NEW YORK, October 21, 2004 - Castle Harlan, Inc., the New York-based private-equity investment firm, announced today that a group of investors, including its Australian affiliate, CHAMP (Castle Harlan Australian Mezzanine Partners), has sold New Price Retail, a leading pharmaceutical, health and beauty-aid retailer, to Australian Pharmaceutical Industries Ltd. (API) in a transaction valued at approximately A$167 million.

The consortium had acquired New Price Retail in a management buyout last February for A$107 million. Besides CHAMP, the other investors were ABN AMRO Capital, Investec Wentworth Private Equity and management

The investor group also announced that Jeff Sher, New Price's chief executive officer, will step in as chief executive of API, a position that has been vacant since the resignation of David Young last December. API is a drug and medical products manufacturer and distributor listed on the Australian Stock Exchange with the ticker symbol API.

Castle Harlan said that the sale of New Price resulted in CHAMP's offshore group of investors realizing a return of US$13.5 million on its investment of US$8.3 million, or 1.6 times its original investment in less than a year.

New Price has more than 300 stores in Australia, approximately 140 of which are company-owned. For the most recent 12-month period, it had revenues of A$371.8 million, up 17.7 percent from the corresponding period a year earlier.

Castle Harlan, founded in 1987, is a leading New York private-equity investment firm, investing primarily in controlling interests in the buyout and development of middle-market companies in North America and Europe. In 2000, it 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 currently manages or advises approximately A$850 million in funds for private-equity investment in the Australasian region, including the CHAMP I funds, with A$500 million in committed capital. The CHAMP I funds were raised in 2000 and are now approximately 60 percent invested.

Earlier this year, CHAMP sold Penrice, the largest producer of soda ash in Australia, and realized a return of three times its original investment.

In August, CHAMP successfully conducted an initial public offering of another of its portfolio companies, Bradken, Ltd., a manufacturer of mining and rail products. The offering, 102.08 million shares at A$2.40 per share on the Australian Stock Exchange (symbol: BKN), raised A$245 million. The shares closed today at A$3.10.

CHAMP's other portfolio companies include Austar United Communications Limited, Australia's second largest pay-TV company, with more than 427,000 subscribers, and Australian Pacific Paper Products, Australia's second largest manufacturer and distributor of disposable diapers and adult incontinence products.