SOURCE: Penton Partners

October 24, 2007 16:46 ET

Penton Partners Invests 25 Million PLN ($9.5 Million) in Pellet-Art -- a Leading Pellet Producer in Poland

WARSAW, POLAND--(Marketwire - October 24, 2007) - Penton Partners invested 25 million PLN (9.5 million USD) in Pellet-Art (www.pellet-art.pl) -- one of the largest pellet producers in Poland.

Pellet-Art Sp. z o.o. was established in April 2004. Production started in August 2005 and by June 2006 the company reached full capacity. In the first half of 2008 a new production plant will be built in southwestern Poland, which will enable the company to double its production capacity.

Wood pellets are a highly efficient, environmentally friendly, renewable source of fuel. Since pellets are produced from forest and furniture industry wood waste, sawdust, wood chips and other wood by-products, not a single tree is cut down for its production. Moreover, the pellets are carbon neutral. Carbon dioxide emissions from pellet combustion are equivalent to the same amount of carbon dioxide that has been used in growing the wood. Wood pellets burn at a very high temperature. As a result, a 40-pound bag of pellets produces only three ounces of ash. The cost of one kilowatt of heating energy when using wood pellets is about 35% lower than that of heating oil. Because of this, the utilization of pellets is increasing globally. It is estimated that over the next five years the consumption in Europe will triple.

Pellet-Art currently employs 70 people and plans to hire an additional 15 people when the new production plant is operational. In 2006, Pellet-Art's revenues were 7 million USD and EBITDA was 1.2 million USD. Penton Partners' equity contribution will allow the company to complete its investment program, including building a new production plant and upgrading its machinery park.

"The previous organic growth of Pellet-Art allowed the company to achieve a high market position among pellet suppliers on the European market. With Penton Partners, we will be able to continue improving the quality of our product, successively increasing production capacity, to become a leader in the renewable energy industry in the short term," said Eugeniusz Gosiewski, President of Pellet-Art.

"We made our decision to invest in the Company, guided by analysis of trends on the European fuel and energy market. We believe that as a result of increasing fossil fuel prices, the demand for renewable energy in Europe will substantially increase by 2010. On this basis, we believe that the Company's growth potential is tremendous," said Bartosz Janikowski, partner in Penton Partners.

About Penton Partners:

Penton Partners manages three private equity funds: Poland Recovery Management Fund, Penton Central and Eastern European Opportunity Fund, and Penton Central European Selected Opportunities Fund. Penton Partners invests in small and medium size enterprises in Poland and other countries of Central and Eastern Europe. Penton targets companies with high growth potential, good management and clear strategies for future development and expansion.

For more information about Penton Partners please visit: www.pentonpartners.com

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