Harbour Group Acquires Pearlman Corporation

ST. LOUIS, Nov. 1, 2006 -- Harbour Group has acquired Pearlman Corporation, the parent company of Pearl Abrasive Co. and Keystone Tools, Sam Fox, Harbour Group's Chairman and Chief Executive Officer, announced today. Pearlman, based in Commerce, Calif., is a leading developer and supplier of branded, high-quality abrasives, diamond cutting products, and related products.

Pearlman was founded in 1968. The company's products include a broad line of diamond cutting wheels, abrasives, chemicals, power tools and related products for stone fabricators, tile installers and construction contractors in both the residential and commercial construction markets. Pearlman sells its products through a network of independent distributors as well as through its own proprietary and branded distribution channel, Keystone Tools. Keystone is the fastest growing, direct to end-user, supplier of stone cutting and fabrication equipment in North America. Keystone markets both Pearl Abrasive and other branded products to end-users in the stone market through a distribution and sales network incorporating mobile trucks, catalogs and retail stores.

Mr. Fox commented, "Pearlman is a really great business in a sector we understand well. The Pearl Abrasive brand is synonymous with quality, service and innovation, and as a result, Pearlman enjoys leading market shares in its served markets and a devoted and diverse customer base. We believe there are opportunities for further penetration of its existing markets, entry into new markets and geographies, and continued development and introduction of new products. In addition, Pearlman's markets are both large and highly fragmented, and we will aggressively pursue complementary acquisitions."

Mr. Fox also emphasized that Harbour Group's acquisition will allow the company to continue to pursue its growth strategy. He commented, "Zack and his team created significant value through the innovative development of the highest quality products, a focus on superior customer service and the development of the Keystone distribution model. We intend to dedicate all our resources to continuing that legacy, and in particular, to extending the Keystone footprint."

Zack Pearlman, President of Pearlman, commented, "Our team has done an excellent job positioning both the Pearl Abrasive and Keystone businesses as leaders in the abrasives and diamond cutting tools market. Harbour Group has a keen understanding of our industry and we're fortunate to have them as a partner. Their long history of successfully growing companies like Pearlman will be a huge asset to us as we pursue our strategy."

Harbour Group is a privately owned company based in St. Louis. Harbour Group and its operating companies are engaged in the manufacture and distribution of a wide variety of consumer and industrial products, including entertainment products, automotive enthusiast products, lubricating systems and equipment, auxiliary plastic processing equipment, and heat exchange equipment.