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January 07, 2013 - Castle Harlan Completes Sale of IDQ, Leading Manufacturer of Do-It-Yourself Automotive Aftermarket Air Conditioning Recharge Products

Castle Harlan, Inc., the New York private equity firm, announced today that Castle Harlan Partners V, L.P. (CHPV) has completed the sale of IDQ Acquisition Corp., the leading manufacturer of do-it-yourself automotive aftermarket air conditioning recharge products, to Kinderhook Industries, another private equity firm. The transaction price was not disclosed. The sale resulted in a 3.3X gross multiple on Castle Harlan’s original investment.

“Castle Harlan specializes in partnering with management teams to help them accelerate the growth of their businesses by adding capital and strategic guidance,” said Marcel Fournier, senior managing director of Castle Harlan. “Throughout our investment in IDQ, we helped the company through a number of important strategic and operational initiatives, including building consumer awareness of the category, launching a new product line and expanding the company internationally.”

“As a result, the company is well positioned to continue its ongoing and anticipated growth, and we were able to reward our investors with a very satisfactory return,” Fournier added.

IDQ products, such as air conditioning recharge and retrofit kits, premium refrigerant blends, specialty chemicals, straight refrigerants, and a wide range of complementary DIY and professional-use items, include brand names such as A/C PRO, Arctic Freeze®, Sub Zero® and Super Seal Stop Leak. These products are sold through approximately 25,000 retail stores, including leading national chains, such as AutoZone, Advance Auto Parts, Wal-Mart, O’Reilly, NAPA, Pep Boys, and others. IDQ also sells a full range of commercial air conditioning products designed for automotive repair shops.

Castle Harlan supported IDQ’s programs to build consumer awareness of the category, increase penetration of do-it-yourself in the air conditioning market, and convert consumers from commodity products to higher value-added offerings. Under Castle Harlan’s ownership, IDQ developed, tested and launched the A/C PRO product line and rolled out an extensive advertising and awareness campaign that included nationwide television and radio ads, various social media elements and interactive merchandising displays. These efforts were well received by customers and consumers, and the A/C PRO product line is emerging as a leading brand in the category.

“The Castle Harlan team worked closely with CEO Michael Klein, CFO Gerry Rooney and the entire management team,” said Heather L. Faust, vice president of Castle Harlan and a member of the IDQ Board of Directors during Castle Harlan’s ownership. “We know these executives well and have great confidence that under their leadership the company will continue to grow.”

Castle Harlan, founded in 1987, invests in controlling interests in the buyout and development of middle-market companies in North America and Europe. Its team of 19 investment professionals has completed 53 acquisitions since its inception with a total transaction value in excess of $11 billion. Castle Harlan has managed investment funds with equity commitments of approximately $3.5 billion. The firm traces its roots to the start of the institutionalized private-equity business in the late 1960s.

Castle Harlan's current portfolio of companies includes Shelf Drilling Holdings Ltd, a leading provider of shallow-water drilling services in Asia, Africa and the Middle East; Pretium Packaging LLC, one of the country’s leading manufacturers of custom-designed specialty plastic containers for the food, pharmaceutical, personal-care and household markets; Baker & Taylor, the world’s largest distributor of books and entertainment products to libraries and retailers; and Securus Technologies, a leading provider of secure inmate telecommunications for the corrections industry.

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