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June 24, 1997 - Castle Harlan Partners III Acquires Charlie Brown's Restaurants

NEW YORK, June 24 -- Castle Harlan, Inc., the New York merchant bank, announced today that Castle Harlan Partners III has acquired Charlie Brown's, Inc., a restaurant company that operates in New Jersey and suburban New York, for $50.4 million from Restaurant Associates Corp.


Senior management of Charlie Brown's also participated in the acquisition.


Charlie Brown's, based in Mountainside, New Jersey, owns and operates 24 Charlie Brown's Steakhouses and six restaurants called The Office Beer Bar & Grill. Most of the restaurants are in northern New Jersey; two are in Westchester County, New York.


Charlie Brown's is the first acquisition by Castle Harlan Partners III, an investment partnership managed by Castle Harlan. The partnership closed in February with capital commitments of $630 million from public and private pension funds, private foundations, college endowments and affluent individuals.


"Charlie Brown's is strongly positioned as a moderately priced, neighborhood steakhouse with a loyal customer base and an outstanding record of comparable store sales growth," said David B. Pittaway, Castle Harlan managing director. "Family steakhouses, such as Charlie Brown's, represent one of the fastest-growing segments in the restaurant industry today.


"The Office also has shown very healthy growth in comparable store sales, and we see promising opportunities for expansion of these two successful concepts."


Pittaway noted that Charlie Brown's president, Russell D'Anton, and John Augustine, senior vice president for operations, have worked together for 20 years.


"They will continue in those positions and will be our partners in the ownership of the company," he said. "The management team has significant strength, depth and stability at all key levels."


Early targets for expansion, Pittaway said, will be Long Island, southern Connecticut and eastern Pennsylvania, as well as additional outlets in New Jersey.


Castle Harlan was founded in 1987 by John K. Castle, former president and chief executive officer of Donaldson, Lufkin & Jenrette, the investment banking firm, and Leonard M. Harlan, founder and former chairman of The Harlan Company, a real estate investment banking and financial advisory firm.


In recent years, Castle Harlan partnerships have had several major investments in restaurant chains, including Morton's of Chicago steakhouses and McCormick & Schmick's, operator of 16 upscale seafood restaurants, primarily in the western United States.


Among Castle Harlan's most recent acquisitions have been Statia Terminals Group, N.V., one of the world's largest independent marine terminal companies; Commemorative Brands, Inc., the second largest U.S. manufacturer of class rings, and U.S. Synthetic Corporation, the leading manufacturer of synthetic diamond drill bits for the oil and gas industry.


Other portfolio companies have included Delaware Management Company, a major international money management firm with assets under management of more than $35 billion; Ethan Allen Interiors, the widely known furniture company; Smarte Carte, the world's largest airport baggage cart company, and MAG Aerospace Industries, the world's leading manufacturer of aircraft sanitation systems.