BSMB Successfully Closes Latest Private Equity Fund.

NEW YORK -- Bear Stearns Merchant Banking ("BSMB"), a leading private equity firm focusing on middle market investments, today announced the successful final close of its latest fund, Merchant Banking Partners III. The fund size is approximately $2.7 billion. BSMB is widely known for its expertise in financial services, retail and branded consumer goods. BSMB began its highly successful fundraising process in September 2005 and held an initial closing with commitments in excess of $2.0 billion in February 2006. Despite strong investor demand, the Partners agreed to cap third party commitments at $2.5 billion. Incremental commitments from BSMB will bring the fund's aggregate commitments to approximately $2.7 billion.

"We are very pleased with the closing of Merchant Banking Partners III. The strong demand for this fund is a testament to our proven track record, our industry expertise and our ability to serve as a value-added partner to the management teams of our portfolio companies," said John Howard, Chief Executive Officer of BSMB. "We capped our fund in order to continue our investment focus on middle market opportunities."

"We are thrilled to have received such overwhelming support from our existing investors as well as support from a wide range of new limited partners both domestically and internationally," said Gwyneth Ketterer, Chief Operating Officer of BSMB. "The broadening and deepening of our investor base further demonstrate the success of BSMB's franchise. Limited partners in this fund include BSMB's existing investors as well as a broad range of new limited partners, including many well-known endowments, foundations, public and corporate pensions and leading funds-of-funds."

BSMB's target equity investment is $100 million to $200 million per transaction but the firm has the capability to invest substantially more capital. BSMB will make investments in a wide variety of transaction types including: traditional leveraged buyouts, corporate carve-outs, growth situations, special situations and minority recapitalizations.

Howard added, "Our investment focus will continue to remain on our core silos of financial services, retail and branded consumer goods as well as on other select middle-market opportunities. We expect that our continued ability to generate proprietary deal flow and our unique partnership model with entrepreneurs will be key drivers of this fund's success."

Credit Suisse acted as the placement agent for the fund.

About BSMB:

BSMB, the private equity affiliate of The Bear Stearns Companies, Inc., (NYSE: BSC) invests private equity capital in compelling leveraged buyouts, recapitalizations and growth capital opportunities alongside superior management teams. Since its formation in 1997, BSMB has been an investor in over 50 portfolio companies across a broad range of industries. BSMB currently manages more than $4.5 billion of institutional private equity capital. Recent investments by BSMB include: ACA Capital Holdings, Aearo Technologies (exited in 2006), Balducci's, CamelBak Products, Cavalry Investments, Churchill Financial Holdings, Hand Innovations (exited in 2006), Multi Packaging Solutions, New York & Company (NYSE: NWY), Reddy Ice (NYSE: FRZ), Seven For All Mankind, Stuart Weitzman, Transamerican Auto Parts Company and Vitamin Shoppe. More information about BSMB can be found at www.bsmb.com.