TH Lee Putnam Ventures, Freeman Spogli, and N.E.W. Management Invest In N.E.W. Customer Service Companies, Inc.

New York, August 18, 2004 - TH Lee Putnam Ventures and Freeman Spogli today announced that they, along with current management of N.E.W. Customer Service Companies, Inc. (NEW), have acquired a significant equity interest in NEW, the leading independent administrator of warranty and extended service contracts for retailers, utilities, manufacturers, and financial services firms in the United States, at an enterprise value of approximately $370 Million. CIBC provided debt financing for this transaction and acted as advisor to the company.

NEW creates and administers warranty and extended service programs that cover a wide range of consumer electronics, home office equipment, appliances, sporting goods, lawn and garden equipment, furniture, power tools, and jewelry products. Clients such as Best Buy, Lowe’s, OfficeMax, Sam’s Club, Kmart, and JC Penney offer these service programs to their customers to improve their customer relationships and extend the life of the products they offer. NEW also delivers innovative service programs for DIRECTV, Florida Power and Light, VISA U.S.A.’s credit card enhancement programs, and certain goods sold on eBay, Amazon.com, and The Home Shopping Network.

The company was founded in 1983 by CEO and Chairman Fred Schaufeld, and is headquartered in Sterling, Virginia. The company currently administers over 60 million customer contracts and utilizes an actuarial database that analyzes over 10 million product failures. In addition, the company has established a nationwide repair network of over 25,000 independent service providers. The company has more than 2,000 employees, and has grown consistently and profitably.

Mr. Schaufeld said, “We are excited about working with TH Lee Putnam Ventures and Freeman Spogli to grow NEW's franchise and capitalize on new opportunities in the warranty and extended services market. We believe that our partners bring significant knowledge about retailing and our business sector, which can help us develop effective long-term growth strategies. We look forward to working closely with them and leveraging their resources.”

Renny Smith, Managing Director with TH Lee Putnam Ventures, said, "NEW has established itself as the leading provider of warranty and extended service contracts due to its singular focus on this market and its extraordinary dedication to customer service. NEW's strengths in service innovation, analytics, and relationships with leading insurers make it an ideal fit with our focus on tech-enabled business services and leverages our firm's expertise in outsourcing, retail analytics, and financial services.”

John Roth, Partner of Freeman Spogli, said, “Fred and his team have been pioneers in the industry with an impressive record of innovation. We believe extended warranty services are going to be an increasingly important profit driver for retailers, manufacturers, and consumer services companies. NEW is a good fit with Freeman Spogli’s long history of investing in successful retailing and retailing-related businesses.”

About NEW N.E.W. Customer Service Companies, Inc. (www.newcorp.com) is the nation's leading provider of extended service plans, buyer protection services and product support for businesses and consumers. For the twelve months ended June 30, 2004, NEW’s clients generated over $1.4 billion in retail sales from the company’s warranty and extended service programs. With more than 20 years experience, NEW provides exceptional post-sale consumer care for many of the nation's largest retailers, manufacturers, utilities and financial services firms. NEW’s commitment to customer care and innovation allows it to continually deliver ongoing revenue, unrivaled customer support, seamless service administration and the competitive edge needed to succeed in a rapidly changing marketplace. This philosophy has positioned the company as the leader in the marketing and administration of extended service plans and other value-added buyer protection and information services.

About TH Lee Putnam Ventures TH Lee Putnam Ventures (www.thlpv.com) is a private equity firm affiliated with Thomas H. Lee Partners, a leading buyout firm, and Putnam Investments, a leading global money management firm. TH Lee Putnam Ventures’ primary focus is growth capital investments in business services, financial services, and business process outsourcing companies whose success depends on the deployment and use of information technology. It has investments in several companies that provide outsourced business solutions to retailers and manufacturers including Parago (outsourced rebate processing), ClickTactics (outsourced direct marketing), and 4R Systems (retail analytics). The firm manages $1.1 billion in capital commitments and has offices in New York, Boston and London.

About Freeman Spogli & Co. Freeman Spogli & Co. (www.freemanspogli.com) is a private equity firm dedicated exclusively to investing and partnering with management in companies in the retailing, direct marketing and distribution industries in the United States. The firm’s sector focus provides Freeman Spogli with a detailed knowledge and understanding of changes in consumer and business buying patterns, demographic trends, competitive dynamics and shifting distribution channels. Since its founding in 1983, the firm has invested $2.0 billion in 36 portfolio companies. The fund has offices in Los Angeles and New York.

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