Dec 02, 2002

Bear Stearns Merchant Banking Announces Purchase of Vitamin Shoppe

NEW YORK, New York —December 2, 2002— Bear Stearns Merchant Banking announced today that it has acquired Vitamin Shoppe Industries Inc., a privately held retailer and direct marketer of vitamins, minerals, supplements and other nutritional products.  Started in 1977 as a corner shop in New York City by its founder and current Chief Executive Officer Jeff Horowitz, the company has grown rapidly over the past five years and now operates 120 retail stores in 14 states and Washington DC, along with a nationally distributed catalog and an industry-leading Internet operation.  Terms of the transaction were not disclosed.

Commenting on the acquisition, John Howard, head of Bear Stearns Merchant Banking, said, “The prospect of acquiring Vitamin Shoppe, a solid business with industry leading sales per square foot and a strong, proven management team, is extremely compelling.  We feel this acquisition represents a tremendous market opportunity, especially as the US population ages and becomes more health conscious.”  The acquisition of Vitamin Shoppe represents the third purchase of a retail chain by Bear Stearns Merchant Banking.  Two senior managing directors of Bear Stearns Merchant Banking, Doug Korn and Rick Perkal, have joined the Company’s board of directors, along with Paul Lehman, a vice president of the group.

Company management, including Mr. Horowitz and Tom Tolworthy, President and Chief Operating Officer, participated in the acquisition and will continue to lead the company. “Tom and I are delighted to be working with Bear Stearns Merchant Banking to build this business into the leading supplement retailer offering the broadest product selection at the most competitive prices.  We believe we have a lot to look forward to and that this transaction bodes well for the future of our brand,” said Mr. Horowitz.

Vitamin Shoppe Industries Inc. is a privately held New Jersey based retailer and direct marketer of vitamins, minerals, supplements and other nutritional products.  Offering an unsurpassed selection of high quality products at discount prices, Vitamin Shoppe sells over 25,000 items from more than 350 leading brands through 120 stores and nationally through its Internet and catalog operations.

Senior debt for the transaction was provided by a lender group led by Bear, Stearns & Co. Inc.and BNP Paribas.  Subordinated debt was provided by Blackstone Mezzanine Partners L.P.

Bear Stearns Merchant Banking, the dedicated private equity arm of Bear, Stearns & Co.  Inc., invests private equity capital in compelling leverage buyouts, recapitalizations and growth capital opportunities alongside superior management teams.  Bear Stearns Merchant Banking currently manages a $1.7 billion equity capital pool and, since its inception in 1997, has been an investor in 27 portfolio companies across a broad range of industries, including specialty retail.  More information about Bear Stearns Merchant Banking can be found at www.bsmb.com.

Founded in 1923, Bear, Stearns & Co. Inc. is a leading worldwide investment banking and securities trading and brokerage firm, and the major subsidiary of The Bear Stearns Companies Inc. (NYSE:BSC).  With approximately $29.6 billion in total capital, Bear Stearns serves governments, corporations, institutions and individual worldwide.  The company’s business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales, trading and research, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services.  Through Bear, Stearns Securities Corp., it offers financing, securities lending, clearing and technology solutions to hedge funds, broker-dealers and investment advisors.  Headquartered in New York City, the company has approximately 10,500 employees worldwide.  For additional information about Bear Stearns, please visit the firm’s Web site at http://www.bearstearns.com/.