Ferro Announces Two Transactions That Expand Ceramic Coatings Business

Acquisitions of Endeka Group and Gardenia Quimica will broaden
Ferro’s portfolio of products sold into the high-end tile market,
improve Ferro’s manufacturing productivity, and provide key raw material
supplies

CLEVELAND–(BUSINESS WIRE)–Ferro Corporation (NYSE: FOE, the “Company”), a leading global provider
of functional coatings and color solutions, today announced that it has
entered into a definitive agreement to acquire Endeka
Group, a global producer of high-value coatings and key raw
materials for the ceramic tile market. In a separate transaction, Ferro
has acquired a majority interest in Gardenia
Quimica, which also supplies the
ceramic tile market. Both privately held companies are headquartered
near Ferro’s facilities in Castellón, Spain, a major hub of the
worldwide ceramics market.

Ferro’s acquisition of Endeka for approximately €64 million
(approximately $75 million) is subject to customary closing conditions
and is expected to be completed in the fourth quarter. The transaction
will be funded through excess cash and borrowings under the Company’s
existing revolving credit facility.

Endeka full-year forecasted 2018 revenues are approximately €75 million
(approximately $88 million). Ferro expects the transaction to be
accretive to earnings and 2018 post-synergy adjusted EBITDA, which is
forecasted to be approximately €11-12 million (approximately $13-14
million). Endeka produces frits and glazes, digital inks and colors used
in the manufacture of a broad range of ceramic products, including tile,
tableware and sanitaryware. This transaction backward integrates Ferro
into certain key raw materials used in the manufacture of ceramic
coating materials. Endeka has approximately 340 employees who work in 9
facilities in Europe and Asia.

The Gardenia Quimica transaction was completed on August 3, 2017.
Gardenia Quimica has 26 employees and produces mediums, additives,
binders, and other ancillary products for the tile coatings industry.
Gardenia’s products enable Ferro to further backward integrate into a
number of materials used by Ferro and its customers in the manufacture
of tile coating products. The transaction resulted in Ferro
increasing its ownership in the joint venture company from a minority to
a majority position. Revenue is forecasted to be approximately €5
million (approximately $6 million) in 2018.

Peter Thomas, Chairman, President and CEO of Ferro Corporation, said,
“These transactions will strengthen our Performance Coatings business by
providing multiple opportunities for us to optimize manufacturing
operations and cash conversion and to further innovate within our
ceramic coating products portfolio.

“Over the past few years, we have moved our tile-oriented portfolio up
the value chain, focusing on the high end of the market. At the same
time, we have driven operating efficiencies and product innovation to
ensure that our customers receive the highest quality products and
services.

“Endeka Group and Gardenia Quimica complement our previously announced
acquisition of SPC, a high-end tile coatings manufacturer based in
Italy. These businesses allow Ferro to deliver more innovative products
to the highest end of the global tile market. Endeka is a business that
has impressed us for quite some time. Its primary production site in
Castellon will provide Ferro with necessary production capacity in
Spain, enabling us to avoid capital expenditures to expand our existing
facilities there. The opportunity to backward integrate into key raw
materials and other complementary products allows us to broaden our
product portfolio for customers, and to add manufacturing productivity.

“We are excited to work with the Endeka and Gardenia teams. We look
forward to working with them to accelerate efficiency and innovation
throughout our operations and to build on our market leadership
positions.”

Adjusted Earnings Before Interest, Taxes and Depreciation (“EBITDA”)

Adjusted EBITDA for the transactions excludes the impact of certain
items, primarily associated with purchase accounting adjustments,
transaction-related expenses and acquisition integration costs,
restructuring activities, gains and losses on asset sales concluded by
the companies being acquired, and other adjustments to harmonize their
accounting results to our standard accounting practices. The impact of
adjusting for these items cannot be determined because one of the
transactions has not been completed and it is not possible at this time
to identify the potential amount or significance of these items for the
balance of the year, as they have not occurred yet. Therefore, the
Company is unable to reconcile the full-year 2018 adjusted EBITDA
guidance for the acquisitions.

About Endeka Group

Endeka (http://endekaceramics.com/en/),
along with its forerunner companies, headquartered in Castellon, Spain,
has been servicing the ceramics and tile industries for 60 years. Endeka
has established a strong reputation for excellence through innovation
and market leadership. Endeka prides itself on being on the leading edge
of coatings technology and on its dedication to delivering personalized
service to customers.

