Press Release – March 8, 2006

Covington Associates Advises on Buyouts Magazine “Public-to-Private Deal of the Year”

Boston, MA—March 8, 2006—At the 18th Annual Buyouts Symposium East in New York City, Buyouts Magazine announced the recipients of its annual Deal of the Year awards.   The going private transaction of The Vermont Teddy Bear Company by Mustang Capital LLC was named the “Public-to-Private Deal of the Year.”  Covington Associates acted as the financial advisor to Vermont Teddy Bear in the transaction which closed on September 30th, 2005 and was valued at $47 million, or $6.50 per share.

The Buyouts Symposium is sponsored by Thomson Financial.  It takes place at the prestigious PierreHotel in New York and attended by many of the country’s top private equity and investment professionals.  Awards are handed out in a variety of categories, honoring the top deals in the small, middle and large markets, and top lenders and investment professionals.

According to Chris Covington, Managing Director at Covington Associates, “The Vermont Teddy Bear Company was a natural candidate to be brought private.”  Bogged down with quarterly earnings reports, and the increasing cost of Sarbanes Oxley compliance, small cap companies like Vermont Teddy Bear are finding it hard to focus on long term shareholder value.  Now that the company is private, it will be removed from public scrutiny and able to concentrate on its future growth potential.

Elizabeth Robert, CEO of The Vermont Teddy Bear was quoted as saying “This transaction brings significant value to our stockholders and enables Vermont Teddy Bear to continue building upon our leading position in the gift delivery industry.  Because Covington recognizes the attributes of business integrity, we found great partners able to not only perceive future return but understand and value our Company’s culture and our mission.”

About Covington Associates

Covington Associates is a specialty investment banking firm founded in 1991 serving technology, healthcare, consumer, industrial and business services companies throughout the world. Focused on debt and equity capital raising, debt and equity restructuring, mergers and acquisitions and strategic advisory assignments for middle market companies, Covington Associates has completed transactions ranging in value from $10 million to over $1 billion for both private and publicly traded companies. To learn more about Covington Associates, visit www.covingtonassociates.com.