CASTANEA PARTNERS ANNOUNCES INVESTMENT IN HANNA ANDERSSON

Makes Strategic Investment in Leading Children’s Apparel Brand

Newton, MA – December 16, 2004 - Castanea Partners announced today that they have teamed with Dorset Capital to recapitalize Hanna Andersson, a leading multi-channel children’s apparel and accessories brand.

Founded in 1983 and headquartered in Portland, Oregon, the company designs, sources and markets its clothing under the Hanna Andersson brand name (www.hannaandersson.com). Hanna Andersson generates exceptional customer loyalty through its commitment to high quality, functionality, durability, and colorful design. In addition to its core catalog and web site, Hanna operates fifteen retail stores.

In 2001, Hanna Andersson was purchased by private equity firms Weston Presidio and Dorset Capital. In today’s transaction Castanea and Dorset partnered to acquire Weston Presidio’s stake in the company with plans to further build the Hanna Andersson’s distinctive brand.

“Dorset Capital has been a great partner and we are very pleased to have Castanea as a new investor. The Castanea team has tremendous operating experience in consumer products, direct marketing and specialty retail,” said Phil Iosca, President and CEO of Hanna Andersson. “They will be value-added partners and contributors to the next stage of our success.”

“Hanna is an exciting opportunity that fits our investment strategy,” said Robert Smith, Managing Partner of Castanea. “The management has built a strong brand with exceptional customer loyalty. The company is at a stage in its development where our experience and capabilities will add value as Hanna pursues its growth potential.”

Brian Knez, Managing Partner of Castanea notes, “We look forward to partnering with Hanna Andersson and Dorset Capital. We share a vision of opportunities to create value through enhancing and expanding the Hanna franchise.”

About Castanea Partners
Founded in 2001, Castanea Partners is a private equity firm that invests in small to middle market companies in Publishing and Information Content, Consumer Products and Specialty Retail, and Human Resource and Business Services. Castanea combines extensive operating and private equity experience and partners with management to help them achieve superior business results.

Castanea is currently investing from its second fund, Castanea Partners Fund II, a $207 million fund that targets $10 million to $20 million equity investments in traditional management buyouts, sales of private companies, industry consolidation opportunities, and growth equity. The firm focuses on companies at a development stage where Castanea’s unique capabilities can lead to significant growth or performance improvement.

For more information about Castanea Partners, please visit www.castaneapartners.com.

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