About Ferro Corporation

Ferro Corporation (www.ferro.com)
is a leading global supplier of technology-based functional coatings and
color solutions. Ferro supplies functional coatings for glass, metal,
ceramic and other substrates and color solutions in the form of
specialty pigments and colorants for a broad range of industries and
applications. Ferro products are sold into the building and
construction, automotive, electronics, industrial products, household
furnishings and appliance markets. The Company’s reportable segments
include: Performance Coatings (metal and ceramic coatings), Performance
Colors and Glass (glass coatings), and Color Solutions. Headquartered in
Mayfield Heights, Ohio, the Company has approximately 5,300 associates
globally and reported 2016 sales of $1.15 billion.

Cautionary Note on Forward-Looking Statements

Certain statements in this press release may constitute “forward-looking
statements” within the meaning of federal securities laws. These
statements are subject to a variety of uncertainties, unknown risks, and
other factors concerning the Company’s operations and business
environment. Important factors that could cause actual results to differ
materially from those suggested by these forward-looking statements and
that could adversely affect the Company’s future financial performance
include the following:

• demand in the industries into which Ferro sells its products may be
  unpredictable, cyclical, or heavily influenced by consumer spending;
• Ferro’s ability to successfully implement and/or administer its
  optimization initiatives, including its restructuring programs, and to
  produce the desired results;
• currency conversion rates and economic, social, political, and
  regulatory conditions in the U.S. and around the world;
• Ferro’s ability to identify suitable acquisition candidates, complete
  acquisitions, effectively integrate the businesses and achieve the
  expected synergies (including, but not limited to, the Endeka Group,
  Gardenia Quimica, Dip-Tech, SPC, Cappelle Pigments, Electro-Science
  Laboratories, Delta Performance Products, Pinturas Benicarló, Ferer,
  Al Salomi, Nubiola, and Vetriceramici transactions), as well as the
  acquisitions being accretive and Ferro achieving the expected returns
  on invested capital;
• the effectiveness of the Company’s efforts to improve operating
  margins through sales growth, price increases, productivity gains, and
  improved purchasing techniques;
• Ferro’s ability to successfully introduce new products or enter into
  new growth markets;
• the impact of interruption, damage to, failure, or compromise of the
  Company’s information systems;
• restrictive covenants in the Company’s credit facilities could affect
  its strategic initiatives and liquidity;
• Ferro’s ability to access capital markets, borrowings, or financial
  transactions;
• the availability of reliable sources of energy and raw materials at a
  reasonable cost;
• increasingly aggressive domestic and foreign governmental regulations
  on hazardous materials and regulations affecting health, safety and
  the environment;
• competitive factors, including intense price competition;
• Ferro’s ability to protect its intellectual property, including trade
  secrets, or to successfully resolve claims of infringement brought
  against it;
• sale of products and materials into highly regulated industries;
• the impact of operating hazards and investments made in order to meet
  stringent environmental, health and safety regulations;
• limited or no redundancy for certain of the Company’s manufacturing
  facilities and possible interruption of operations at those facilities;
• management of Ferro’s general and administrative expenses;
• Ferro’s multi-jurisdictional tax structure and its ability to reduce
  its effective tax rate, including the impact of the Company’s
  performance on its ability to utilize significant deferred tax assets;
• the effectiveness of strategies to increase Ferro’s return on invested
  capital, and the short-term impact that acquisitions may have on
  return on invested capital;
• stringent labor and employment laws and relationships with the
  Company’s employees;
• the impact of requirements to fund employee benefit costs, especially
  post-retirement costs;
• implementation of new business processes and information systems,
  including the outsourcing of functions to third parties;
• risks associated with the manufacture and sale of material into
  industries making products for sensitive applications;
• exposure to lawsuits in the normal course of business;
• risks and uncertainties associated with intangible assets;
• Ferro’s borrowing costs could be affected adversely by interest rate
  increases;
• liens on the Company’s assets by its lenders affect its ability to
  dispose of property and businesses;
• Ferro may not pay dividends on its common stock in the foreseeable
  future;
• amount and timing of any repurchase of Ferro’s common stock; and
• other factors affecting the Company’s business that are beyond its
  control, including disasters, accidents and governmental actions.

The risks and uncertainties identified above are not the only risks the
Company faces. Additional risks and uncertainties not presently known to
the Company or that it currently believes to be immaterial also may
adversely affect the Company. Should any known or unknown risks and
uncertainties develop into actual events, these developments could have
material adverse effects on our business, financial condition and
results of operations.

This release contains time-sensitive information that reflects
management’s best analysis only as of the date of this release. The
Company does not undertake any obligation to publicly update or revise
any forward-looking statements to reflect future events, information, or
circumstances that arise after the date of this release. Additional
information regarding these risks can be found in our Annual Report on
Form 10-K for the period ended December 31, 2016.

Contacts

Ferro Corporation
Investor Contact:
Kevin
Cornelius Grant, 216-875-5451
Head of Investor Relations
[email protected]
or
Media
Contact:
Mary Abood, 216-875-5401
Director, Corporate
Communications
[email protected]