Denver Investment Firm, KRG Capital Partners, Recapitalizes Leading Supplier of Mail-Order Medical and Pharmaceutical Supplies.

Business Editors/Health/Medical Writers

DENVER--(BUSINESS WIRE)--Nov. 21, 2003

KRG Capital Partners ("KRG"), the largest buyout firm headquartered in Denver, announced today the recapitalization of Chronic Care Solutions, Inc., the first portfolio company in KRG's second fund, KRG Capital Fund II, L.P.

Proceeds from the recapitalization were used to acquire a complementary add-on acquisition, refinance the Company's existing indebtedness and pay a common dividend to Chronic Care's investors, including management shareholders. The dividend payment resulted in a 1.7x cash-on-cash return and a realized IRR of 48% to KRG Capital Fund II. More importantly, KRG Capital Fund II also retained 94% of its ownership position in Chronic Care, providing fund investors the opportunity to realize additional significant future value from this investment. Antares Capital Corporation (Agent), Merrill Lynch and Key Bank provided senior debt for the recapitalization while American Capital Strategies provided mezzanine financing.

"As the first liquidity event in our $450 million Fund II, this recapitalization gets us off to a great start toward realizing a meaningful return for our limited partners," said Mark King, Managing Director and Co-Founder of KRG. "We are very excited about the continued growth opportunities within Chronic Care, and would like to thank Antares, Merrill Lynch, Key Bank and American Capital Strategies for all of their hard work on completing the recapitalization."

Chronic Care, founded in 1994, is a leading supplier of direct-to-consumer mail-order medical and pharmaceutical supplies, focused on the diabetic, respiratory and ostomy disease segments. The company has achieved nine consecutive years of record revenue and EBITDA growth, and has developed the infrastructure necessary to continue these trends. "Chronic Care's management team has proven they can scale this business and generate significant organic growth," said Mr. King. "Our partnership provides the Company with an additional avenue for value creation by supplying the additional capital and management resources necessary to complete complementary add-on acquisitions."

About KRG Capital Partners

KRG Capital Partners specializes in acquiring and recapitalizing unique and profitable middle-market companies. KRG seeks investment opportunities where KRG's professionals work in concert with owners and operating managers who are committed to expanding their companies and becoming industry leaders. The result is a partnership that focuses on creating a significantly larger enterprise through a combination of internal growth and complementary acquisitions. This focus is directed to providing more products, services and or capabilities to the end customer.

KRG seeks new platforms that capitalize on global macroeconomic and geographic trends including (1) aging population (2) infrastructure improvement (3) outsourcing services (4) healthcare services/medical devices/life sciences and (5) consumer products. Target industries include Healthcare, Construction Materials, Infrastructure, Outsourcing, Life Science Contract Manufacturing, Specialty Gases, Specialty Coatings, Education/Training and Consumer Products. For more information about KRG Capital Partners, please visit www.krgcapital.com or contact Rob Martin at [phone].

About Chronic Care Solutions, Inc.

Chronic Care's unique business model provides its patients/customers with the highest quality products available coupled with friendly, responsive customer service. The Company serves over 70,000 patients throughout the United States and Puerto Rico under the names Diabetic Supply of USA, Respiraratory Supply of USA, RX Supply of USA, and Ostomy Supply of USA.

Chronic Care provides its patients with the highest quality medical and pharmaceutical supplies from the world's premier manufacturers such as Roche, Bayer, Johnson & Johnson and others. Supplies distributed include glucose monitoring devices, glucose test strips, lancing devices, lancets, syringes, insulin pumps, prescription pharmaceuticals (including insulin), respiratory supplies and ostomy supplies. For more information on Chronic Care, please visit www.diabeticsupplyofusa.com.