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News
New Mountain Partners II L.P. Announces Acquisition of MailSouth, Inc.
March 23, 2005

New York, NY – March 23, 2005 – New Mountain Partners II, L.P. (“New Mountain II”), a leading New York-based private equity fund, today announced the closing of an investment by New Mountain II and affiliated funds to purchase majority control of MailSouth, Inc. (“MailSouth” or the “Company”).

MailSouth, headquartered in Birmingham, Alabama and established in 1988, is the largest independent provider of shared mail marketing programs to rural and suburban markets in the United States. MailSouth delivers monthly shared mail advertising packages to approximately 10 million households in over two hundred predominantly southern and mid-western rural and suburban markets. The Company offers its customers the ability to reach 98% of all households in its markets as well as the ability to target geographic regions ranging from national coverage to a region as narrow as a single postal carrier route.

Bo Howard, MailSouth’s founder, who will continue as a consultant to and investor in MailSouth and as a member of its Board of Directors, stated, “The match between MailSouth and New Mountain really is perfect for us. We found ourselves in the enviable position of being very ‘picky’ as we selected a partner, and we’re thrilled with the common ground of goals, philosophy and style that we have with NMC.”

Tom Settle, President of MailSouth, said, “Our management team enthusiastically welcomes this transaction with New Mountain. New Mountain has a proven ability to identify the highest quality growth companies and to add real, strategic value to these companies. We’ve already become one of the fastest growing companies in the shared mail sector, and we believe we are well-positioned for continued success. The team is eager to work with New Mountain to achieve our full potential as a company.” Members of management of MailSouth have made a significant investment in the Company as part of this transaction.

Steve Klinsky, Founder and Chief Executive Officer of New Mountain Capital, LLC, stated, “New Mountain believes that the shared mail sector is an attractive and economically defensive growth industry, and we believe that MailSouth has the potential to be an extremely valuable participant within it. The Company has grown at approximately a 20% compound rate from 1994 to 2004 and has achieved some of the industry’s highest margins, return on assets and return on investment. We look forward to helping the MailSouth management build the Company to new heights over the years ahead.”

Doug Londal, a Managing Director at New Mountain Capital, has been appointed Chairman of MailSouth. The MailSouth investment will be New Mountain’s sixth investment since its founding in January 2000 and the first investment by New Mountain II, the firm’s recently closed $1.55 billion second fund. New Mountain Capital’s first fund, New Mountain Partners, L.P., has been the highest returning fund among all of the private equity and venture capital firms for the year 2000 as tracked by CalPERS . In keeping with New Mountain’s strategy, the investment was identified as the result of a proactive effort in a carefully selected industry.

A team from Petsky Prunier LLC, led by John Prunier and Sanjay Chadda, served as exclusive financial advisors to MailSouth and initiated, structured and negotiated the transaction on behalf of the Company.


About MailSouth

MailSouth, Inc. (www.mailsouth.com), based in Birmingham, Alabama, is the leading provider of shared mail marketing programs in the rural U.S. The Company delivers monthly shared mail advertising packages to approximately 10 million households in over two hundred markets in the nation.


About New Mountain Capital

New Mountain Capital, LLC (www.newmountaincapital.com) is the manager of two private equity funds, with over $2.3 billion of capital under management. New Mountain’s goal is to be “best in class” in the new generation of private equity as measured by returns, control of risk, service to its limited partners and the quality of the businesses it builds. New Mountain Capital’s second fund, the $1.55 billion New Mountain Partners II, L.P., began its investment period in January 2005.


About Petsky Prunier

Petsky Prunier (www.petskyprunier.com) is an investment bank providing merger and acquisition advisory services to sellers and buyers of direct marketing, marketing services and technology, advertising and promotion and information companies. Petsky Prunier is affiliated with strategic consulting and research firm Winterberry Group (www.winterberrygroup.com), which assists direct marketing and marketing services companies in building value by driving profitability through value driver assessment, opportunity mapping, decision support, partnership development and tactical execution support.