In the News: 2008

Lombard 's been Working on the Railroad...Patience Rewarded as Lombard Carried Home Buyouts Magazine's "Large Market Deal of the Year" Award.

San Francisco, California
March 10, 2008

Lombard Investments, Inc. is pleased to announce today that its 2007 sale of the Dakota Minnesota and Eastern Railroad Corporation, the "DM&E", a Lombard portfolio company, to the Canadian Pacific Railway was awarded Buyouts Magazine's "Large Market Deal of the Year" Award on March 5th in New York City . In 1986, Lombard led an investor consortium that provided equity for the $34 million acquisition of the railroad's initial assets. The DM&E was sold for cash of $1.48 billion at closing and future contingent payments of up to $1.06 billion.

Matt Taylor, who served as a DM&E Board member, Lombard Managing Director and Lombard's partner in charge of this investment, said, "I am honored to accept the award on behalf of Lombard and would like to recognize the extraordinary vision, patience and hard work of DM&E's management, led by CEO Kevin Schieffer, the railroad's Board of Directors, and a group of highly talented and capable strategic and financial investors. They have been an amazing group to work with and we appreciate everyone's patience and support, which fortunately was highly rewarded with a return of approximately 30% IRR to the initial investors."

More than two decades ago, the potential growth and success of the DM&E were just a distant vision.  At the time, the DM&E operated as a small grain hauling rail line.  The management team and investors developed a vision of a much larger railroad, and ultimately of a highly efficient railway system that would transport not only grain directly to major food market centers in the mid-west, but also coal from the Powder River Basin in Wyoming to power stations along the Mississippi River.  Over time, the DM&E expanded its system through additional acquisitions and upgraded infrastructure. Ultimately, operating synergies and improved margins resulted in the creation of significant shareholder value.  The stars aligned in 2007 and so it was time to sell - and two decades of hard work and patience were well rewarded.

About the DM&E:
The DM&E Railroad began operations in 1986. Today, it is one of the largest regional (Class II) railroads in the United States , with 1,103 miles of track located principally in South Dakota and Minnesota . The DM&E also owns the Iowa, Chicago & Eastern Railroad Corporation ("IC&E"). The IC&E began operations in 2002.  It has 1,400 miles of track in Illinois , Iowa , Minnesota , Missouri and Wisconsin .  (www.dmerail.com)

About Lombard Investments:
Lombard is a leading international private equity investment manager with offices in San Francisco , Bangkok and Hong Kong . Formed in 1985, Lombard has made more than 75 controlling and significant minority investments in North America and Asia . The firm's investors include some of the world's largest and most respected financial institutions, major pension funds, and corporations, as well as family investment offices in North America, Europe and Asia . (www.lombardinvestments.com)

More information is available by contacting:

Mr. Thomas Smith Managing Director, Lombard Investments Email: tsmith@lombardinvestments.com