Rosetta Stone Completes Initial Public Offering above the Range

Company Achieves Significant Growth Backed by ABS Capital Partners and Norwest Equity Partners

BALTIMORE & MINNEAPOLIS--()--ABS Capital Partners (“ABS Capital”) and Norwest Equity Partners (“NEP”) today announced that their portfolio company, Rosetta Stone Inc. (“Rosetta Stone” or “the Company”) has completed its initial public offering, raising $112 million. Rosetta Stone is the leading developer and marketer of technology-based language learning solutions. Laura Witt and Phil Clough, General Partners of ABS Capital, and John Lindahl, Managing General Partner of NEP, will continue to serve on the board of directors of the Company.

ABS Capital and NEP together invested in the Company through a management buyout in January 2006. Over the course of their three year investment, the two investors worked closely with Tom Adams, Rosetta Stone’s CEO, and his management team, helping them develop and achieve their strategic, organic growth plans, including growing revenue from $48 million in 2005 to $209 million in 2008.

Tom Adams, CEO of Rosetta Stone, stated, “As a CEO of a rapidly growing company, it has been invaluable to have partners like ABS Capital and NEP. They have been present for decisions, big and small, and I will continue to seek their counsel as we work to create value for our shareholders.”

Rosetta Stone has a distinguished business model within the language learning market. With a scalable technology platform and proprietary content that can be used across many languages, the Company is able to cost-efficiently develop a broad product offering. Rosetta Stone learning software is offered in more than 30 languages and is used by a global customer base, including individuals, educational institutions, armed forces, government agencies and corporations.

Laura Witt stated, “Rosetta Stone is exactly the type of company we want to back—fast-growing with strong management and a leading market position. We were pleased that NEP could join us in the investment.” She added, “We congratulate the Company for reaching this important milestone in its growth trajectory.”

In addition to Rosetta Stone, ABS Capital and NEP have successfully invested together for the past 15 years backing such leading companies as Transactions Systems Architects, Inc. (now ACI Worldwide, Inc. (NASDAQ:ACIW) and CTC Distribution (now R.R. Donnelley).

“Under the leadership of Tom Adams, the entire Rosetta Stone management team has done a spectacular job of building the whole language learning category through its Dynamic Immersion methodology,” stated John Lindahl. “The Company is well-positioned for strong continued growth, especially with language learning continuing to play such a critical role in our global world.”

About Rosetta Stone

Rosetta Stone is changing the way the world learns languages, offering a highly personalized, interactive platform that is acclaimed for its speed and power to unlock the natural language learning ability in everyone. Available in more than 30 languages, the Rosetta Stone language learning solution is used by schools, organizations and millions of individuals in over 150 countries throughout the world. Inc. magazine named Rosetta Stone one of the 500 fastest-growing companies in the United States, and for the third year Deloitte and Touche has named it one of the fastest-growing technology companies in Virginia. The company was founded on the core beliefs that learning a language should be natural and instinctive, and that interactive technology can powerfully replicate the immersion experience and activate the natural language-learning ability in learners of any age. For more information, visit www.rosettastone.com

About ABS Capital Partners

Founded in 1990, ABS Capital Partners has established a strong track record for investing in later-stage growth companies. With $1.5 billion under management, ABS Capital helps companies choose the growth initiatives that build the greatest long-term value. ABS Capital has partnered with numerous portfolio companies to achieve successful outcomes, including over 40 initial public offerings and acquisitions by market leaders like CBS Corporation, EMC Corporation, LabCorp and Pitney Bowes Inc. For more information, please visit www.abscapital.com

About Norwest Equity Partners

Partnering with management teams since 1961, Norwest Equity Partners is a leading private equity firm focused on building companies into industry leaders. With a reputation for quality investments and exceptional financial returns, Norwest Equity Partners manages $4.6 billion of capital through a series of equity and mezzanine funds. The firm is currently investing NEP IX, a $1.2 billion fund. Additional information can be found at www.nep.com

Contacts

ABS Capital Partners
Stephanie Carter, 410-246-5609
scarter@abscapital.com
or
Norwest Equity Partners
Heather Goodwin, 612-215-1676
hgoodwin@nep.com

Contacts

ABS Capital Partners
Stephanie Carter, 410-246-5609
scarter@abscapital.com
or
Norwest Equity Partners
Heather Goodwin, 612-215-1676
hgoodwin@nep.com