Watermill Ventures Sells Vertex Distribution to DXP Enterprises, Inc.

Lexington, MA – On August 28th, 2008, Watermill Ventures sold Vertex Distribution (“Vertex”, the “Company”) to DXP Enterprises, Inc. (NASDAQ: DXPE), a national distributor of maintenance, repair and operating (MRO) products, equipment and services to industrial customers.

Vertex, headquartered in Attleboro, Massachusetts, is one of the largest North American master distributors of corrosion resistant industrial fasteners and also carries a full line of metric fasteners. The Company was founded by Joseph Jenks in the early 1800s. In 1972, David Hirsch, the current Chairman and CEO, and his family acquired the Company, and expanded the company’s expertise, product offerings and geographic reach.

When Vertex was acquired by Watermill in August, 2005, Watermill worked closely with management to strengthen and further extend the company’s growth strategy. With Watermill’s support and guidance, management pursued new initiatives including: (i) strategic acquisitions to expand markets and products; (ii) new product line development; (iii) a new state of the art technology resource; (iv) moving the east coast operations and corporate headquarters to a made to order location; and (v) a pronounced increase in value-added services.

“Watermill’s expertise and support enabled us to significantly strengthen the Company and organization,” said David Hirsch, Chairman and CEO of Vertex Distribution. “Last fiscal year, Vertex Distribution achieved approximately $71.9 million in sales and $13.3 million in EBITDA. In the last two years, we’ve added metric fasteners, rivets, hose clamps and other products as well as invested in new infrastructure and facilities. With Watermill’s guidance and the exceptional contributions of the Vertex team, we’ve achieved significant milestones together, including the acquisition by DXP.”

“We have enjoyed a terrific partnership with Vertex’s management team in our joint pursuit of a solid growth strategy,” stated Steven Karol, Managing Partner and Founder of Watermill Ventures. “Now, Vertex has found a wonderful home with DXP. Watermill is proud to have been a part of the Company’s development and to see it take this new step with DXP.” W.Y. Campbell & Company served as financial advisor to the sellers in this transaction.

About Watermill Ventures

For nearly three decades, Watermill has been partnering with management teams to transform and build great companies. By combining customized transaction structures with the resources and expertise executives need to drive strategic and operating change, Watermill helps its portfolio management teams thrive, and to generate extraordinary returns for all stakeholders. Watermill partners have over 165 years of combined experience with extensive expertise in a wide variety of industries. Watermill focuses on investing in companies where there is the opportunity to enhance performance through strategic change, operating improvements, or balance sheet realignments.

While we invest where we believe we can create value for all stakeholders, our primary expertise is with manufacturing, distribution and facility or equipment-based services. We are experienced in a variety of company situations and transaction types including corporate divestitures, familyowned businesses, businesses or management teams in transition, businesses that have experienced a recent recovery in performance, and companies that are underperforming relative to their peers or turnaround situations.

For more information, contact:

Robert Ackerman
(781) 891-6660
backerman@watermill.com

August 29, 2008