Tonka Bay Equity Partners announces new $125 Million fund

Seeking small-cap companies to grow through leveraging of their proven investment and management strategies.

Minnetonka, Minn. (February 7th, 2006)

Tonka Bay Equity Partners announces its' new $125 million fund, Bayview Capital Partners II. The firm acquires and invests in small and medium sized companies operating in the manufacturing and business-services sectors.

Tonka Bay Equity Partners exceeded its' original $100 million goal for the fund by $25 million. Investors in the new fund include Wells Fargo, EXCEL Bank, M & I Bank, BankFirst, Crown Bank, BNC Bank and a number of high net worth individual investors.

"We are seeking companies that can benefit from our operating experience and our access to a wide network of operating partners and service providers," says Cary Musech, Managing Principal of Tonka Bay Equity Partners. "As former executives of middle market companies, we leverage our operating expertise to help companies improve their operations, strengthen their management teams, and execute corporate development plans that enhance shareholder value."

This fund will build on the successful investment strategy of the first fund by seeking underserved small-cap companies that are profitable, have proven management teams and have strong growth opportunities. Tonka Bay's first fund, Bayview Capital Partners I, invested in 15 companies. They have successfully exited 8 of these companies, generating a combined internal rate of return of over 30 percent.

"It is especially gratifying to have executives from our portfolio of companies say that our leadership, financial guidance and operational expertise were instrumental in solving difficult issues and creating new growth," said Peter Kooman, Managing Principal of Tonka Bay. The firm helps companies achieve growth objectives by creating independent boards including Tonka Bay Principals; building management teams; realigning marketing strategies; improving operations; identifying and executing strategic acquisitions; implementing effective financial management strategies; and finding attractive exit strategies.

Midwest Dental is one example where the firm executed on a strategic plan that significantly improved performance and shareholder value. The annual sales increased almost 40% over a three-year period. The company was sold to a financial buyer and Bayview realized 5.8 times its investment. Penn Wheeling Closure, another example, has increased sales almost 70% through internal growth and two add-on acquisitions. Operating cash flow has almost doubled over the investment period and market share has increased from under 50 percent to approximately 70 percent.

About Tonka Bay Equity Partners

Based in Minnetonka, MN, Tonka Bay Equity Partners is a private equity firm that acquires and invests in lower middle market businesses in the highly-engineered manufacturing, business services and value-added distribution sectors. For more information, call (952) 345-2035 or visit www.tonkabayequity.com.