The Carlyle Group to Purchase Oriental Trading Company from Brentwood Associates; Largest Direct Marketer of Party Supplies in U.S.

Washington, DC – Global private equity firm The Carlyle Group today announced that it has signed a definitive agreement to purchase Oriental Trading Company (OTC), an Omaha, NE-based direct marketer of party and school supplies, from private equity firm Brentwood Associates. Brentwood originally purchased the company in 2000 and will maintain a significant minority stake in the company. The transaction, terms of which have not been released, is expected to close in the third quarter of 2006.

Founded in 1932, OTC is the nation’s largest direct marketer of party supplies, novelties, toys, children’s arts and crafts, school supplies, home décor and giftware, and one of the largest catalog and internet retail operations in the U.S. OTC has more than 18 million customers on file, mails 300 million catalogs annually, operates three internet websites and offers more than 25,000 product SKUs. In recent years, OTC has significantly grown its e-commerce business, with internet sales currently accounting for nearly half of total revenues. The Company enjoys strong brand loyalty based on more than 70 years in the business and a reputation for a huge selection of value-priced products for all occasions. OTC sources the vast majority of its merchandise from outside the U.S., primarily from China, through longstanding vendor and direct sourcing relationships.

Sandra J. Horbach, Carlyle Managing Director and Head of the Consumer & Retail team, said, "Oriental Trading is an outstanding business with excellent growth prospects. The company has all the attributes we like in a consumer investment: leading market position, exceptional brand loyalty, extensive proprietary customer base, consistent growth and strong free cash flow. Carlyle’s global network, especially in China, will enable us to add value through enhancing vendor relationships and direct sourcing capabilities. We are excited about this opportunity and look forward to working with Steve Frary and his accomplished management team."

Steve Frary, Chief Executive Officer of Oriental Trading Company, said, "This news could not be more positive for OTC. Carlyle’s enthusiasm for our company, its global network and exceptional consumer experience will provide the best possible support to continue to expand our business and achieve our growth plans. Also, Brentwood has been a superb partner during the past six years, and we are very pleased to be able to continue to work with them."

Bill Barnum, co-founder of Brentwood Associates’ private equity effort, commented, "Since our investment in 2000, OTC has developed from a family-owned catalog operation into one of the leading direct marketing businesses in the U.S. OTC has been one of Brentwood’s most successful investments. We continue to have significant confidence in Steve Frary, the team he has built and the company’s superior business model and look forward to the company’s continued growth with Carlyle as the majority investor."

Carlyle was advised by Wachovia with legal advice from Debevoise & Plimpton. JP Morgan conducted the sales process on behalf of Oriental Trading Company and Brentwood with legal advice from Latham & Watkins.

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Oriental Trading Company

Headquartered in Omaha, Nebraska, Oriental Trading Company is one of the nation’s leading direct marketers of novelties, toys, party supplies and home décor. The Company markets a broad selection of merchandise comprising more than 25,000 SKUs to individual consumers, teachers, schools, churches and businesses primarily through various catalog titles, three websites and a direct sales force. The privately held company has approximately 3,000 employees throughout its facilities in Omaha, Fremont and Underwood, Iowa.

Brentwood Associates

Brentwood Associates is a private equity investment firm with over $750 million of capital under management and a 30 year history of investing in leading middle-market growth companies. With significant experience in both investing and operations, Brentwood is a value-added partner with entrepreneurs and executives building world-class companies.

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Contacts:

Oriental Trading Company
Denise Hallquist
(402) 596-2401

Brentwood Associates
William M. Barnum, Jr.
(310) 477-6611

The Carlyle Group
Chris Ullman
(202) 729-5399

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