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U.S. Bancorp Piper Jaffray Sees Specialty Chemical Industry Ripe For Increased Merger and Acquisition Activity

MINNEAPOLIS, Nov. 20 /PRNewswire-FirstCall/ -- According to the American Chemistry Council (ACC), an industry trade group based in Arlington, Va., chemical industry shipments reached $458.4 billion in 2002. The industry has enjoyed substantial growth over the past half century and has seen increased consolidation over the past decade. Within the broader industry, the specialty chemicals segment continues to experience relatively higher growth and exhibit favorable characteristics that support further consolidation.

In a new in-depth report, entitled Specialty Chemical Industry Overview, Robert Frost, vice president in U.S. Bancorp Piper Jaffray's Middle Market Mergers and Acquisitions (M&A) group, provides an overview of the specialty chemical industry, with a particular focus on the dynamics and trends that are shaping M&A activity in the sector. He feels the following seven specialty chemical sectors are particularly fertile with respect to ongoing middle market M&A activity:

     1) adhesives and sealants
     2) specialty agricultural chemicals
     3) electronic chemicals
     4) industrial & institutional cleaning chemicals
     5) paints & coatings
     6) plastic additives
     7) water treatment chemicals

"To varying degrees, each of the seven sectors we have highlighted in this report possess characteristics that suggest a fertile environment for ongoing M&A activity; notably many of these sectors remain highly-fragmented, enjoy relatively higher growth rates and possess market fundamentals that support further consolidation," said Frost.

In addition, Frost believes there are a number of characteristics and trends impacting the specialty chemical industry. These characteristics and trends include:

     -- market fragmentation,
     -- globalization,
     -- need for financial resources to support research and development,
     -- a renewed focus on core businesses and
     -- increasing importance of size and scale.

"We believe that many of these dynamics are placing pressure on small, regional firms and favoring those mid-size to large multinational companies with solid acquisition platforms," said Frost. "In addition, we feel that these dynamics will lead to increased M&A activity, especially within the middle market." Frost believes other factors such as the return of strategic buyers, increased interest in specialty chemical industry on the part of private equity firms and improving valuations have already begun to set the stage for a pickup in activity.

To receive a copy of Specialty Chemical Industry Overview, clients should contact Robert Frost at rfrost@pjc.com or 612-303-8248; members of the media should contact Dana Wade at dwade@pjc.com or 415-277-1556.

U.S. Bancorp Piper Jaffray, a subsidiary of the consolidated group of U.S. Bancorp (NYSE: USB), is a focused securities firm comprised of two revenue- generating segments -- Capital Markets and Private Client Services. Clients of both segments are supported by Investment Research, an independent group reporting to the CEO. The firm provides a full range of investment products and services to individuals, institutions and businesses. The firm has over 124 offices in 25 states across the country. U.S. Bancorp offers a comprehensive range of financial solutions through U.S. Bank, U.S. Bancorp Asset Management, U.S. Bancorp Investments and U.S. Bancorp Piper Jaffray. For more information on U.S. Bancorp Piper Jaffray, visit www.piperjaffray.com .

SOURCE U.S. Bancorp Piper Jaffray

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding U.S. Bancorp's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.



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