Jernberg Holdings, Inc. Recapitalized

$20 Million dividend distributed to stockholders

KPS Special Situations Funds (KPS) has announced that Jernberg Holdings, Inc., a subsidiary of its portfolio company Hephaestus Holdings, Inc. (HHI), has completed a $57 million recapitalization. The proceeds of the recapitalization were used to refinance Jernberg's debt and fund a $20.0 million dividend distribution to HHI's stockholders.

KPS and management continue to own 100% of HHI's common stock following the recapitalization.

On July 13, 2006, HHI completed the acquisition of the business and assets of Impact Forge, Impact Forge, Inc. Impact Precision Forge, Inc., Omni Forge, Inc. and related entities. As a result of this transaction, officials claim that HHI is now the largest independent manufacturer of highly engineered forgings for the North American automotive industry.

George Thanopoulos, CEO of HHI and Jernberg, said, "This recapitalization is validation that Jernberg has successfully completed its turnaround and has a great future. We are pleased that as a result of the recapitalization, we were able to distribute a significant amount of cash to our stockholders, particularly KPS, who has provided critical support to our business. We thank our customers, suppliers and employees for their contribution to Jernberg's success and look forward to working together to build on our achievements."

KPS formed HHI and its Jernberg subsidiary in September 2005 to purchase substantially all of the assets of Jernberg Industries, Inc., Iron Mountain Industries, LLC and related entities pursuant to a 363 sale of assets under Chapter 11 of the bankruptcy code. KPS invested $23 million of equity to capitalize the new company and retained Thanopoulos as the Company's new CEO.

Financing for the transaction was provided by LaSalle Business Credit, NA and LBC Credit Partners.

Jernberg Holdings, Inc. (www.jernberg.com ), manufacturers highly engineered symmetrical forged parts for various power-train and wheel-end applications. Impact Forge Holdings, Inc. (www.impactforge.com ) manufactures highly engineered symmetrical and asymmetrical forged parts for transmission, power-train and wheel-end applications. Employing over 1,200 employees, HHI operates eight manufacturing facilities located in the Chicago, Illinois, Indianapolis, Indiana and Coldwater, Michigan vicinities. The KPS investment strategy and portfolio companies are described in detail at the firm's website: www.kpsfund.com .

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