BlackHawk Industrial Distribution, Inc. is a new entity formed by Bill Scheller, former CEO of ORS-Nasco and Brazos Private Equity Partners. BlackHawk Industrial is implementing a very active buy-and-build strategy in the highly fragmented, $400 billion industrial distribution market. BlackHawk believes that the industrial distribution industry has over 100,000 independent distributors with the majority of these companies being small, regionally focused, family-owned, or owner-operated businesses. Blackhawk Industrial believes that these smaller distributors have very strong customer relationships in their local markets and out compete the “big boys”. These successful small regional companies typically lack scale, resources, and capital to grow their businesses. To learn more about BlackHawk Industrial visit www.blackhawkid.com

Bill Scheller is the CEO of BlackHawk Industrial. Bill has almost 30 years of experience in the distribution sector. While serving as President and CEO of ORS Nasco, Bill and his management team partnered with Brazos to successfully enhance the business for customers, vendors and the employees. Bill assembled a highly capable senior leadership team, invested significant resources to improve the sales function, and enhanced ORS-Nasco’s fulfillment rates and product offerings through inventory enhancement. Prior to ORS-Nasco, Bill held senior leadership roles at Pillsbury and Patterson Companies.

Bill will assume the role of Chief Executive Officer of Duncan. Bill will become very active in the day to day operation of the business. He will add bandwidth to the management team so that Cheryl Lawson can continue to focus on sales growth.

Brazos Private Equity Partners is a middle-market private equity group based in Dallas, TX who partners with individuals, such as Bill Scheller, to invest in companies like BlackHawk and Duncan. Brazos supports the management team’s efforts to continue to grow and be successful.

BlackHawk is acquiring Duncan Industrial because they are excited about what they believe is the foundation within the business:

• Strong and proven business model
• Strong IT platform and management team
• A long history of intimacy with customers and vendors
• High growth potential
• Leading position in the fragmented industrial market

Duncan Industrial has demonstrated strong performance since it was founded in 1948 and will continue to run the business in the same fashion going forward. Our commitment to our strategic plan, our customers, our suppliers, our employees, and our business model will continue to be the foundation from which we grow our business.

The acquisition of Duncan Industrial by BlackHawk will mean an acceleration of the strategic plan developed by the management team. The focus will be to rapidly grow the business into new market segments, new product categories and new geographical locations.

We believe that the acquisition of Duncan Industrial will be the first of many future acquisitions by BlackHawk. BlackHawk’s focus will be:

• acquisition of other regional distributors that will increase our scale and expand our footprint;
• the realization of meaningful synergies with future add-on acquisitions including better purchasing, expansion in key resources, adding additional facilities, and improvement of operating efficiencies and working capital management;
• addition of talented corporate resources;
• the opportunity to leverage strong customer relationships and product expertise to expand revenue with existing customers.

The acquisition of Duncan Industrial by BlackHawk Industrial means that the successful strategic plan developed by the senior management team of BlackHawk and Duncan will be adopted more rapidly. Key initiatives will be financed more quickly which will lead to additional value through enhanced resources for all customers and suppliers that Duncan trades with.

The company will be owned by Bill Scheller, Cheryl Lawson, who together will have a significant stake in the company, and by Brazos Private Equity Partners. Nothing changes at Duncan except the Ragland family has been able to successfully transition their ownership of the company.

The deal was closed on Friday October 1, 2010.

The existing Duncan Management Team will continue to run the day-to-day operations of the business led by Chief Executive Officer Bill Scheller.

Cheryl strongly supports this acquisition. Cheryl has actually invested along with Bill and Brazos to buy the company from the Ragland family. Cheryl, for the first time, will be a shareholder in the business. Cheryl’s strengths are the ability to attract new customers and to grow the sales line. Bill’s strengths are improving the day to day operational side of the business. As we aggressively grow this business, Cheryl and Bill will focus on these two respective areas.

Duncan Industrial will continue to be a privately held business based in Oklahoma. We will now have access to additional resources – financial and other – which will allow us to implement BlackHawk’s buy-and-build approach. Buy-and-build means that we will accelerate the growth trajectory of the business through existing organic efforts as well as future acquisitions. We will remain an industrial distributor focused on what is really important, our customers needs. We will be part of a fun and growing business. We want all of you to be a part of what we are creating. We recognize that this is change and change creates uncertainty. However, we are confident that we will demonstrate our commitment to you and all of the stakeholders in the business.

BlackHawk and Duncan will continue to add value, as it does today, as the preeminent independent industrial distributor. Duncan will continue to focus on our commitment to add exceptional value with each customer we service and with each vendor we trade with. But, we will not take our past successes for granted. We know we must listen, adapt, and grow to further add value as the distributor of choice.

No. The day to day activities of the business will remain the same in the near term. But with the additional investment by BlackHawk into the business, our customers and suppliers will continue to see many positive enhancements implemented throughout the business. Customers and suppliers will see benefit from the addition of high quality sales & marketing professionals who will complement the existing business. We will focus on new customer verticals, new product categories, new locations, additional technological advancements in our distribution centers and customer interface, as well as the expansion of our catalog and Web offering.

Yes, this is simply an equity ownership change. Our employees are what makes Duncan Industrial the company it is today – great people who have great passion for the business. The day to day operations of the business will remain as they are presently and those you know will continue to work with you throughout the various functional areas of the company.

As a result of the acquisition, nothing changes at Duncan. Because Duncan is the first acquisition by BlackHawk, the current banking, health and welfare benefits, 401k plans all stay in place. We will examine the programs and build on them as we gain size and scale. All of the Duncan Industrial policies & procedures as outlined in the Employee Handbook remain exactly as they were pre to the ownership change.

Feel free to contact any member of the Management Team of Duncan Industrial or please contact Bill Scheller directly at:

The Duncan headquarters will remain in Oklahoma City, OK. BlackHawk is also an Oklahoma company and is based in Tulsa, Ok. Bill Scheller resides just outside Tulsa but will be spending a significant amount of time in the Oklahoma City location providing day to day direction to the business. In the near future, BlackHawk Industrial (which is just a small office) will move into the Duncan Industrial location in Tulsa. This will allow Bill to have an office closer to his home.

Bill is a vey open and transparent leader. You will find that he wants you to be very involved in the excitement and fun in growing this business. Bill develops a very high degree of “esprit de corps” to foster accountability and continuous improvement. Bill loves to teach and has an intensive operational and analytical focus to measure and manage key performance indicators. He then routinely establishes goals and develops processes that allow the team to achieve their goals. He likes to have fun and rewards employees for their exceptional efforts.

It is likely that we will add additional resources to the leadership team at BlackHawk and Duncan. In order to achieve the growth potential that we believe is in front of us, we will be investing to grow the business, we will be adding “bandwidth” in additional leaders in key areas. This growth will allow us to have new leaders as we add key roles to help shape the business. In addition, this growth provides new advancement opportunities to all the existing employees as well.

The answer to that is simple… We ask that you focus on our customers and their needs. We have a right to exist as a distributor in the marketplace because of the value we provide our customers. Our vendors have hired us as a direct result of Duncan’s deep customer relationships. It is simple; people still do business with people they like and trust. We ask that you continue to listen to the needs of our customers and further develop these deep relationships… it is all about customer intimacy!