RSTW Partners announces exit of Home Care Supply investment with 17.30% IRR

RSTW Partners exited its investment in Home Care Supply on June 14, 2004, generating a 17.30% IRR. Home Care Supply (“HCS”), is a leading provider of home medical equipment.  Formed in 1998, HCS has grown into a diversified health care provider of respiratory, durable medical equipment, infusion, and mobility products. HCS currently operates 48 locations from New York to Texas.    RSTW originally invested $25,000,000 of subordinated debt and $4,000,000 of preferred stock in HCS in April 2001.  Since inception, this investment generated total cash of $44.68 million to RSTW Partners or 1.54 times the original investment.  This investment was in held in RSTW Partners III, L.P. a $500,000,000 investment fund.

Praxair Healthcare Services, Inc., a wholly owned subsidiary of Praxair, Inc. (NYSE: PX), has entered into a definitive agreement to acquire Home Care Supply, Inc. from an investor group led by Harvest Partners Inc., a New York-based multinational private equity firm. Headquartered in Beaumont, Texas, Home Care Supply is the largest privately held home respiratory and medical equipment provider in the United States, with 59 locations in 13 states.

Under the terms of the agreement, Praxair Healthcare Services will pay $245 million for the company. The board of directors for each company has approved the definitive agreement and the transaction is expected to close this month.

During the 2003 fiscal year, Home Care Supply generated revenues of $169 million. Praxair Healthcare Services and Home Care Supply will combine their operations, creating a $525 million healthcare business for Praxair in North America and expanding worldwide healthcare sales to over $750 million.

"The acquisition of Home Care Supply is a good organizational fit with Praxair and gives us service capabilities in 27 states," said George Ristevski, president, Praxair Healthcare Services. "It also increases the density of our Northeast operations and significantly expands our presence from the mid-Atlantic to Texas. Our combined industry expertise and geographic reach will provide an excellent platform for sustained growth and will further accelerate our hospital to home strategy."

Home Care Supply's current management team is expected to continue with Praxair. Todd Christopher, Home Care Supply's president and CEO, is scheduled to become vice president, U.S. Homecare, the chief operating role for Praxair's U.S. homecare business.

"We are proud of what Home Care Supply has created over the last six years," Christopher said. "Our shared views with Praxair about superior patient care and employee excellence will provide a strong foundation for future business development."

Harvest Partners, founded in 1981, is a leading New York-based private equity investment firm, pursuing buyouts and growth financings of profitable, medium-sized businesses. Focused on specialty services, value-added distribution, consumer and manufacturing businesses, Harvest has over 20 years of experience investing in domestic as well as multinational companies. More information on Harvest Partners is available on the Internet at www.harvpart.com.