Thermatrix Signs Strategic Partnering Agreement to Raise up to $23 Million

Business Wire, March 30, 1999

SAN JOSE, Calif.--(BUSINESS WIRE)--March 30, 1999--Thermatrix Inc. (NASDAQ:TMXI) announced today that it has entered into a strategic partnering agreement with Newport Capital Partners, LLC for the formulation and implementation of plans for additional strategic acquisitions following the successful integration of Wahlco Environmental Systems Inc. acquired in January 1999.

As its first exclusive assignment on behalf of Thermatrix, Newport Capital Partners intends to carry out and participate in a private equity placement of $6 - $8 million and arrange a $10 - $15 million senior term and revolving credit facility. The financings are expected to be completed in the second quarter of fiscal 1999.

Newport Capital Partners is expected to participate in at least $2 million of the equity offering. The financings are subject to standard due diligence, which is expected to be completed in early April 1999.

Newport Capital Partners is a growth stage merchant bank based in Irvine, Calif., that creates shareholder value for entrepreneurs and investors through the combination of superior financial resources and exceptional advisory services. The firm is committed to partnering with established companies and management teams seeking expansion capital and offers the financial and strategic resources necessary to achieve extraordinary growth.

"With a large pool of committed capital and a diverse investment charter, Newport Capital Partners has the flexibility to approach each financing opportunity with vision and creativity," said John T. Schofield, chairman, president and chief executive officer of Thermatrix. "We believe the experience of Newport Capital Partners will allow us to respond quickly in the ongoing consolidation of the air pollution control industry, producing growth, enhanced profitability and improved shareholder returns."

Thermatrix is a global industrial technology company that provides a range of products for the destruction or treatment of volatile organic compounds and hazardous air pollutants, including its patented flameless thermal oxidation technology to provide the world's leading flameless solution for destroying these pollutants and compounds. Thermatrix is currently focusing its development activities on the application of its FTO technology to treat emissions from diesel engines, both mobile and stationary. With the acquisition of Wahlco Environmental Systems Inc., Thermatrix significantly broadened its line of products and services. Wahlco manufactures and sells a variety of engineered products and related services together with air pollution control systems to electric utilities, independent power producers, co-generation plants and industrial manufacturers worldwide.

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. Actual results could differ materially due to various factors including the size and timing of equity and debt transactions, the ability to attract additional equity investors, the ability to provide sufficient security for credit facilities, and the ultimate outcome of any financing plan as well as risk factors set forth under "Risk Factors" in the company's Annual Report on Form 10-K (Commission File No. 0-20819) and such other risks detailed from time to time in the company's reports filed with the Securities and Exchange Commission. The company undertakes no obligation to publicly release the results of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of anticipated events.

For information about Thermatrix see www.thermatrix.com and for information about Newport Capital Partners see www.newportcap.com.