Affiliate of Apollo Management to Acquire MTL for $250 Million; Company to Pursue Growth Prospects as Private Entity

Business Wire, Feb 11, 1998

PLANT CITY, Fla.--(BUSINESS WIRE)--Feb. 11. 1998--MTL Inc. (NASDAQ:MTLI) announced that it has entered into a definitive agreement with Sombrero Acquisition Corp., an affiliate of Apollo Management L.P., pursuant to which Sombrero will merge with the company.

According to the terms of the merger agreement, shareholders will receive $40 per share in cash. At the option of Apollo, up to $1.60 of the purchase price can be in the form of common stock of the company. The total transaction value is approximately $250 million, including outstanding stock options and approximately $54 million of net debt. The transaction will be subject to customary conditions, including a vote of MTL Inc. shareholders. Sombrero has signed agreements with certain existing MTL shareholders representing in excess of 25 percent of the outstanding common stock to vote for the transaction.

MTL will be funded by an equity investment of approximately $70 million from Apollo, MTL's founder Elton "Buzz" Babbitt, and other members of the existing MTL management team. Approximately $200 million of senior subordinated and bank term debt will be used to finance the acquisition. In addition, a $100 million revolving credit facility will be available to the company for working capital and acquisition purposes. Commitments for such financing have been obtained from Credit Suisse First Boston and Bankers Trust.

Following the merger transaction, members of MTL's senior management team will continue to serve in their respective duties; including Elton "Buzz" Babbitt, MTL's chairman, Charles J. O'Brien, Jr., MTL's president and chief executive officer, Richard J. Brandewie, senior vice president and chief financial officer, and Marvin E. Sexton, president of MTL's primary operating subsidiary Montgomery Tank Lines Inc.

In announcing the transaction, Charles J. O'Brien stated: "The entire MTL management team is extremely pleased to establish a strong relationship with such a recognized strategic partner like Apollo. The combined industry-leading resources of both MTL and Apollo really afford us an opportunity to enhance our growth within the tank truck industry. At the same time, it allows us to truly maximize our shareholders' value in a manner more in line with our consistently profitable record over the past 15 quarters as a publicly-held company."

Joshua Harris, partner with Apollo, said, "We've carefully looked at the tank truck industry and we are enthusiastic about the industry and our new partner. We are impressed with MTL's experienced management team and the company's significant growth opportunities."

Apollo Management L.P. is a private investment partnership that has invested in excess of $7 billion since 1990 in a variety of corporate and real estate transactions.

MTL is a designated core carrier with one of the world's largest stainless steel tank trailer fleets. MTL, a Chemical Manufacturers Association Responsible Care(R) Partner, operates with approximately 1,900 tractors and 4,000 tank trailers through its three operating subsidiaries: Montgomery Tank Lines Inc., Quality Carriers Inc., and Levy Transport Ltd. The company, headquartered in Plant City, serves a wide variety of manufacturing and industrial customers including a large number of fortune 500 chemical companies.

This release is available on the KCSA Worldwide website at www.kcsa.com.

CONTACT: MTL Inc., Plant City

Dan Furth, 800/282-2031

or

Apollo Management LP, New York

Joshua Harris, 212/261-4032

or

KCSA, New York

Joseph A. Mansi/Adam I. Friedman

212/682-6300 ext. 205/215