Castle Harlan, Inc., the New York-based private equity firm, and its Australian affiliate, CHAMP Private Equity, announced today that they had completed the sale of United Malt Holdings (UMH), the world’s fourth largest producer of malt for the distilling and brewing industries and a company that has grown more than four-fold since the two firms acquired it three years ago.

          Castle Harlan and CHAMP sold the company to GrainCorp Ltd. (GNC:AX), a major bulk-grain handler and trader in Australia that now becomes an international agribusiness with operations in Australia, the United States, Canada and the United Kingdom.  The purchase price was $655 million (A$757 million).

          The two firms had acquired UMH in September 2006 from Conagra Foods, Inc., a U.S. company, and Tiger Brands of South Africa.  The price they paid at the time was not disclosed, but they invested a total of $90.54 million in equity, approximately 55 percent from Castle Harlan Partners, and 45 percent from CHAMP.

          Thus, Castle Harlan said, the total dollar return to the two firms was 4.5 times the equity invested, and the transaction produced an internal rate of return of approximately 80 percent.

          David Pittaway, a senior managing director at Castle Harlan and the firm’s lead negotiator on the UMH transaction, said that, “all things considered, it really has been a textbook example of how private equity firms and management can work together to add value to the acquired assets.”

He noted that since the two firms acquired UMH, the company’s earnings before interest, taxes, depreciation and amortization (EBITDA) had grown from $27 million to approximately $114 million, an increase of more than 400 percent.

          “This was largely a result of steps we and management had taken,” Pittaway said, “to significantly enhance the value of these properties.”

          There were two additional acquisitions, the 40 percent of the U.K. operation that was not part of the original deal, and the purchase of North Country Malt Group, a small distributor of brewing products that strengthened UMH’s leading position with microbrewers, Pittaway said.

          “But the key thing we did,” he noted, “was to make fundamental changes in the business model.

“UMH had been regarded as a commodity grain processor, but we transformed it into a specialty processor of malt, producing malt to the exacting specifications of our customers.  As a result, UMH became the number 1 or 2 supplier to breweries in quality ratings, and customers were willing to enter into long-term agreements for exactly fulfilling their needs.”

In the United Kingdom, Pittaway said, “we changed our focus from large breweries to distillers of scotch whisky, who now account for more than 50 percent of sales, up from 20 percent just a few years ago.

“And we are expanding our production capacity, with a new malt house that has come on line in Scotland that was built for the needs of the distilling industry and another under construction in Brisbane that will begin operating next year to meet increased demand from Southeast Asia.  The company expects to increase its production capacity by 14 percent by early 2011.

“Those are just a few examples of the important steps that were taken to build the value of this enterprise.”

UMH’s headquarters is in Omaha, Nebraska.  It comprises four independently operated malting companies:  Great Western Malting in the United States, Barrett Burston Malting in Australia, Canada Malting in Canada, and Bairds Malt in the United Kingdom.

Castle Harlan, founded in 1987, invests in controlling interests in the buyout and development of middle-market companies in North America and Europe. Its team of 19 investment professionals has completed 49 acquisitions since its inception with a total value in excess of $9 billion.  Castle Harlan currently manages investment funds with equity commitments of $2.5 billion.  The firm traces its roots to the start of the institutionalized private-equity business in the late 1960s.

Castle Harlan's current portfolio companies, which employ more than 42,000 people, include Ames True Temper, a leading manufacturer of lawn and garden tools and accessories; Perkins & Marie Callender’s, Inc., which operates and franchises 618 family restaurants in the United States and Canada, and Baker & Taylor, a prominent domestic and international distributor of books and entertainment products to libraries and retailers.

CHAMP Private Equity was formed in 2000 by Castle Harlan, Inc., of New York and Australian Mezzanine Investments Ltd. (AMIL) of Sydney.  CHAMP and AMIL constitute Australia’s longest established private equity investor, and funds advised by them have made some 60 investments since 1987 in companies operating in Australia and New Zealand.  The combined worldwide funds of CHAMP and Castle Harlan amount to approximately US$5.5 billion.

CHAMP Funds have made investments in a variety of sectors in companies such as Austar Communications, Bradken Limited and Penrice Limited.  Current CHAMP Private Equity investments include International Energy Services, Health Care Australia, Manassen Foods, Study Group International, Bluestar Print Group, Golding Contractors, LCR Lindores, Alleasing and Centric Wealth.

Castle Harlan, Inc., the New York private equity investment firm, and CHAMP Private Equity, its affiliate based in Sydney, Australia, confirmed today that they have agreed to sell United Malt Holdings (UMH), one of the world’s largest producers of malt for the brewing and distilling industries, to GrainCorp, Ltd., a major Australian bulk-grain handler.  The transaction would be valued at US$655 million (A$757million).

The confirmation followed a GrainCorp announcement of the proposed deal earlier today (Tuesday morning, Sydney time).

United Malt is made up of four malting companies:  Great Western Malting in the United States; Canada Malting in Canada; Barrett Burston Malting in Australia, and Bairds Malt in the United Kingdom.  Castle Harlan and CHAMP acquired the businesses in September 2006 from Conagra Foods, Inc., a U.S. company, and Tiger Brands of South Africa.

GrainCorp (GNC.AX) is a leading agribusiness company listed on the Australian Securities Exchange with a market capitalization today of A$806 million.

