New York, June 20, 2005 - Castle Harlan, Inc., the New York private equity investment firm, announced today that its Australian affiliate, CHAMP, has sold Australian Pacific Paper Products (APPP), Australia's second largest manufacturer of disposable diapers. The transaction was valued at A$75 million.

CHAMP (Castle Harlan Australian Mezzanine Partners) had acquired APPP in December 2002 for $53 million and recouped 80 percent of its original investment in a recapitalization in May 2004. CHAMP's gain from the sale and recapitalization totaled approximately A$52 million and represented a return of 2.6 times CHAMP's investment and an internal rate of return of 56 percent.

The buyer was Gresham Private Equity, another Australian private equity firm.

In addition to manufacturing and distributing disposable diapers, APPP is a leading distributor of adult incontinence products. It serves both Australian and New Zealand markets. The company, based in Melbourne, had revenues in 2004 of A$104 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of A$13 million. Its EBITDA was approximately $9.6 million when CHAMP acquired the company.

Castle Harlan, founded in 1987, is a leading New York private-equity investment firm, investing in controlling interests in the buyout and development of middle-market companies in North America and Europe. The firm traces its roots to the start of the institutionalized private-equity business in the late 1960s.

Castle Harlan's portfolio companies, which employ more than 26,000 people, include Ames True Temper, a leading manufacturer of lawn and garden tools and accessories; Horizon Lines, one of the largest U.S. container shipping companies, and Caribbean Restaurants, the most successful quick-service restaurant franchise in Puerto Rico with 165 Burger King units.

In 2000, Castle Harlan was a co-founder of CHAMP, which is the successor to one of Australia's oldest and largest private-equity investment firms dating back to 1987. CHAMP, based in Sydney, currently manages approximately A$850 million in funds for private-equity investment in the Australasian region.

Its portfolio companies include Austar United Communications Limited, Australia's second largest pay-TV company, with approximately 510,000 subscribers.