H.I.G. Capital to Acquire DESA International in Transaction Valued at $200 Million

12/12/2002

BOWLING GREEN, KY — DESA Holdings Corporation and DESA International, Inc. (together, "DESA" or the “Company”) of Bowling Green, Kentucky, a leading manufacturer and marketer of zone heating and specialty power tool products, today announced that the previously announced sale process for substantially all of the Company’s operating assets has been successfully completed. The winning bidder is H.I.G. Capital, a Miami, Florida-based private equity firm, which has signed a definitive agreement to acquire substantially all of the operating assets of the business in a transaction valued at approximately $200 million. Completion of the transaction is expected to occur later this month.

As announced last June, DESA Holdings and DESA International filed voluntary petitions for reorganization under chapter 11 of the Bankruptcy Code on June 10, 2002. At that time, DESA indicated that as part of the reorganization, the Company would pursue a sale process involving substantially all of its operating assets. The goal of the sale process was to sell the assets and operations of the Company to new ownership that could continue to provide DESA products to the Company’s customers. H.I.G. Capital has confirmed that under its ownership, the Company will continue to provide DESA’s existing product lines to customers. The new company will be known as DESA International but will be under new ownership.

W. Michael Clevy, President and Chief Executive Officer of DESA International, Inc., said: "This is a great outcome that will enable us to accomplish our objectives. When the sales process is completed, the new DESA will have a clean balance sheet and be well-positioned, financially, operationally and competitively, to make a fresh start. I look forward to the beginning of an exciting new era, marked by increased sales, profitability and growth.”

Tony Tamer, a co-founder and Managing Partner of H.I.G. Capital, said: "We are very pleased to add DESA International to our portfolio of strong, entrepreneurial, growthdriven companies. Under the leadership of Mike Clevy and his management team, DESA has retained its value through a challenging time and the new DESA will be able to effectively service its customers through the normal distribution channels with support from existing vendors. We share Mike and his team’s excitement about the future and look forward to working with him and his colleagues to build a new DESA for its customers, business partners and employees alike.”

DESA International’s financial advisors with regard to the sale process and transaction was Berenson Minella & Company, of New York.

DESA International, Inc. manufactures and markets high-quality zone heating products, hearth products, security lighting and specialty tools for use in homes and commercial buildings. Its products carry the Vanguard, Comfort Glow, Reddy Heaters, Remington, Master and Heath/Zenith brand names. DESA sells its products through multiple consumer and commercial channels of distribution including home centers, mass merchants, hardware cooperatives, specialty heating distributors, construction and industrial equipment dealers, farm supply outlets and natural gas utilities.

With offices in Miami, San Francisco, Boston and Atlanta, H.I.G. currently manages over $1 billion of equity capital. It is one of the most active private equity firms in the U.S. investing in middle market companies. Since its inception in 1993, H.I.G. has acquired more than forty companies with combined revenues exceeding $4 billion. H.I.G. generally focuses on middle-market transactions where it is able use the operating expertise of its principals to improve the performance of its portfolio companies. H.I.G. Capital is the former owner of the Heath/Zenith Company, which it sold to DESA in 1998.