Hillman Agrees To Acquire H. Paulin & Co., Limited

              Hillman Agrees To Acquire H. Paulin & Co., Limited

PR Newswire

CINCINNATI and TORONTO, Dec. 18, 2012

CINCINNATI and TORONTO, Dec.18, 2012 /PRNewswire/ --The Hillman Companies
Inc. (Amex: HLM.Pr) ("Hillman") and H. Paulin & Co., Limited (TSX: PAP.A)
("Paulin") are pleased to announce that they have entered into a definitive
agreement (the "Arrangement Agreement") which provides for the acquisition by
Hillman, pursuant to a plan of arrangement under the Business Corporations Act
(Ontario) (the "Arrangement"), of all the issued and outstanding Class A
common shares (the "Shares") of Paulin for C$27.60 per share (the
"Consideration"). The purchase price, payable in cash, represents a total
enterprise value of approximately C$103 million.

The Consideration represents a premium of approximately 116% to the 20-day
volume weighted average price of the Shares on the TSX as of December 17,
2012. The closing price of the Shares on the TSX on December 17, 2012 was
$13.20.

Upon closing, Richard Paulin, President of Paulin, will continue as President
of H. Paulin, a division of Hillman Canada. Mr. Paulin will work with the
existing management teams of Paulin and Hillman to integrate the combined
Canadian operations.

Max W. ("Mick") Hillman, Jr., Chief Executive Officer of Hillman, said "We
began our operations in Canada in 2002, when we opened our Mississauga
facility. We have greatly admired the strong distribution system, high quality
products, and excellent customer relationships that Paulin has developed.
Under Richard's leadership, we look forward to implementing the best practices
of Paulin and Hillman to better serve customers and to grow the combined
operations throughout Canada."

"We are excited to become an integral part of the Hillman organization," said
Mr. Paulin. "This acquisition joins two great and complementary industry
leaders with over 140 years of combined fastener knowledge and innovation that
will allow us to take our customer service to new heights."

The transaction is expected to close in the first quarter of 2013, subject to
certain customary conditions, including a material adverse change at either
Paulin or Hillman, and regulatory approvals, including court approval, and
approval of the "majority of the minority" of shareholders. Paulin's
controlling shareholders have agreed to support the transaction.

Transaction Details

Paulin's Board of Directors, after consultation with its advisors, and on the
recommendation of the Special Committee of Paulin's Board of Directors, has
determined that the Consideration is fair to Paulin's shareholders and that
the Arrangement is in the best interests of Paulin and recommends that
shareholders vote in favour of the Arrangement. The Special Committee consists
solely of directors who are independent of management and the controlling
shareholders.

Ernst & Young LLP has provided a fairness opinion to the Special Committee and
the Board of Directors of Paulin that the Consideration is fair, from a
financial point of view, to shareholders of Paulin. Ernst & Young LLP's
fairness opinion will be included in the Information Circular (as defined
below).

The Arrangement Agreement provides for, among other things, a non-solicitation
covenant on the part of Paulin, the right in favour of Hillman to match any
superior proposal and the termination fee of $4,139,760 payable to Hillman in
certain circumstances including if Paulin accepts a superior proposal.

The terms and conditions of the Arrangement will be summarized in Paulin's
management information and proxy circular (the "Information Circular"), which
will be filed and mailed to Paulin's shareholders in  January 2013.

The Arrangement Agreement will be available on SEDAR at www.sedar.com.

Advisors and Legal Counsel

Barclays is acting as financial advisor to Hillman in connection with the
transaction and is providing committed debt financing. Stikeman Elliot LLP and
Paul, Weiss, Rifkind, Wharton & Garrison LLP are acting as legal counsel to
Hillman. Goodmans LLP is acting as legal counsel to Paulin. Ernst & Young LLP
is acting as financial advisor and McCarthy Tetrault LLP is acting as legal
counsel to the Special Committee of the Board of Directors of Paulin.

About Paulin

Headquartered in Toronto, Canada, Paulin was founded in 1920 and is a leading
Canadian distributor and manufacturer of fasteners, fluid system products,
automotive parts and retail hardware components. Paulin's distribution
facilities are located across Canada in Vancouver, Edmonton, Winnipeg,
Toronto, Montreal and Moncton, as well as in Flint, Michigan and Cleveland,
Ohio. Paulin's four manufacturing facilities are located in Ontario, Canada.
The Company's customers include retail hardware, industrial and automotive
(both Original Equipment Manufacturers and aftermarket). Annual revenues of
Paulin for 2011 were approximately C$139 million.

For more information on Paulin visit www.hpaulin.com or call Investor
Relations at (416) 694-3360, ext. 135.

About Hillman

Founded in 1964 and headquartered in Cincinnati, Ohio, Hillman is a leading
value-added distributor of approximately 80,000 SKUs, consisting of fasteners,
key duplication systems, engraved tags and related hardware items to over
20,000 retail customers in the U.S., Canada, Mexico, South America and
Australia, including home improvement centers, mass merchants, national and
regional hardware stores, pet supply stores and other retailers. Hillman
provides a comprehensive solution to its retail customers for managing SKU
intensive, complex home improvement categories. Hillman also offers its
customers additional services, such as inventory management and in-store
merchandising services.

In May 2010, Oak Hill Capital Partners and Hillman's management team formed a
partnership to acquire Hillman. Oak Hill Capital Partners is a private equity
firm with more than $8 billion of committed capital from leading
entrepreneurs, endowments, foundations, corporations, pension funds and global
financial institutions. For more information about Oak Hill Capital Partners,
visit www.oakhillcapital.com.

For more information on Hillman, please visit http://hillmangroup.com or call
Investor Relations at (513) 851-4900, ext. 2084.

SOURCE The Hillman Companies, Inc.

Website: http://www.hillmangroup.com
 
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