David Pittaway, senior managing director at Castle Harlan, said “the GNC and UMH management teams have identified significant benefits that will result from the combination of these two great businesses.”

He added that UMH would bring “important European, North American and Australasian markets and relationships” to GrainCorp.

CHAMP Director John Haddock called GrainCorp “a natural owner of UMH’s assets; they are a highly complementary fit.”  He added that, given its current plant expansion program, “UMH is well-positioned to continue the strong growth of its malting business globally.”

Castle Harlan, founded in 1987, invests in controlling interests in the buyout and development of middle-market companies in North America and Europe. Its team of 19 investment professionals has completed 49 acquisitions since its inception with a total value in excess of $9 billion.  Castle Harlan currently manages investment funds with equity commitments of $2.5 billion.  The firm traces its roots to the start of the institutionalized private-equity business in the late 1960s.

Castle Harlan's current portfolio companies, which employ more than 42,000 people, include Ames True Temper, a leading manufacturer of lawn and garden tools and accessories; Perkins & Marie Callender’s, Inc., which operates and franchises 618 family restaurants in the United States and Canada, and Baker & Taylor, a prominent domestic and international distributor of books and entertainment products to libraries and retailers.

CHAMP Private Equity was formed in 2000 by Castle Harlan, Inc., of New York and Australian Mezzanine Investments Ltd. (AMIL) of Sydney.  CHAMP and AMIL constitute Australia’s longest established private equity investor, and funds advised by them have made some sixty investments since 1987 in companies operating in Australia and New Zealand.  CHAMP (along with AMIL) are well known pioneers in the private equity sector and for their track record in building strong companies by partnering closely with management to implement successful growth strategies.  The combined worldwide funds of CHAMP and Castle Harlan exceed A$5 billion.

CHAMP Funds have acquired and successfully exited from investments across a variety of sectors, in companies such as Austar Communications, Bradken Limited and Penrice Limited.  Current CHAMP Private Equity investments include: International Energy Services, Health Care Australia, Manassen Foods, Study Group International, Bluestar Print Group, Golding Contractors, LCR Lindores, Alleasing and Centric Wealth.

NEW YORK, September 12, 2006 - Castle Harlan, Inc., the New York-based private-equity investment firm, and CHAMP Private Equity, its affiliate based in Sydney, Australia, announced today that private-equity investment funds they manage have acquired Great Western Malting, Canada Malting Company, Barrett Burston Malting and a 60 percent interest in Bairds Malt to create United Malt Holdings ("UMH"), one of the world's largest producers of malt for use in the brewing and distilling industries.

UMH has revenues in excess of US$400 million. It operates in the United States, trading as Great Western Malting; Canada, trading as Canada Malting Company; Australia, trading as Barrett Burston Malting; and the United Kingdom, where it owns a 60 percent interest in Bairds Malt. The businesses were acquired from Conagra Foods, Inc., of the United States and Tiger Brands of South Africa.

David Pittaway, a Castle Harlan senior managing director, said, "We have been very impressed by UMH's management team, led by chief executive officer Jim Anderson, and look forward to working together in partnership to grow this business. The company is a leader in its industry, serving many of the world's largest brewers and distillers. Its global presence means that it is very well positioned to serve these customers in any of the countries in which they operate."

Jim Anderson, chief executive officer of UMH, said, "Market conditions in the malt industry continue to be challenging; however, UMH focuses on distinguishing itself by matching our customers' critical measurements for quality, service and innovation. It is very important to us to create successful long-term relationships with our customers. The whole management team looks forward to working with Castle Harlan and CHAMP to leverage their expertise as we seek to further grow and improve the UMH business."

John Haddock, an associate director with CHAMP Private Equity, commented, "Like the highly successful Austar investment by CHAMP and Castle Harlan, the acquisition of UMH highlights the capacity that the two firms have to complete difficult multi-jurisdictional transactions."

UMH has approximately one million tons of malt production capacity in 14 plants in four countries.

Castle Harlan, founded in 1987, invests in controlling interests in the buyout and development of middle-market companies in North America and Europe. Its team of 19 investment professionals has completed 45 acquisitions since its inception with a total value in excess of $8 billion. It is currently investing its fourth fund, Castle Harlan Partners IV, which closed in August 2003 with capital commitments of $1.2 billion. The firm traces its roots to the start of the institutionalized private-equity business in the late 1960s.

Castle Harlan's current portfolio companies, which employ more than 42,000 people, include Ames True Temper, a leading manufacturer of lawn and garden tools and accessories; Perkins & Marie Callender's, Inc., which operates and franchises 618 family restaurants in the United States and Canada, and Baker & Taylor, a prominent domestic and international distributor of books and entertainment products to libraries and retailers.

Castle Harlan Australian Mezzanine Partners Pty Limited ("CHAMP Private Equity") was founded in 2000 by Australian Mezzanine Investments and Castle Harlan and is Australasia's largest independent manager of private equity funds. It is adviser to the CHAMP I and CHAMP II funds, which have funds of approximately A$1.5 billion for investment in buyouts in Australasia.

CHAMP Private Equity and its predecessor have made private equity investments in more than 30 businesses, including Austar Communications Limited, the provider of subscription TV services to rural and regional Australia, and Bradken Limited, a leading manufacturer of steel based consumables and capital equipment for the mining and freight rail industries.

Current CHAMP Private Equity investments include ADR, Australia's largest operator of discount department stores, and Manassen Foods, the leading importer and distributor of branded food products in Australia.