Sentinel and management complete $66.2 million recapitalization of Castle Dental Centers



NEW YORK, May 15, 2003 - Sentinel Capital Partners is pleased to announce a $66.2 million recapitalization of Castle Dental Centers, Inc. Headquartered in Houston, Texas, Castle Dental develops, manages and operates integrated dental networks in Texas, Tennessee, Florida and California. Castle Dental provides general dentistry, orthodontic and other dental specialty services through 77 dental centers with approximately 200 affiliated dentists.

"This investment is consistent with Sentinel's plan to selectively invest in quality niche service businesses," said David Lobel, Sentinel's Founder and Managing Partner. "Castle Dental is a highly respected and recognizable brand in the dental services industry and has established a leadership position in its markets," Lobel noted. "We are also delighted to partner in this deal with Castle Dental's senior management who invested alongside us. We look forward to working closely with them and assisting in the company's growth plan," Lobel added.

"Castle Dental is well positioned to expand the range of specialty services it offers its patients and thereby to take advantage of the company's strong dental office system," said Paul Murphy, a Principal at Sentinel. "Our objective is to substantially increase Castle Dental's profitability over the next several years, and the company has the systems and infrastructure in place to accomplish this goal."

James M. Usdan, President and Chief Executive Officer, commented, "We are extremely pleased to announce the completion of our debt restructuring and recapitalization efforts, which have been ongoing for more than two years. The infusion of new equity into Castle Dental by Sentinel Capital Partners and the replacement of our senior credit facility with the new line of credit provided by GE Healthcare Services, substantially reduces our debt and provides Castle Dental a stable capital structure for the first time in several years. We have been able to achieve this result through the hard work of our employees and affiliated dentists by focusing on improving the quality of services provided to our patients, stringent cost controls, improving provider relations with our affiliated dental professionals, and selling or closing poorly performing dental centers. With our strengthened balance sheet and new financial partners, we will be able to continue our efforts to become the leading dental healthcare provider in the markets that we serve."

GE Healthcare Services, Castle Dental's existing senior lender, provided debt financing for the recapitalization.