has been acquired by

Capstone Advises AQS, Inc. in Its Transaction with Grey Mountain Partners

January 2005

Boston, MA - AQS, Inc., a leading provider of commercial policy administration solutions to the property and casualty insurance industry has been acquired by Grey Mountain Partners, a New York-based private equity firm.   Capstone Partners LLC, a leading national investment banking advisory firm, represented AQS as its exclusive financial advisor throughout the transaction process.  Financial terms of the transaction were not disclosed. 
 
“Grey Mountain reviewed many insurance solution vendors and after an in-depth analysis of the industry, AQS emerged as one of the premier solutions providers.  We are excited to partner with AQS,” stated Ben Ault, Business Development Manager of Grey Mountain Partners. “Our role will be to provide capital to help the AQS management team further expand and accelerate the value of their solutions offerings to the property and casualty insurance market.”  
 
“We are very happy to begin 2005 with such a marquee transaction.  Grey Mountain brings to the table all the financial and strategic resources necessary to effect a very successful recapitalization of AQS,” said Tim Harned, Managing Director at Capstone Partners LLC.  “Under a new ownership structure and with ready access to growth capital, AQS is now able to strengthen its position as the leading Web-centric policy administration solution provider for insurance carriers.”          
     
AQS’ President and CEO Kevin Flanagan echoed similar sentiments.  “AQS has been providing innovative solutions to the property and casualty industry for over 25 years.  We believe that this new partnership with Grey Mountain will enable AQS to continue to provide our customers with the best solutions in the industry.  Grey Mountain Partners embraces AQS’ strategy, vision and technical direction and is enthusiastic about our growth prospects.”     
 
Grey Mountain Partners is a private equity firm focused on investing in middle-market companies and helping those companies achieve operational excellence. The firm specializes in acquiring and growing companies with revenues between $25 million and $250 million.  Grey Mountain maintains offices in Boulder, Colorado and New York, New York.
 
AQS, Inc.  Since 1979, AQS has provided leading policy administration solutions for commercial property and casualty insurance carriers. In addition to its innovative Web-centric product, AQS/advantage™, and integration solution, AQS/advantage Integrator, AQS provides diverse client service solutions to numerous insurance companies throughout the United States. AQS/advantage supports all commercial lines of business, in all states, and leverages the Internet and innovative technologies such as Web services and .NET to automate and shorten the entire policy transaction lifecycle. AQS is a Microsoft Gold Certified Partner.
 

Industry Experience

Technology, Media & Telecom

Lead Professional

John Ferrara

Founder & CEO
 "Capstone Partners was key for AQS in achieving our objectives of securing a growth equity partner, realizing liquidity for our shareholders, and managing many divergent and, oftentimes, conflicting constituencies.  Capstone’s ability to secure an acceptable transaction was noteworthy as was their passion and commitment to the process.  In fact, an acceptable transaction was only realized because of Capstone’s ability to keep multiple buyers interested and committed to a transaction.  Given the relationships that developed over our process, I would not hesitate to use Capstone again in our future endeavors.” 
Kevin Flanagan
President and CEO
AQS, Inc.