Graham Partners Picks-up Speed

Graham Partners is revving its engines in search of small industrial buyout opportunities. LINE-X will be the pacesetter for many more investments to come. LINE-X, of Santa Ana, California, is a global provider of branded spray-on pick-up truck bedliners through a franchise network. The Company utilizes a proprietary urethane resin formulation that is applied to truck beds at fixed locations. LINE-X is the beneficiary of a shift away from drop-in bedliners to spray-on liners, which have superior performance and appearance characteristics, and also eliminate substantial costs related to drop-in liner distribution channel stocking and handling. Additionally, LINE-X operates an Industrial Coatings Division that offers blast mitigation for U.S. government agencies and industrial customers, salt-water and non-skid protection for the Navy, and spill protection for oil companies.

LINE-X represents Graham’s eleventh platform company investment and its first buyout for Graham II, which closed at $465 million in April 2005. Graham’s strategy is to acquire industrial businesses, such as LINE-X, which are benefiting from product substitution or raw materials conversion trends in their industries, where Graham can utilize its extensive operating resources and industrial network to add value during its holding period.

“We are proud and excited to have the opportunity to work with Graham Partners,” states Scott Jewett, CEO of LINE-X. “LINE-X has experienced one of the most successful franchise rollouts in history, and has become one of the sixty largest franchises worldwide. This solid franchisee base, coupled with the active support of Graham, provides an excellent foundation for future growth.” Joe May, Managing Principal of Graham Partners, added, “LINE-X is a perfect fit for us, given our heritage of growing leading, middle market plastics-processing companies, our expertise in capitalizing on conversion opportunities, and our previous successes in partnering with franchise-based businesses.”

LINE-X is a leading player in the rapidly growing $485 million spray-on bedliner market, with an international network of approximately 540 franchisees located primarily in the U.S., as well as Canada, Mexico, Latin America, Asia, Europe, and Australia. LINE-X has experienced greater than 22% compounded annual sales growth over the last three years. Industry research indicates that new truck bedliner penetration increased from 54% in 2003 to 63% in 2005, primarily driven by consumers’ increasing desire to extend the useful life of their vehicles. Spray-on liner usage is projected to continue escalating, as a result of further overall growth in bedliner installations, as well as increased adoption of spray-on liners at the expense of traditional drop-in liner alternatives.

Though terms were not disclosed, Allied Capital Corporation (NYSE: ALD), a leading business development company with total assets of more than $3 billion, provided the debt financing for the transaction.

About Graham Partners: Graham Partners is a leading, lower middle market industrial private equity firm based in suburban Philadelphia with over $700 million under management. Graham Partners is an investment affiliate of the privately held Graham Group of York, Pennsylvania, an industrial and investment concern with global interests in plastics, packaging, machinery, building products and outsource manufacturing. Graham Partners seeks to acquire industrial companies with revenues between $20 million and $350 million that participate in manufacturing niches where it can leverage its unique combination of operating resources and financial expertise.

FOR FURTHER INFORMATION CONTACT:

Joe May (jmay@grahampartners. net)
Josh Wilson (jwilson@grahampartners. net)
Christina Morin (cmorin@grahampartners. net)
Tel: 610.408.0500 / Fax: 610.408.0600
www.grahampartners.net