DXP Enterprises, Inc. Announces Completion of the Acquisition of Precision Industries and Conference Call

Business Wire, Sept 10, 2007

HOUSTON -- DXP Enterprises, Inc. (NASDAQ:DXPE) announced today the completion of the acquisition of Precision Industries. The total purchase price of $106 million was financed with $24 million of cash available on DXP's balance sheet and borrowings from a new $130 million senior credit facility.

Although DXP has and continues to be a highly acquisitive company, to date, this is the largest transaction the Company has completed. For this reason, DXP will host a conference call to be web cast live on the Company's website (www.dxpe.com) on Tuesday, September 11, 2007, at 4:00 p.m. Eastern Time. Web participants are encouraged to go to the Company's website at least 15 minutes prior to the start of the call to register, download and install any necessary audio software. The online archived replay will be available immediately after the conference call at www.dxpe.com and at www.viavid.net.

"We are pleased to announce that this acquisition is expected to be accretive to GAAP earnings in 2008 and breakeven for 2007 and immediately accretive to cash earnings. We have not factored any synergies into our accretion analysis but we believe we can achieve purchasing synergies of $2 to $4 million on an annualized run rate beginning in mid 2008," said Mac McConnell. He further stated, "Precision currently has a run rate of approximately $250 million in sales and a trailing twelve month EBITDA (earnings before interest, depreciation and amortization) of $14.5 million. We estimate that annual amortization of intangibles associated with the acquisition will be approximately $3 million per year and yearly depreciation of $2.5 million."

David Little made the following comments regarding the transaction, "DXP Enterprises has a three pronged growth strategy that focuses on year-over-year organic growth, operational improvement and strategic acquisitions. If we do acquisitions right, we help our organic growth by taking advantage of the revenue synergies the acquired companies present. DXP's mission is to be the best solution for the industrial customer. We feel Precision helps us in multiple ways toward accomplishing this goal.

Precision has a history of serving the industrial product needs of its customers for over 60 years building a strong reputation on customer service and innovation in the industrial distribution market. It is perhaps best known as a power transmission and bearing distributor but it is really much more than that. It distributes a wide range of products including abrasives & cutting tools, bearings, power transmission, electrical products, fasteners, fluid power, hand & power tools, janitorial products, linear products, lubrication, material handling, pipes, valves & fittings, rubber products and safety products. It delivers these products through two channels, a branch distribution network and an integrated supply offering called Supply Chain Services.

Precision's branch distribution network is made up of 50 branch locations located in 28 states. These branches are very similar to DXP branches: stocking locations staffed with inside and outside sales reps servicing local accounts and providing walk-up service. Geographically, Precision's branch network is very complementary to DXP's existing branches as there are overlaps in only five markets of the 50 local markets that Precision services. We believe this is a key strategic benefit to this transaction.

Precision's second channel is its integrated supply offering called Supply Chain Services. Simply put, integrated supply is the onsite management of a customer's indirect supply chain functions including procurement and inventory management. Precision is a leader in this growing segment of indirect supply chain management with over 52 on site integrations in North America.

Precision Industries fits within our primary acquisition criteria of acquiring companies that allow us to gain access to new geography, strengthen our product and service offering and have established and accomplished senior management and employee base who have the drive and desire to stay with the business and accelerate growth in the future. Precision's extensive branch network, its integrated supply platform, and its people truly differentiate the company and present a unique opportunity for DXP for a variety of reasons.

First, people

Our business begins and ends with people. As you can imagine, a company like Precision has had many different suitors over the years. We were able to get to the finish line with Precision in large part because both companies share many common values including our culture, our management philosophy, and the value we place on our people. We are very pleased to announce that the senior management team in charge of Precision's day-to-day operations has decided to join DXP. This team, led by Chris Circo will ensure operational continuity and bring significant expertise in the Integrated Supply business and in product sourcing to the combined company. To align the interest of this team with those of DXP and its shareholders, we have also provided for restricted stock grants to key individuals at Precision and incorporated an earn-out provision into the definitive agreement which is based on achieving several performance metrics.