Texas Pacific Group and Warburg Pincus Complete Acquisition of The Neiman Marcus Group, Inc

Business Wire, Oct 6, 2005

DALLAS -- The Neiman Marcus Group, Inc. (NYSE:NMG.A)(NYSE:NMG.B) announced today the completion of the acquisition of Neiman Marcus by an investor group led by Texas Pacific Group and Warburg Pincus LLC.

On May 1, 2005, affiliates of Texas Pacific Group and Warburg Pincus entered into a merger agreement with Neiman Marcus to acquire the Company for a purchase price of approximately $5.1 billion in cash to shareholders plus assumed net indebtedness. Under the terms of the merger agreement, Neiman Marcus stockholders are entitled to receive $100 per share in cash, without interest.

"We're delighted to be investing with the Neiman Marcus management team. Their success and leadership in the luxury retail sector is unmatched," said Jonathan Coslet, a Partner at Texas Pacific Group. "Under their direction and through the efforts of more than 15,000 associates, Neiman Marcus continually offers an unparalleled shopping experience."

Kewsong Lee, a Warburg Pincus Managing Director and leader of the firm's global LBO group, said: "Burt Tansky and the management team have done a phenomenal job in keeping Neiman Marcus focused on its core strengths. The company has enjoyed record operating and financial performance and we look forward to working with Burt and his team to continue building upon this track record of success."

Commenting on the closing, Neiman Marcus Group President and Chief Executive Officer Burton M. Tansky said: "We are pleased with the successful outcome of this transaction and look forward to partnering with Texas Pacific Group and Warburg Pincus. Our new partners share our vision of serving the luxury consumer with distinctive merchandise and outstanding customer service, continuing the nearly 100-year tradition of Neiman Marcus."

The investor group financed the transaction with equity contributions from funds affiliated with Texas Pacific Group and Warburg Pincus, certain co-investors and certain members of management and cash on hand at Neiman Marcus, along with a new $1,975 million senior secured term loan facility, a new senior secured asset-based revolving credit facility providing financing of up to $600 million, of which $150 million was drawn at the closing, and the private placement of $700 million aggregate principal amount of senior notes due 2015 and $500 million aggregate principal amount of senior subordinated notes due 2015. As separately announced, in connection with the closing of the merger, Neiman Marcus called for the redemption of all of its 6.65% senior notes due 2008.

Neiman Marcus stock will cease trading on the New York Stock Exchange at market close today, and will be delisted. As soon as practicable, a paying agent appointed by Neiman Marcus will send information to all Neiman Marcus stockholders of record, explaining how they can surrender Neiman Marcus stock in exchange for $100 per share in cash, without interest. Stockholders of record should await this information before surrendering their shares. Stockholders who hold shares through a bank or broker will not have to take any action to have their shares converted into cash, since these conversions will be handled by the bank or broker.

About Texas Pacific Group

Texas Pacific Group, founded in 1993 and based in Fort Worth, San Francisco, and London, is a private equity firm that has raised approximately $15 billion in equity capital. Texas Pacific Group seeks to invest in world-class franchises across a range of industries, including significant investments in luxury and other retail businesses, technology, consumer products, airlines and healthcare. Significant investments include investments in leading retailers (J. Crew, Debenhams (UK), Petco), technology companies (Sungard Data Systems, MEMC Electronic Materials, ON Semiconductor, Paradyne Networks and Seagate Technology), branded consumer franchises (Burger King, Del Monte, Ducati Motorcycles, Metro-Goldwyn-Mayer), airlines (Continental, America West), healthcare companies (Oxford Health Plans, Quintiles Transnational), energy and power generation companies (Denbury Resources and Texas Genco) and others (Punch Taverns (UK)).

About Warburg Pincus

Warburg Pincus has been a leading private equity investor since 1971. Throughout its 35-year history in private equity, Warburg Pincus has invested at all stages of a company's life-cycle, from founding start-ups to providing growth capital to leading recapitalizations, leveraged buy-outs and special situations. The firm currently has approximately $12.5 billion under management and an additional $8 billion available for investments in a range of sectors, including consumer products and industrial, financial services, information and communication technology, media and business services, healthcare, energy and real estate. Warburg Pincus invests globally from offices in New York, Menlo Park, London, Frankfurt, Hong Kong, Tokyo, Seoul, Beijing, Shanghai and Mumbai. The firm has an active portfolio of more than 100 companies. Warburg Pincus has invested approximately $3.5 billion in more than 35 late-stage, leveraged transactions and special situations, including Jarden (NYSE:JAH), Knoll (NYSE:KNL), Polypore International, Telcordia Technologies, Transdigm and UGS. For more information, visit www.warburgpincus.com.