August 16, 2011

Sanders Tool Supply

Tulsa, Oklahoma — BlackHawk Industrial Distribution, Inc. today announced the acquisition of Sanders Tool Supply, a leading industrial distributor serving the MRO marketplace. Sanders Tool Supply, based in Peoria, Illinois, is the fourth acquisition of BlackHawk Industrial and follows the recent acquisitions of Oklahoma-based Duncan Industrial Solutions, Arkansas based Rogers Industrial, and Nebraska based Fuchs Machinery. With the acquisition of Sanders Tool Supply, BlackHawk expands its geographical footprint into the Central region of the U.S. Financial terms of the transaction were not disclosed.

Founded in 1938, Sanders Tool Supply is one of the premier industrial distributors of cutting tools, abrasives, and precision instruments along with a wide variety of MRO supplies serving end user customers primarily in the Iowa, Illinois, and Indiana markets. Bill Scheller, CEO of BlackHawk Industrial, said: "We are excited to add the talented employees of Sanders Tool Supply as part of our growing family of operating divisions within BlackHawk Industrial. Sanders Tool Supply, led by Jim Cote, has a very long history of being a supplier of choice with strong customer and vendor relationships in its local marketplace. We believe that Sanders Tool Supply will be further enhanced as part of Blackhawk Industrial as a result of additional operating scale, management resources and a broader product offering. We are also excited to share the combined resources of BlackHawk Industrial with the customer and vendor base of Sanders Tool Supply."

Mr. Scheller also added: "BlackHawk will continue to look for additional U.S. based industrial distributors to acquire as we further build out our business. Sanders Tool Supply adds to our business model in so many ways: local leadership, strong technical and value added selling, focus on engineered products, deep supplier support, and a strong team culture." Sanders Tool Supply also offers many services to support the entire BlackHawk Industrial customer base through their band saw weld centers, precision grinding and tool sharpening along with a complete comprehensive vending inventory management system.

BlackHawk Industrial will look to Jim Cote to continue to lead the Sanders Tool Supply Division. Mr. Cote will be a valued member of the BlackHawk Industrial commercial leadership team on a go forward basis. Jim is well respected in our industry and in the local Peoria community. Jim currently serves on various Boards of Directors of several volunteer organizations in the Sanders' local market area. Mr. Scheller said: "We look to Jim's continued leadership at Sanders Tool Supply and in his ability to impact the local community through very important charitable efforts which is a part of our culture. Jim has been tasked to grow the Sanders Tool Supply division of Blackhawk Industrial both organically and through future acquisitions in its local marketplace. Our goal is to add new sales and customer service resources to deepen our penetration in the local markets."

John Spinoso, former CEO and owner of Sanders, said: "As I looked at an ideal transition of ownership of our family owned business at Sanders Tool Supply, it was very important to me to find a true steward that would carry on what our employees have built over the years. As I looked at the culture and leadership style that BlackHawk is building, we believe it matches the direction we have found successful at Sanders Tool. In addition,

I strongly believe in the vision and strategy of empowering the local commercial leaders, who intimately know their local marketplaces, customers, and employees. The team at Sanders Tool Supply Division will be well served under the support and structure of the BlackHawk Industrial leadership.

About BlackHawk Industrial

BlackHawk Industrial Distribution, Inc. was formed by Bill Scheller, former CEO of ORS-Nasco, and Brazos Private Equity Partners, LLC, a leading Dallas-based private equity firm, to implement an active buy-and-build strategy in the highly fragmented, $400 billion industrial distribution market.

Background of Bill Scheller

Bill was most recently CEO of ORS Nasco, one of the largest, pure wholesale distributors of industrial supplies in North America. Bill has held leadership positions for almost 30 years at companies such as Pillsbury, Patterson Companies, as well as ORS Nasco. During nine years at ORS Nasco, Bill provided the overall leadership and direction for the company in North America. ORS Nasco experienced significant revenue and earnings growth, improved operations and working capital efficiency and enhanced its sales and marketing capabilities. These efforts led to the successful sale of ORS Nasco to United Stationers, Inc. in 2007.

About Brazos Private Equity Partners, LLC

Brazos Private Equity Partners, LLC is a Dallas-based private equity firm that manages approximately $1.4 billion of equity capital. Brazos seeks to partner with outstanding management teams and/or families of closely-held middle-market businesses to maximize value. Brazos has been one of the most active middle-market private equity investment firms over the past decade, having completed 55 acquisitions in a broad range of industries including consumer, food and beverage, business and financial services, healthcare, manufacturing / industrial and distribution. Brazos has significant experience acquiring, growing and monetizing distribution businesses. Since 2002, Brazos has invested in four successful distribution companies: ORS Nasco, Inc., Shelter Distribution, Inc., Strategic Equipment and Supply Corporation and Tri-Northern Security Distribution, Inc.

Contact
Bill Scheller
President / CEO
BlackHawk Industrial Distribution, Inc.
5460 South Garnett Road - Suite G
Tulsa, Oklahoma 74146
Cell: 918-360-1810
Work: 918-610-4710
Fax: 918-664-5720

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