KRG Capital Completes Sale of Accellent to KKR for $1.3 Billion; Sale Represents Fifth Liquidity Event for KRG's Fund I.

DENVER -- KRG Capital Partners (KRG), a Denver-based private equity firm, announced today the closing of the previously announced sale of its portfolio company, Accellent Inc. (formerly UTI Corporation), to an affiliate of Kohlberg, Kravis, Roberts & Co. (KKR), in a transaction valued at approximately $1.3 billion. Accellent is the largest provider of integrated contract manufacturing and design services to the medical device industry.

KRG made its initial investment in Accellent in 1999, through the acquisition of Denver-based Star Guide Corporation, which at the time had annual revenues of approximately $10 million and Ebitda of approximately $4 million. KRG then embarked on an acquisition and organic growth strategy designed to build the industry leading contract manufacturer serving the medical device industry. Under KRG's ownership, the company completed nine additional strategic acquisitions in targeted high growth medical device segments, resulting in pro forma (assuming Accellent's recent acquisitions of Campbell Engineering and Machining Technology Group were completed at the beginning of the period) trailing twelve month ended September 30, 2005, revenues of approximately $472 million and pro forma adjusted Ebitda for such period of approximately $100 million as of the date of closing. "This was a highly successful investment for KRG validating our original investment thesis for the medical device contract manufacturing sector," said Bruce Rogers, KRG Co-Founder and Managing Director.

KRG's original investment thesis, developed prior to its initial investment in Accellent, was based upon the increased "outsourcing" trend among the major medical device companies. This trend resulted in major medical device manufacturers requiring more services and capabilities from their strategic partners such as Accellent, including a more comprehensive outsourcing and contract manufacturing solution. KRG's strategy was to build a full service contract manufacturer that could provide the major medical device companies broad capabilities in design and engineering services, precision component fabrication, finished device assembly and complete supply chain management. This strategy resulted in the creation of Accellent, which has now positioned itself as the largest player and an industry leader in the medical device contract manufacturing sector.

In 2003, KRG recruited Ron Sparks, Accellent's current CEO, from Smith & Nephew, a major medical device manufacturer. This followed KRG's recruitment of other Accellent executives including CFO Stew Fisher, who joined Accellent in 2001. Under the leadership of Accellent's management team and KRG, Accellent completed its largest acquisition, MedSource Technologies, in the summer of 2004 in a $210 million transaction. That transaction combined two of the largest industry players at the time. Following the acquisition, the operations of the two companies were successfully integrated over an 18 month period, achieving substantial synergies. Rogers remarked: "We recruited an experienced and very talented senior executive team that led to the successful acquisition and integration of several key add-on acquisitions, including MedSource. This was followed by a well positioned rebranding of the company under the 'Accellent' name and a realignment of the company into three major markets: cardiology, endoscopy and orthopaedics. The Company has evolved into a clear industry leader with comprehensive capabilities and key market presence."

The equity invested by KRG in Accellent to support the acquisitions was also supplemented by direct co-investment by several of KRG's limited partners and co-investors, including among others, CMS Companies, AIG, St. Paul Travelers, CSFB and First Analysis Corporation. In connection with the MedSource acquisition, KRG brought in DLJ Merchant Banking Partners, an affiliate of CSFB, to provide an additional $89 million of equity financing. Following DLJ's investment, KRG continued to lead the investment and controlled the Board of Directors with Bruce Rogers, Co-Founder and Managing Director of KRG, serving as Chairman of the Board. KRG, DLJ and management continued to jointly develop and pursue the company's growth strategy, and worked closely to position the company for a potential exit.

In mid 2005, the Company engaged CSFB to market the company on a confidential basis to potential buyers. This effort culminated in a highly competitive process in which KKR ultimately prevailed as the winning bidder. As part of the transaction, members of Accellent management will partner with KKR and retain an equity stake in the company. Rogers remarked: "The Accellent management team helped KRG create significant value for the KRG led investor group. We wish the Accellent management team all the best as they continue to lead Accellent under KKR's ownership."

The sale to KKR yielded the KRG led investor group, in the aggregate, in excess of three times their original equity investment. It also marks the fifth exit for KRG Capital's Fund I, which was a vintage 1999 fund that invested in seven diverse industry "platform companies" including Accellent.

About KRG Capital Partners

Founded in 1996, KRG is a Denver-based private equity firm that currently has approximately $1.2 billion in assets under management. KRG specializes in acquiring and recapitalizing unique and profitable middle-market companies. The firm seeks investment opportunities for its partners where KRG can 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 add-on acquisitions. Since inception, KRG has invested in 23 platform companies and has completed 62 add-on acquisitions for those platforms. For more information on KRG Capital Partners, please visit www.krgcapital.com.