Oilgear Co. announced today it has signed a definitive merger agreement to be acquired by Mason Wells Buyout Fund II, Limited Partnership, an affiliate of Mason Wells, a Milwaukee-based private equity firm.

Under the terms of the merger agreement, each outstanding share of Oilgear's common stock will be converted into the right to receive $15.25 in cash. Oilgear currently has more than 2 million shares of common stock outstanding. The stock is traded on the Nasdaq Stock Exchange.

The proposed merger is expected to be completed by the end of 2006 and is subject to approval by Oilgear's shareholders and other customary closing conditions. Oilgear's board of directors unanimously approved the merger agreement, and its directors and executive officers have each indicated they intend to vote in favor of the merger (including five executives who have entered into voting agreements with Mason Wells).

"We believe this transaction will greatly benefit our shareholders, employees and customers," said David Zuege, Oilgear's president and chief executive officer. "The challenges of being a public company of our size have made it increasingly difficult for us to achieve our growth potential in today's very competitive global fluid power marketplace. With the financial strength and resources of the Mason Wells team, the company will be able to expand our range of products and continue to provide creative solutions for our customers' fluid power applications."

Mason Wells was founded in 1982 as a subsidiary of Milwaukee-based Marshall & Ilsley Corp. and became independent in 1998. Mason Wells' offices are located at 411 E. Wisconsin Ave., suite 1280.

Mason Wells manages more than $500 million of capital through Mason Wells Buyout Funds and Mason Wells Venture Fund. Since its founding, Mason Wells has closed more than 60 transactions through the Mason Wells Buyout Funds and its predecessor funds. Mason Wells Buyout Fund II was established in December 2005 as a $300 million fund raised to make control-oriented buyout investments of middle-market companies primarily located in the Midwest.

John Byrnes, executive managing director of Mason Wells, said, "We are very excited about our investment in Oilgear. We believe that the strength of Oilgear's product line, and the knowledge and skill of its employees, combined with our equity capital and other resources, will position the company for long-term success."

Richard Armbrust will serve as president of Oilgear when the acquisition is completed. Armbrust has served the past 15 years as chief executive officer or division president for a variety of companies, including ABB Inc. and Invensys PLC.

Byrnes said, "We are very happy that Rick is joining Oilgear. His track record of leadership, creative thinking and business success in industrial markets will enhance Oilgear's already strong management team."

Zuege said, "I am also very pleased that Mr. Armbrust will be joining as president and will become my successor as chief executive officer, and I am enthused about working with him to provide a smooth leadership transition."

Armbrust said, "Oilgear's management has done a great job of positioning the company for growth in the industry. Oilgear will be the surviving corporation in the merger, and we intend to keep the company's headquarters here in Milwaukee. We look forward to working with the talented group of loyal employees Oilgear has assembled."

A leader in the fluid power industry, Oilgear provides advanced technology in the design and production of unique fluid power components and electronic controls. The company serves customers in the primary metals, machine tool, automobile, petroleum, construction equipment, chemical, plastic, glass, lumber, rubber and food industries.