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ALDILA Signs Merger Agreement With Mitsubishi Rayon America; Board Recommends Stockholder Approval At December 27, 2012, Stockholder Meeting

Stocks in this article: ALDA

POWAY, Calif., Dec. 4, 2012 /PRNewswire/ -- ALDILA, INC. (OTCQX:ALDA) announced today that Aldila has signed a merger agreement (the "Merger Agreement") with Mitsubishi Rayon America, Inc. ("MRA"). The Merger Agreement provides that upon the effectiveness of the merger, Aldila's stockholders will receive cash consideration of $4.00 per share, representing a total purchase price of approximately $22 million for Aldila's common shares and a premium of 60% above Aldila's share price of $2.50 at the close of trading on December 3, 2012.

The Merger Agreement provides for the merger of Aldila with a wholly-owned subsidiary of MRA. In the merger Aldila will continue as the surviving corporation and will become a wholly-owned subsidiary of MRA. MRA is a wholly-owned subsidiary of Mitsubishi Rayon Co., Ltd. ("MRC") and part of the Mitsubishi Chemical group.

Aldila's Board of Directors ("Board") unanimously approved the merger and recommends that Aldila's stockholders approve the merger. The Merger Agreement is the culmination of a strategic review undertaken by Aldila and its exclusive financial advisor, B. Riley & Co. The Board concluded that a sale would be in the best interest of Aldila and its stockholders because joining with MRC will better enable Aldila to capitalize on Aldila's business opportunities offered by the growing demand for carbon fiber based materials in a number of industries. The sale is at a price that the Board believes is attractive to the stockholders and will allow Aldila to leverage MRC's resources to more effectively take advantage of the business opportunities open to Aldila.

"Aldila will be joining a world class Advanced Composite Materials company that is fully integrated from the base raw material acrylonitrile, precursor, carbon fiber and prepreg materials. MRC also offers a leading global graphite golf shaft product line-up under the Mitsubishi Rayon brand. We see unique synergies and opportunities for growing our two business segments of Composite Products and Composite Materials by joining with Mitsubishi Rayon," said Peter Mathewson, Aldila's CEO.

The Board has scheduled a stockholders meeting to be held on December 27, 2012, with a record date of November 21, 2012, for the stockholders to act on and approve the merger. The terms of the merger will be described in the proxy statement for the special meeting, which will be sent to Aldila's stockholders and is expected to be mailed on or about December 6, 2012. Aldila's directors and senior officers and certain stockholders, who collectively hold 2,274,378 shares, or approximately 41%, of Aldila's issued and outstanding Common Stock have entered into a Voting Agreement with MRA and are committed to voting their shares in support of the Merger Agreement.

The Merger Agreement is subject to customary closing conditions, including applicable government and regulatory filings and approvals.  The merger will close once the shareholders approve the merger and the other closing conditions are satisfied.

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