Permira to Acquire Aearo Technologies; Significant Investment in U.S.-Based International Business by The Permira Funds

Permira, a leading international private equity firm,today announced that a new holding company formed by the funds itadvises has signed a definitive agreement to acquire AearoTechnologies Inc. ("Aearo"), one of the world's leading designers,manufacturers and marketers of a broad range of personal protectiveproducts and energy absorbing composites for approximately US$765million. This transaction marks a significant U.S. investment by thePermira Funds and is consistent with their strategy of investing ininternational companies with a strong European presence.

Aearo is currently majority owned by Bear Stearns MerchantBanking, together with an investor group including Aearo's management.

Aearo is a rapidly growing safety products business based inIndianapolis, Indiana, with revenues of more than US$420 million in2005. Aearo features a portfolio of high-performance, global brands,such as E-A-R(R), AOSafety(R), Peltor(R) and SafeWaze(TM). E-A-R(R)and Peltor(R) are particularly well established in European markets.

As part of the transaction, Aearo management will acquire a stakeof approximately 10% in the newly formed holding company and will begranted additional ownership through an option plan. The existingChairman and CEO, Michael A. McLain, will continue to lead Aearo,along with his existing management team.

Michael A. McLain, Chairman and CEO of Aearo, commented: "We areexcited to partner with Permira to take advantage of the significantstrategic opportunities for the expansion and development of ourbusiness. Our employees worldwide have worked hard to achieve leadingmarket share positions through innovation and new product development.Our new partnership will enhance these efforts. With Permira'sstrategic guidance, international reach and investment capital, Aearowill be even better positioned to accelerate its growth and strengthenits market positions. This partnership will present a number ofexciting opportunities for the customers and employees of Aearo in theyears ahead."

Thomas H. Lister, of Permira, said: "Aearo Technologies fitssquarely within the Permira Funds' investment criteria: a rapidlygrowing international business with a superb management team andsignificant cash flow. This acquisition reflects our desire tocontinue to build a diverse international investment portfolio thatbuilds on our European roots. Aearo's CEO Mike McLain and his teamhave created strong brands and achieved tremendous growth, and we lookforward to working with them to build upon the success of Aearo'sbusinesses worldwide."

Douglas R. Korn, Senior Managing Director of Bear Stearns MerchantBanking, noted: "We are proud to be associated with a company ofAearo's exceptionally high caliber and with its talented managementteam. We are quite pleased with Aearo's new partnership with Permira,which is well positioned to support Aearo's continued worldwidegrowth."

The transaction is subject to financing, regulatory approvals andother customary closing conditions. Banc of America Securities LLC andBear, Stearns & Co. Inc. acted as the financial advisors to Aearo.

About Aearo Technologies

Headquartered in Indianapolis, Ind., Aearo Technologies Inc.(www.aearo.com) is a global leader in the personal protectionequipment industry. The Company manufactures and sells technologicallyadvanced hearing protection devices, communication headsets,non-prescription and prescription safety eyewear, face shields,reusable and disposable respirators, fall protection equipment andhard hats. Through its Specialty Composites business, the Company is aleader in the energy absorbing composites industry. The Companyprovides engineered system solutions utilizing a wide array ofproprietary materials to control excess noise, vibration and thermalenergy. These products are marketed under the brand name E-A-R(R)Specialty Composites. Aearo's products are sold in more than 70countries.

About Permira

Permira is a leading international private equity specialist. Asan independent business, Permira is owned and controlled by itspartners. The firm's team of 90 professionals, based in Frankfurt,London, Madrid, Milan, New York, Paris, Stockholm and Tokyo, advisesthe Permira Funds with a total committed capital of Euro 11 billion.Since 1985, the Permira Funds have completed over 270 private equitytransactions. During the last year, the Permira Funds have committedto 5 transactions with a combined transaction value of over Euro 20billion. (www.permira.com)

About Bear Stearns Merchant Banking

Bear Stearns Merchant Banking, the private equity affiliate of TheBear Stearns Companies, Inc., (NYSE: BSC) invests private equitycapital in leveraged buyouts, recapitalizations and growth capitalopportunities alongside superior management teams. Bear StearnsMerchant Banking is currently investing a $1.5 billion institutionalprivate equity fund. Since its inception in 1997, Bear StearnsMerchant Banking has been an investor in over 40 portfolio companiesacross a broad range of industries. (www.bsmb.com)