DeCrane Aircraft Holdings Acquires PATS Inc.; Expands DeCrane's Market Leading Presence Serving the High-End Corporate Jet Market.

EL SEGUNDO, Calif.--(BUSINESS WIRE)--Jan. 22, 1999--

Includes a Major Seven-Year Contract With Boeing Business Jet 

DeCrane Aircraft Holdings Inc., a leading manufacturer of avionics components and an avionics systems integrator for the commercial and high-end corporate aircraft industry, Friday announced it has expanded its presence in the high-end corporate jet market by acquiring PATS Inc., a leading designer, manufacturer and installer of auxiliary fuel tanks and other equipment for the commercial and corporate jet markets.

The company further reported that PATS has a new seven-year contract with Boeing.

Fits DeCrane's Key Acquisition Criteria

Commenting on the acquisition, DeCrane Chief Executive Officer R. Jack DeCrane said, "This acquisition signifies our commitment toward becoming a major player servicing the high-end corporate jet market, while further diversifying our revenue stream and lessening our dependence on the commercial original equipment market cycle.

"PATS was especially appealing to us because it closely fit with our key acquisition criteria, particularly from the standpoint that it enjoys a No. 1 market position within its niche, operates in a market segment which is sizable and growing -- 2,750 aircraft deliveries are expected from 1999 to 2003 -- and has significant growth prospects given its strong backlog."

DeCrane stated, "We are quite excited as well by PATS' customer base, which includes Boeing, Bombardier, Learjet, Cessna, Raytheon and Lockheed Martin. Clearly, there are synergies in our operations that we hope to capitalize upon, most notably in terms of our engineering capabilities and the enhanced sales and marketing opportunities to both better service those customers we already share and new customers, by cross-selling our other interior cabin products and installation services."

DeCrane noted that PATS represents the first major acquisition it has completed since it was acquired by DLJ Merchant Banking Partners II, L.P. in August 1998. The PATS acquisition was structured as an all-cash transaction with financing provided through DeCrane's existing consortium of lenders. Other terms of the transaction were undisclosed.

World Leader in Aircraft Fuel Tanks, Patented Design

Founded in 1976, PATS has successfully developed a blue chip customer base. According to DeCrane, PATS' proprietary design and tank construction have made it a world leader in the auxiliary fuel tank market.

Included in the system are flight deck instrumentation, wing refueling controls and fuel quantity systems. Additionally, PATS' auxiliary power units are standard equipment for OEMs such as Cessna and Raytheon.

Boeing Total Contract Valued at About $180 Million

In addition, the company reported PATS has a seven-year contract for the manufacture and installation of auxiliary fuel tanks for the Boeing Business Jet ("BBJ").

According to DeCrane, retrofitting the BBJ (a 737 derivative) with the auxiliary fuel tank extends the aircraft's range up to the level required for today's long-range high-end corporate aircraft.

Logistically, execution of the contract will entail that Boeing aircraft are flown from Seattle, Wash. to PATS' Georgetown, Del., installation facility, after which the planes proceed on to completion centers. The company's installation facility can service up to three aircraft at one time.

Boeing Business Jet President Borge Boskov said, "We are pleased to know DeCrane has acquired PATS, and that it will be bringing its expertise in managing large scale engineering and systems integration projects to oversee the execution of our contract.

"Boeing has been doing business with DeCrane for a long time in numerous of their other product areas and we are quite confident in their ability to successfully integrate PATS into their operation."

Newly Appointed President of PATS Replaces Founder

DeCrane senior executive Bob Martin has been appointed the new president of PATS, replacing PATS' founder Harvey Patrick, who is retiring. Martin will also continue in his current position as head of DeCrane's Aerospace Display Systems subsidiary. Martin is a 33-year veteran of the aerospace industry.

DeCrane Aircraft Holdings Inc., which was acquired in August of 1998 by a subsidiary of DLJ Merchant Banking Partners II, L.P., is a leading manufacturer of avionics components and a provider of avionics systems integration services in certain niche markets of the commercial aircraft and high-end corporate jet industries.

The company's products and services typically are utilized to provide an interface between an aircraft and its avionic systems.

DLJ Merchant Banking Partners II, L.P., a $3 billion fund dedicated to private equity and equity-related investments, seeks significant capital appreciation through domestic and international investments in common or preferred stock and debt or other securities in leveraged acquisitions and corporate joint ventures.

Since its formation in November 1996, DLJ Merchant Banking Partners II, L.P. has consummated (or contracted to consummate) 26 transactions valued at approximately $12 billion, the largest of which include Ameriserve, Duane Reade, Insilco, Thermadyne and Von Hoffman Press.

For more information about DeCrane Aircraft Holdings Inc. via facsimile call 800/PRO-INFO and dial client code "DAHX".

Except for historical information contained herein, this document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks and uncertainties that may cause the company's actual results or outcomes to be materially different from those anticipated and discussed herein. Further, the company operates in an industry sector where securities values may be volatile and may be influenced by regulatory and other factors beyond the company's control. Important factors that the company believes might cause such differences are discussed in the cautionary statements accompanying the forward-looking statements in the company's reports filed with the Securities and Exchange Commission. In assessing forward-looking statements contained herein, readers are urged to read carefully all cautionary statements contained in those filings with the Securities and Exchange Commission.