The Carlyle Group Signs Agreement to Transfer Rhythm Shares to THK

Tokyo, Japan - Global private equity firm The Carlyle Group (Carlyle) today announced that THK CO., LTD. (THK) will purchase 100% of the outstanding shares in Rhythm Corporation (Rhythm) held by Carlyle and other shareholders. Under the agreement, THK endeavors to maintain the current management, employees, Rhythm's independent operation and brand. The transaction is expected to close at the end of May 2007.

Carlyle and company management acquired Rhythm through a management buyout (MBO) in December 2004. Since the acquisition, Carlyle has supported Rhythm's efforts to become the world's leading joint parts manufacturer through a series of initiatives including strengthening its business platform, expanding client base, and entering the Chinese and other overseas markets.

Rhythm develops, designs, manufacturers and distributes automobile parts for use in key safety devices from steering mechanisms, suspension and brakes to transmissions. To stay ahead of the rapid globalization of original equipment manufacturing (OEM) businesses and the trend of increasing module supply, Rhythm plans to continue its aggressive expansion strategy. The share transfer to THK is an important step towards Rhythm's strategic growth initiatives.

THK develops and manufactures liner motion (LM) guides used in advanced mechatronics devices and has strong global sales capabilities. THK will share its global resources with Rhythm for the mutual benefits of both companies. In particular, the two firms intend to combine Rhythm's cold forging and metal molding technologies with THK's metal casting and plastic extrusion technologies to develop new, competitive products. The collaborative initiatives, including technology and innovation development, will increase their management efficiency and broaden product lines, thus expanding business domain and generating higher value for both.

Tamotsu Adachi, Managing Director and Head of Carlyle's Japan Buyout Group, said, "Carlyle took a long-term, strategic view to develop Rhythm into the world's leading manufacturer of joint parts. Working with the management in the last few years, we supported various initiatives that helped accelerate Rhythm's global expansion, explore business alliances and acquisitions, improve cash flow and cost structure, strengthen the management team and better incentivize employees by offering stock options.

"Faced with slowing domestic growth and weak performance of the Big Three U.S. automakers, Rhythm needs even more aggressive plans to forge through these business challenges. The strategic transfer will help sharpen Rhythm's competitive advantage. Rhythm's management is fully supportive of this transaction and welcomes the opportunity to realize a broad range of synergies between the two firms. THK values Rhythm's independence and strong management team; and we are confident the two companies will move into a new exciting growth phase as a result."

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About THK
THK Co, Ltd was established in April 1971. It manufactures and distributes linear motion systems used in advanced mechatronics devices. Headquartered in Tokyo, Japan, it has more than 5,000 employees and has manufacturing plants in various locations in Japan. It also has subsidiaries in China, Taiwan and Europe. It is listed on Tokyo Stock Exchange 1st Section. For more information, please visit www.thk.com.

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