Safeguard Scientifics Leads Investor Group to Acquire Pac-West
Telecomm, Inc., a Leading West Coast Telecommunications Company

    WAYNE, Pa., July 6 /PRNewswire/ -- Safeguard Scientifics, Inc.
(NYSE:SFE), the New York Stock Exchange-listed strategic information systems
company, announced today that it has signed a definitive agreement to purchase
Pac-West Telecomm, Inc., a privately-held, leading west coast Competitive
Local Exchange Carrier (CLEC).
    Pac-West is a high-growth, profitable, switch-based CLEC with operations
in California and Nevada.  The company has three switches regionally located
serving all of California and has points-of-presence in each of the 11 local
access and transport areas (LATAs) in California, allowing it to originate and
terminate traffic in every LATA in the state.  The company has also
established a strong position in providing Internet Service Providers (ISPs)
with local access lines.
    The $115-million transaction will provide Pac-West with the capital to
accelerate its growth and expansion initiatives.  The investor group, led by
Safeguard Scientifics, includes three private equity funds associated with
Safeguard -- TL Ventures, SCP Private Equity Partners, and EnerTech Capital
Partners -- and William Blair Capital Partners.  Bruce Westphal, chairman of
Pac-West, and John La Rue, founder and president, are also part of the
investor group and will remain on the company's board of directors.
    "This transaction demonstrates Safeguard's enormous financial leverage in
the private equity marketplace and is a superb example of how Safeguard and
its associated funds can structure a package which meets the financing needs
of an individual investment opportunity.  We are excited to be a catalyst in
this era of deregulation in the telecommunications industry," stated Warren
"Pete" V. Musser, Safeguard's chairman and CEO.
    Jerry Johnson, a senior vice president of Safeguard and a former senior
executive at USWest, commented, "Pac-West is very different from many of the
other CLECs.  It has continued to operate profitably while capitalizing on the
tremendous growth opportunities in the CLEC market."
    Upon closing of the transaction, which is subject to various conditions
and approval by appropriate government agencies, Mr. Wallace W. Griffin will
be appointed chief executive officer of Pac-West.  Mr. Griffin brings over
35 years of telecommunications industry experience to the company.  From 1994
to 1997, Mr. Griffin worked for Jones International, serving as group
president for their CLEC and educational television subsidiaries.  Before
Jones International, Mr. Griffin held numerous senior management positions at
USWest from 1962 to 1992, including executive vice president of USWest and
president/CEO of USWest Marketing Resources Group.  Until the closing,
Mr. Griffin will work with the company as a consultant.  Mr. La Rue, the
company's founder and president, will continue to remain actively involved in
the operations of the company.
    Safeguard Scientifics, Inc. is a unique partnership of entrepreneurial
companies focused on information technology markets.  Safeguard has a proven
track record of bringing emerging companies to market through its rights
offerings to Safeguard shareholders.  Past Safeguard rights offerings include
Novell, Inc., CompuCom Systems, Inc., Cambridge Technology Partners
(Massachusetts), Inc., Coherent Communications Systems Corporation, USDATA
Corporation, Integrated Systems Consulting Group, Inc., Sanchez Computer
Associates, Inc., Diamond Technology Partners Incorporated, ChromaVision
Medical Systems, Inc., OAO Technology Solutions, Inc. and DocuCorp
International, Inc.
    SCP Private Equity Partners, L.P. is a private equity investment fund
which makes post-venture stage investments in growth companies.  The fund,
which is sponsored by Safeguard Scientifics, Inc., has $265 million under
management and invests in a broad range of industries.
    TL Ventures manages a series of private equity funds with $540 million
under management, focusing primarily on private equity investments in the
areas of information technology, software, biotechnology and business
services.
    EnerTech Capital Partners L.P. is a $50 million private equity fund
specializing in service and technology companies related to the deregulation
and convergence of the utility marketplace.
    William Blair Capital Partners is a private equity investment firm with
$670 million of capital under management.  The Chicago-based firm invests in
venture capital financings, leveraged buyouts and recapitalizations of
well-managed growth companies.