Graham Partners Unearths Another Promising Industrial Buyout

Graham Partners continues its swift investment pace, completing its third platform investment in just over a month. Its latest buyout, Infiltrator Systems, Inc., of Old Saybrook, Connecticut (www.infiltratorsystems.com), is a manufacturer of plastic chambers for onsite wastewater management systems in the septic leachfield and stormwater markets. The Company’s flagship products are large, plastic, arch-shaped chambers that are joined together in excavated trenches to provide the means for septic tank effluent or stormwater runoff to leach into the soil. Infiltrator’s growth is tied to the ongoing conversion from traditional gravel-and-pipe leachfield systems to plastic chamber systems.

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

Rob Newbold, Managing Principal of Graham Partners, commented: “The Infiltrator acquisition is representative of our conviction that significant growth potential exists in companies that are driving conversions in their industries from traditional materials to higher quality, lower cost alternatives. Infiltrator will continue to benefit from further penetration of its plastic chamber systems due to the many functional and cost saving advantages versus old fashion gravel-and-pipe alternatives.”

“This is a very exciting time for Graham to partner with us, as our chambers have revolutionized the septic industry and are well positioned to further exploit opportunities that lie ahead in wastewater and stormwater management. With Graham Partners’ intimate knowledge of plastic manufacturing businesses, they are the perfect partner to help us accelerate our next phase of growth,” states Roy Moore, President of Infiltrator. Infiltrator is the largest supplier of plastic leachfield chambers in the world with an estimated 80% market share and the industry’s broadest product offering. The Company supplies installers (contractors) through a network of more than 585 distributors in more than 1,025 locations throughout North America. Infiltrator has created significant barriers to entry in its industry niche due to the Company’s dominant brand name and distribution network, extensive regulatory approval, proprietary designs, custom blends of recycled plastics and superior manufacturing know-how.

Though terms were not disclosed, Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services Inc., provided the senior debt financing with American Capital Strategies Ltd. providing subordinated debt to support the transaction. Goldsmith Agio Helms was the seller’s advisor in effecting the transaction.

About Graham Partners: Graham Partners is a leading, lower middle market industrial private equity firm based in suburban Philadelphia with over $800 million under management. Graham Partners is sponsored by 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:

Josh Wilson (jwilson@grahampartners.net)
Rob Newbold (rnewbold@grahampartners.net)
Christina Morin (cmorin@grahampartners.net)
Tel: (610) 408-0500 / Fax: (610) 408-0600
www.grahampartners.net