GE Industrial Systems, a division of General Electric Company (NYSE: GE), and Castle Harlan, Inc., the New York merchant bank, announced today they have signed an agreement under which GE will acquire Ion Track, Inc.

Ion Track is a leading provider of advanced trace detection systems for use in aviation security, embassy and high threat facility security, military force protection, and interdiction of illicit drugs at borders, prisons, and within the community. Ion Track is the exclusive producer of systems commercially available today that can simultaneously detect traces of drugs and explosives, providing the broadest available range of contraband substance detection capability.

Ion Track has pioneered the development of advanced detection technologies, from the first handheld explosive detector using gas chromatography (GC) technology to its latest patented innovation, the Ion Trap Mobility Spectrometer® detector. Many illicit drugs and explosives are comprised of substances that are detected by Ion Track's recent, patented technologies. Ion Track's products quickly collect and analyze minute traces of vapor or particles given off by the contraband materials.

"Electronic security is a $20 billion industry with strong growth ahead of it for the future," said Lloyd Trotter, president and CEO, GE Industrial Systems. "Ion Track's leading-edge technology brings GE into a new area of security and is a great complement to our GE Interlogix business."

"Our products and technologies contribute to improved public safety and security and provide advanced solutions to address many of the priority areas of the Homeland Security initiatives," said Anthony Jenkins, president and CEO, Ion Track, Inc. "Ion Track's technology and market leadership fits with GE's strong brand and reputation for trust, growth and innovation. We are looking forward to growing with GE."

"With Ion Track's technology leadership, we can now offer our customers a much broader portfolio of GE security solutions to challenges created by events in a changing world," said Kenneth Boyda, president and CEO, GE Interlogix, Inc.

Ben Sebel, the Castle Harlan vice president who negotiated the transaction, said Ion Track was "an extraordinary company."

"Working with management, we have had great success in growing Ion Track since we acquired the company in early 2000," Sebel said. "We are confident of its continued growth, given GE's strong history of performance."

A majority interest in Ion Track is currently held by a private equity investment fund organized and managed by Castle Harlan. Ion Track's management also holds a substantial stake.

The transaction, which is subject to government approvals and other customary conditions, is expected to close in the fourth quarter of 2002. Ion Track, based in Wilmington, Mass., will become a subsidiary of GE Interlogix, Inc., a part of GE Industrial Systems, based in Plainville, Conn. Terms of the transaction were not disclosed.

NEW YORK, January 25, 2000 -- Castle Harlan, Inc., the New York merchant bank, said today that it has joined with the senior management of Ion Track Instruments (ITI) to purchase the company, the world's leading manufacturer of instruments that detect trace amounts of explosives and narcotics. The terms of the transaction were not disclosed. (Tombstone said $27.6 million)

ITI's products are used in airports, embassies, border crossings, prisons, military bases and other access points and facilities where there is a need for a high degree of security. The company, based in Wilmington, Massachusetts, has a blue-chip roster of customers that includes the U.S. State Department, the Federal Aviation Administration, U.S. Customs, and foreign governments and armed services.

The company's principal products are the ITEMISER Contraband Detector, a desktop device, and the VaporTracer, a hand-held instrument.

"ITI has experienced rapid growth over the past three years," Howard Morgan, a Castle Harlan managing director, said, "in part because of the increasing domestic focus on preventing terrorism as well as halting the flow of drugs at U.S. border crossings. ITI's sales overseas have also been strong and are growing."

Morgan said Castle Harlan was attracted to ITI because of "the strength of its management team and its strong position in a fast-growing global industry.

"We have every expectation that ITI will build on its impressive record of growth," he said, "as governments and militaries throughout the world continue to purchase trace detection equipment to protect airports, embassies, and other sensitive installations from explosives and to prevent the spread of narcotics across national borders."

He added that "Castle Harlan's ownership will give ITI the resources to further expand its business internationally and to aggressively pursue acquisitions."

Tony Jenkins, the President of ITI and one of the leading authorities on vapor detection technology, welcomed the Castle Harlan partnership.

"Castle Harlan's record of support for management and its encouragement of growth," Jenkins said, "will provide extra impetus to help ITI develop new technologies and markets. It will also ensure that we maintain our commanding position in trace detection markets."

The acquisition of a controlling interest in ITI was made by Castle Harlan Partners III, L.P., a $630 million private equity investment fund organized and managed by Castle Harlan, Inc. The seller, which is retaining a minority interest, was Schroder Ventures Limited (UK).

Graham Wrigley, a Schroder Ventures partner, said that, "after supporting the rapid development of ITI over the last four years, we are retaining a significant minority interest going forward to demonstrate our faith in the business and in the benefits of an investment partnership with Castle Harlan, a firm that brings to ITI renewed vigor, relevant industry experience and substantial capital for growth."

Castle Harlan has broad experience in the aviation industry. Worldwide Flight Services, a major provider of ground services for more than 200 airlines at over 60 airports worldwide, is an existing portfolio company. The firm previously owned MAG Aerospace, the world's leading manufacturer of airline sanitation systems and trash compactors, and Smarte Carte Inc., the world's leading operator of airport luggage cart systems.

Since its founding in 1987, Castle Harlan has completed acquisitions exceeding $4.5 billion. Its portfolio companies have included Delaware Management Company, the Philadelphia-based money management firm with more than $32 billion of funds under management; Truck Components, Inc., the largest manufacturer of components for large-truck braking systems; and INDSPEC, a specialty chemical company which is the world's largest producer of resorcinol.

Currently among its portfolio companies are Universal Compression, a leading independent provider of natural gas compression equipment and services; the Verdugt B.V. group, a leading producer and distributor of organic salts; AdobeAir, one of the nation's leading manufacturers of evaporative coolers and portable electric heaters; and Marie Callender's Restaurant and Bakery, a chain of family restaurants best known for its freshly baked pies.

Castle Harlan was founded by John K. Castle, an early pioneer of institutionalized private equity investing and the former president and chief executive officer of Donaldson, Lufkin & Jenrette, the investment bank, and by Leonard M. Harlan, founder and former chairman of the Harlan Company, a diversified real estate and corporate finance advisory firm.