Arsenal Capital Partners announced today that it has successfully closed its second fund, Arsenal Capital Partners II LP, at $500 million of committed capital. Investor demand for the fund well exceeded both the $400 million target and the $500 million hard cap that the principals of Arsenal had set prior to fundraising.

Arsenal Capital Partners is a private equity firm that employs a sector-focused and operational improvement approach to creating value with niche manufacturing and service sector companies in the lower middle market.

The fundraising process took approximately nine months to complete. Including its first fund, closed in 2003, Arsenal now manages a total pool of capital of $800 million. The Arsenal Capital Partners team is a talented group of 23 professionals, led by four Managing Directors, Terrence Mullen, James Marden, Barry Siadat, and Jeffrey Kovach.

In Fund II, Arsenal will continue to target companies with enterprise values in the range of $50-250 million and EBITDA of $10-50 million where it believes it can demonstrate its differentiated approach to investing and adding value. Arsenal's investment focus areas will also remain consistent, which is to invest in niche market leading specialty products and specialty services businesses in segments of healthcare, specialty chemicals, aerospace/defense, specialty components, business services, and distribution/logistics.

In addition to completing Fund II other recent events include Arsenal's sale of portfolio company Scientific Protein Laboratories LLC to American Capital Strategies (Aug 2006), and the creation of Vertellus Specialties with the combination of two of its portfolio companies, Rutherford Chemicals and Reilly Industries.

INFO SOURCES

Arsenal Capital Partners

FIRMS

Arsenal Capital Partners invests in specialty product and services companies in industries where it has substantial prior experience and expertise and can support management teams to drive growth and improve productivity. Arsenal focuses on growing, niche markets including healthcare, specialty chemicals, aerospace/defense, specialty components, business services, and distribution/logistics.

INVESTORS INCLUDE

Approximately 65% of Fund II investors are U.S.-based and 35% are international, with a nice balance of endowments and foundations, pension funds, financial institutions, universities, and investment funds." Returning investors include Adams Street Partners, National City Equity Partners, LLC, PPM America, RCP Advisors, Oklahoma Police Pension and Retirement System and the Northeast Utilities Service Company Retirement Plan. New investors include ATP Private Equity Partners, Grove Street Advisors, PKA, Skandia Liv, and Swiss Re.