1
Exhibit 99.1
FOR IMMEDIATE RELEASE: THURSDAY, JUNE 5, 1997
CONTACT: Gary Allcorn Wayne Brown
Sr. VP Finance Vice President
DXP Enterprises Carl Thompson Associates
281-531-4214 303-494-5472
DXP ENTERPRISES ACQUIRES TWO SUPPLIERS
HOUSTON, TX -- DXP Enterprises, Inc. (OTC BB: DXPED) announced it has acquired
privately held Pelican State Supply Co., Inc., and also announced that it has
acquired Strategic Supply, Inc. Pelican, an integrated supply company, had
annual sales of approximately $14 million from its general mill supply
business. Strategic, a traditional and integrated supply company, had
approximately $50 million in revenue for fiscal 1996. DXP had 1996 revenue of
$125 million.
The aggregate consideration for the transactions consisted of approximately
$5,172,442 cash, 280,428 shares of DXP common stock and notes, and assumed debt
and liabilities of approximately $7,690,518. The purchase prices are subject
to various adjustments.
"More and more companies are outsourcing the purchasing and management of
maintenance, repair and operating supplies to achieve substantial cost savings,
and DXP plans on expanding its integrated supply business through acquisitions
like this one," said David R. Little, chairman and chief executive officer.
"Building our integrated supply business will enable DXP to participate in this
fast-growing market, the growth of which industry sources forecast at 40%
annually through the year 2000, and position the company to meet the needs of
customers who want a mix of traditional and integrated supply packages."
DXP Enterprises, Inc. is a Houston-based traditional and integrated distributor
of industrial operating supplies consisting primarily of pumps and pump
accessories, valves and valve automation products, and bearing and power
transmission equipment. The two acquisitions recently completed add general
mill supply and safety products to the product mix of DXP. The company serves
customers in oil and gas transportation and distribution, petrochemicals, wood
products, food and beverage and construction industries, as well as
municipalities. Prior to the acquisitions, DXP had three wholly owned
operating units: Sepco Industries, Wesco Equipment, and American MRO. The
acquisitions will add Strategic Supply and Pelican State Supply as additional
operating units.
This press release includes "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other than
statements of historic fact included in this press release, including without
limitation, the
2
company's business strategy, plans and objectives, are forward-looking
statements. Although DXP believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Factors that could cause actual results
to differ materially from DXP's expectations include, without limitation,
general economic and competitive factors and the company's ability to implement
and finance its acquisition and growth strategy. These factors are discussed
in the company's Annual Report on Form 10-K for the year ended December 31,
1996 and Quarterly Report on Form 10-Q for the period ended March 31, 1997.
###
2