The Sterling Group

HOUSTON (May 25, 2005) - The Sterling Group, L.P., a Houston-based private equity firm focused on acquiring North American middle-market manufacturing, industrial service and distribution companies, today announced the final close of Sterling Group Partners II, L.P. ("Fund II"), with aggregate capital commitments of $470 million, including $20 million from the Principals of Sterling. Additionally, The Sterling Group announced the addition of two new members to the Sterling team. Gary Rosenthal, a former Principal with Sterling from 1989 to 1990, has rejoined as a Principal, and Kelly Boots has been named Chief Financial Officer.

The Sterling Group founded more than 23 years ago, is one of the oldest private equity firms in the United States. Sterling's six Partners - Chairman Frank Hevrdejs, Billy Oehmig, Hunter Nelson, John Hawkins, Kevin Garland and Gary Rosenthal - have over a combined 80 years of experience with The Sterling Group.

The firm will use Fund II to continue to execute its strategy of partnering with management teams to drive strategic, operational and financial improvements in its portfolio companies. Historically, this has often occurred in acquisitions of spin-outs of non-core divisions of large corporations and family-owned businesses as well as buy-and-build strategies in fragmented industries.

"Our success in raising Fund II is strong validation of our investment philosophy - hands-on involvement in our portfolio companies and a focus on difficult transactions where we can make a real difference," said Sterling Co-Founder and Principal Frank Hevrdejs. "We are looking forward to working with our new investors, and we appreciate their confidence in us. Given the larger size of Fund II, we will be able to demonstrate a greater certainty of closing to sellers of businesses. The additions of Gary and Kelly will enhance our firm's operational capabilities in working with investors, portfolio companies and sellers of businesses."

Limited partners in Fund II include a diverse group of pension plans, fund-of-funds, university endowments, financial institutions, foundations and individuals including: AXA Private Equity, BNP Paribas, BOKF Private Equity, CSFB, Danske Private Equity, Hoegh Capital Partners, INVESCO Private Capital, The Meadows Foundation, Montreal Transit Workers, RCP Advisors, Standard Life Investments, Swiss Re Private Equity Partners and Texas Tech University. Lazard Freres acted as Sterling's exclusive global placement agent for Fund II, and Paul, Weiss, Rifkind, Wharton and Garrison LLP acted as legal counsel.

"We are very pleased to serve as a significant investor of a firm with such an excellent track record and an equally bright future as Sterling," said Barry Miller of AXA Private Equity.

About The Sterling Group, L.P.
The Sterling Group, founded in 1982 by the late Gordon Cain and Frank Hevrdejs, is a Houston-based private equity firm focused on acquiring middle-market manufacturing, industrial services and distribution companies between $100 million and $500 million in enterprise value. In total, the firm has made 29 platform and numerous add-on acquisitions totaling over $7 billion in transaction value. For more information, visit www.sterling-group.com.