SAN FRANCISCO, CA – December 28, 2011 –  Gryphon Investors (“Gryphon”), a leading middle market private equity firm based in San Francisco, announced today that it has acquired a majority interest in K&N Engineering (“K&N”), a leading provider of premium air and oil filtration products for the automobile industry. Jerry Mall, one of the original founders of K&N, along with current management will continue to hold a significant investment in the Company. Terms of the deal were not disclosed.

Based in Riverside, California, K&N is the inventor and the world’s leading manufacturer of washable performance air filters and air intake systems, which are designed to increase a vehicle’s horsepower and last for the life of a vehicle. Founded in 1964, K&N today also has operations in the United Kingdom and the Netherlands.

“K&N is the leading performance filter brand in the automotive space, known for its authenticity and a tremendous reputation for quality,” said Gryphon Managing Partner David Andrews. Keith Stimson, Gryphon Partner and head of its Consumer Products and Services Group, added, “Auto enthusiasts have sworn by K&N products for more than 40 years, and we look forward to working with K&N’s talented management team to further build its brand in the U.S., while accelerating its international expansion.”

“K&N is thrilled to be partnering with Gryphon, and we believe, as a result of their industry focus and operating resources, that they are the ideal partner as we embark upon our next expansion phase,” said Steve Rogers, CEO of K&N. “Consumer affinity and demand for our products continues to grow, and there are a multitude of expansion opportunities that we are excited to pursue. We believe Gryphon will help us expand within our core customer base, and attract others who want to achieve the highest performance from their cars and trucks.”

K&N invented the reusable high flow cotton air filter in 1969, and today sells more than 2,000,000 filters each year designed for cars, trucks, motorcycles, engines, and industrial applications in over 30 countries. K&N’s products are sold through the nation’s largest auto part suppliers, as well as specialty retailers, and it is the leading air filter supplier to NASCAR.

This is Gryphon’s second investment in the automotive aftermarket sector. The firm previously owned MSD Ignition, a branded, consumer products company that manufactures and sells high-performance automotive ignition components to aftermarket suppliers.

Gryphon was advised by Kirkland & Ellis LLP and Adam Raper, a veteran in the automotive aftermarket sector. K&N was advised by Best Best & Krieger LLP.

About K&N Engineering

K&N Engineering in Riverside, California, continues to be a US manufacturer with over 400,000 square feet of facilities and 600 employees. K&N is dedicated to offering products that perform as promised designed by actual sportsman class racers built by American employees. From their Million Mile Warranty to their Consumer Protection Pledge, K&N stands behind their products and their consumers 100%. For more information, visit www.knfilters.com.

About Gryphon Investors
Based in San Francisco, Gryphon Investors focuses on leveraged acquisitions of, and growth investments in, middle-market companies in partnership with experienced management. Having managed $1 billion of discretionary equity capital, Gryphon has an extensive track record of investing $25 to $75 million of its own capital in companies with sales ranging from $25 to $250 million. Gryphon prioritizes investment opportunities where it can form proactive partnerships with owners and executives to build leading companies, utilizing Gryphon’s capital, professional resources and operational expertise. Visit www.gryphoninvestors.com for more information.