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Arlington Capital Partners Announces Sale of Signaltree Solutions to Keane, Inc.

WASHINGTON, DC, MARCH 21, 2002 — Arlington Capital Partners is pleased to announce that one of its portfolio companies, SignalTree Solutions, has been acquired by Keane, Inc. (AMEX: KEA), a publicly-traded business and information technology (IT) consulting firm. Under the terms of the transaction, Keane paid $62 million in cash for all of SignalTree’s outstanding stock.

Arlington Capital acquired SignalTree in partnership with senior management in March 2001. Despite the economic slowdown, SignalTree was able to grow its operating profit by nearly 100% year-over-year – a credit to SignalTree’s seasoned management team led by Russ Cappellino.

Mr. Cappellino, Chairman and CEO of SignalTree, stated, “The marriage of Keane and SignalTree should benefit the customer bases of each of our organizations. SignalTree adds an offshore component to enhance Keane’s delivery capabilities, reduce delivery costs and extend penetration with existing customers. SignalTree’s long-standing customers now have the breadth and depth of services that a billion dollar organization can provide.”

Arlington Capital invested in the offshore services industry, recognizing the importance of serving domestic clients through an offshore delivery model, especially in a difficult economic environment. Keane’s interest in SignalTree mirrors Arlington Capital’s original investment thesis. SignalTree provides Keane with (i) offshore delivery capability with a 20-year history of migrating work between the US and India, (ii) a strong US-based management team to assist in integration, and (iii) strong customer relationships backed by multi-year contracts.

Mr. Cappellino added, “We formed a true partnership with Arlington. They provided us with more than just capital. They offered senior level contacts and introductions to expand our customer base, strategic direction at the Board level and were extremely helpful in our eventual sale. SignalTree has been a great success for our customers, employees and shareholders – a success we look forward to repeating for Keane.”

“We are pleased with the outcome of the SignalTree transaction,” said Jeffrey Freed, a Managing Director at Arlington Capital. “This transaction validates Arlington’s strategy of identifying industries poised for growth and partnering with quality management teams.”
Arlington Capital earned greater than three times its invested capital in this transaction in just over one year, representing a 180% internal rate of return.

About Arlington Capital Partners:

Arlington Capital Partners is a Washington, DC-based private equity fund with over $450 million of committed capital focused on middle market buyout investment opportunities in growth industries including the business services and outsourcing, aerospace/defense, IT and engineering services, media, education and training, healthcare services, and specialized manufacturing and related industries. The firm’s professionals have a unique combination of operating and private equity experience that enables Arlington to be a value-added investor. Arlington invests in companies in partnership with high quality management teams that are motivated to establish and/or advance their company‚s position as leading competitors in their field.

SOURCE: Arlington Capital Partners