News

Acquisition

San Francisco, Houston and Shelton, CT October 04, 2005

Genstar Capital, Sterling Group Complete Acquisition of Panolam Industries

Private equity firms Genstar Capital, LLC and The Sterling Group, L.P. today announced that they have finalized the acquisition of Panolam Industries International, Inc. in a transaction valued at $345 million. Management of the purchased organization will also participate in the company’s ownership.

With five manufacturing facilities and three distribution centers in the US and Canada, Panolam designs and manufactures decorative laminate panels that serve as durable and economical substitutes for natural surfacing materials such as wood, stone and ceramic. Commercial and residential uses of these laminates include cabinets, countertops, display cases and restaurant furniture. Panolam is based in Shelton, Connecticut.

“We’re looking forward to working with Genstar and Sterling to continue to build on the successes we’ve achieved,” said Bob Muller, chairman, president and chief executive officer of Panolam. “Our customers depend on Panolam’s commitment to top-quality, cost-efficient products, and serving our customers remains our top priority.”

“We understand this industry very well given our ownership of Panolam from 1996 to 1999, and we couldn’t be more excited to be working with Bob Muller and his team again,” said J.P. Conte, chairman and managing director of Genstar Capital. “We are particularly looking forward to supporting the company’s expansion into new markets and new products.”

Genstar and Sterling’s acquisition of Panolam was financed with $150 million in high yield debt and a $135 million senior term loan. Financing was led by Credit Suisse First Boston and Jefferies & Company.

About Genstar Capital, LLC
Based in San Francisco, Genstar Capital (www.gencap.com) is a private equity investment firm that makes leveraged investments in quality middle-market companies. Genstar Capital works in partnership with management to transform its portfolio companies into industry-leading businesses. With more than $900 million of committed capital under management and significant experience investing in businesses, Genstar focuses on selected segments of the life sciences, business services, and industrial technology sectors.

About The Sterling Group, L.P.
The Sterling Group (www.sterling-group.com) is a private equity investment firm founded in 1982 that targets controlling interests in leveraged buyout investments in basic manufacturing, industrial services and distribution companies. Typical enterprise values of these companies range from $100 million to $500 million. Sterling partners with management teams to acquire companies where it has identified specific opportunities to grow and improve the business. Sterling has sponsored the buyouts of 30 portfolio companies and numerous add-on acquisitions for a total transaction value greater than $7 billion. Currently Sterling has $600 million of committed capital under management through two funds, including the recently closed Sterling Group Partners II, L.P. Prior to 1991 Sterling raised equity on an individual transaction basis. Current portfolio companies include Exopack, North American Construction Group and Propex Fabrics.

About Panolam Industries International, Inc.
Panolam Industries International, Inc. is the North American market leader and innovator in the decorative laminate panel industry. The company offers an integrated, all-inclusive product array at a broad range of price points, including decorative overlay papers, industrial laminates and specialty resins. Panolam employs more than 1,000 people in its five manufacturing facilities (Huntsville, Ontario; Norcross, GA; Albany, OR; Auburn, ME; Morristown, TN) and three distribution centers (Elkhart, IN; Rancho Cucamonga, CA; Covington, GA).

For additional information:
Genstar Capital
Andrea Ginsberg
(415) 751-2017
aginsberg@gencap.com

The Sterling Group, L.P.
Kevin Garland
(713) 877-8257
kgarland@sterling-group.com



News

Houston, TX May 25, 2005

The Sterling Group Closes $470 Million Private Equity Fund

The Sterling Group, L.P., a Houston-based private equity firm focused on acquiring North American middle-market manufacturing, industrial service and distribution companies, today announced the final close of Sterling Group Partners II, L.P. (“Fund II”), with aggregate capital commitments of $470 million, including $20 million from the Principals of Sterling. Additionally, The Sterling Group announced the addition of two new members to the Sterling team. Gary Rosenthal, a former Principal with Sterling from 1989 to 1990, has rejoined as a Principal, and Kelly Boots has been named Chief Financial Officer.

The Sterling Group founded more than 23 years ago, is one of the oldest private equity firms in the United States. Sterling’s six Partners – Chairman Frank Hevrdejs, Billy Oehmig, Hunter Nelson, John Hawkins, Kevin Garland and Gary Rosenthal – have over a combined 80 years of experience with The Sterling Group.

The firm will use Fund II to continue to execute its strategy of partnering with management teams to drive strategic, operational and financial improvements in its portfolio companies. Historically, this has often occurred in acquisitions of spin-outs of non-core divisions of large corporations and family-owned businesses as well as buy-and-build strategies in fragmented industries.

Limited partners in Fund II include a diverse group of pension plans, fund-of-funds, university endowments, financial institutions, foundations and individuals. Lazard Freres acted as Sterling’s exclusive global placement agent for Fund II, and Paul, Weiss, Rifkind, Wharton and Garrison LLP acted as legal counsel.

About The Sterling Group, L.P.
The Sterling Group, founded in 1982 by the late Gordon Cain and Frank Hevrdejs, is a Houston-based private equity firm focused on acquiring middle-market manufacturing, industrial services and distribution companies between $100 million and $500 million in enterprise value. In total, the firm has made 29 platform and numerous add-on acquisitions totaling over $7 billion in transaction value. For more information, visit www.sterling-group.com.