Morgenthaler Partners Announces Acquisition of Skill Tool & Die

Morgenthaler adds second manufacturer of high precision metal parts to its portfolio within the last three months

CLEVELAND, May 22 -- Morgenthaler Partners announced today the acquisition of Skill Tool & Die Corp., a technologically advanced designer and manufacturer of complex, high precision metal stampings and assemblies for both the automotive and certain non-automotive markets including plumbing fixtures. Skill's customers include the leading manufacturers and/or tier-one suppliers in both industries. In 2002, the company had revenues of $30 million and currently employs 135 people at two facilities in Northeast Ohio.

Skill will be part of a new holding company created by Morgenthaler to manage a group of companies engaged in the manufacture of high precision, complex metal assemblies for automotive and non-automotive markets. As part of this strategic holding company, Skill will join MPI International, the leading maker of fineblanked metal parts, which Morgenthaler acquired in March. (Please refer to: www.morgenthaler.com/morgen_buyouts/mb_whatsnew/MPI-Morgenthaler-PR.pdf ). Morgenthaler intends to add several more complementary metal part manufacturers to the group as part of a buildup strategy.

"The time is ripe for consolidation among the makers of high precision metal parts," states John Lutsi, Morgenthaler general partner. "Automakers and their tier-one suppliers are finding it easier to manage their supply chains by working with just a few leading vendors. At the same time, both Skill and MPI metal stamping and fineblanked product lines complement one another extremely well and offer great opportunities for joint marketing and sales." Lutsi and Fred Festa, a Morgenthaler operating partner, will join Skill's board of directors. The two already sit on MPI's board.

Skill's management will remain in place. "We see this acquisition and our affiliation with MPI as an extraordinary opportunity for growth," says Don Mittelholzer, President and CEO of Skill. "Co-marketing with MPI will give us the size necessary in today's environment to successfully penetrate large customers. It will also provide access to a number of new markets, as well."

"Skill has shown exceptional ability to grow profitably in a difficult competitive period," notes Lutsi. "While the manufacture of high volume metal stampings has migrated to low cost production overseas, Skill has been able to maintain profitable growth by focusing on complex parts-the kind that require Skill's unusual depth of engineering and tooling know-how to make. These guys are problem solvers, and their customers love to work with them."

About Skill Tool & Die

Founded over 35 years ago, Skill Tool & Die Corp. is a manufacturer of high-precision, complex stampings and assemblies for the automotive and plumbing fixture markets. It is headquartered in Cleveland, Ohio, and in 2001 expanded its capacity with a state-of-the-art production facility in Avon, Ohio.

About Morgenthaler

Founded in 1968, Morgenthaler is a leading, national private-equity firm with a middle-market, management buyout group based in Cleveland, Ohio, and a venture-capital group based in Menlo Park, California. The firm has funded more than 180 companies over its 34-year history. With its new fund of $850 million raised in July of 2001, Morgenthaler now has a total of $2 billion under management.

The firm's buyout group focuses on management buyouts and leveraged recapitalizations of stand-alone middle-market companies, as well as, divisions or subsidiaries of larger corporations. Morgenthaler has traditionally been strong in partnering with management teams to build industry-leading companies. For more information regarding the firm, visit www.morgenthaler.com .