl's Northfield location will continue to operate. The company's remaining facility in Longmont, Colorado will be relocated to Northfield and the Longmont plant will cease operations. As of August 2, 2000, the Longmont facility employed 24.
    "We are pleased by the decision of Ampersand, Molex and Morgenthaler to purchase the business, providing the company with the necessary resources to further strengthen its leadership in the interconnect and materials business," said Benoit Pouliquen, President and Chief Executive Officer of Sheldahl. "Business for the company has been better than expected during this bankruptcy period, and we feel the current success of our operations is a good indication of the long-term viability of the company. We will emerge from the bankruptcy in a strong financial position."
    The sale includes a majority of Sheldahl's operating assets and contracts necessary to maintaining its operations. The company said the sale would not result in any residual value for preferred and common shareholders.

    About Sheldahl

    Sheldahl, Inc. is a leading producer of high-density substrates, high-quality flexible printed circuitry, and flexible laminates primarily for sale to the automotive, electronics and data communications markets. The company is headquartered in Northfield, Minnesota. Sheldahl news and information can be found on the World Wide Web at http://www.sheldahl.com.

    The discussion above contains statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements by their nature involve substantial risks and uncertainties as described by Sheldahl's periodic filings. Actual results may differ materially depending on a variety of factors. Information with respect to the risks and uncertainties faced by Sheldahl may be found in, and the prior discussion is qualified in its entirety by, the Risk Factors contained in the Company's filings with the Securities and Exchange Commission including Sheldahl's Annual Report, Form 10-K for the fiscal year ended December 29, 2000, and other SEC filings. Sheldahl does not undertake any obligation to update any such factors or to publicly announce developments or events relating to the matters described herein.