Key Components, LLC Announces Merger Agreement With Acme Electric Corporation

Business Wire, May 30, 2000

Business Editors

TARRYTOWN, N.Y.--(BUSINESS WIRE)--May 30, 2000

Key Components, LLC (the "Company" or "KCI") (CUSIP No. 9859Z), a leading manufacturer of custom-engineered essential componentry, announced today that on May 26, 2000 it entered into a definitive agreement to acquire Acme Electric Corporation (NASDAQ:ACEE) ("ACME"), a leader in the design and manufacture of power conversion equipment, for $9 per share in cash. The transaction is valued at approximately $56.7 million in total, including the assumption of $11 million of debt. The transaction is subject to customary conditions and is expected to close within 60 days.

Founded in 1917, ACME designs and manufactures power conversion equipment for electronic and electrical systems for industrial, commercial, residential, and military and aerospace applications. It's corporate headquarters are located in East Aurora, New York, with operations in Cuba, New York, Lumberton, North Carolina, Tempe, Arizona, and Monterrey, Mexico.

Robert B. Kay, President of Key Components, said, "We are excited to add Acme Electric to our group of companies, especially to our Electrical Components segment. We are committed to maintaining our disciplined strategy of acquiring strong companies with established market positions. This acquisition adds an array of products that will expand KCI's presence within our targeted market niches. Acme further strengthens KCI's financial profile with strong cash flows from its existing product lines and opportunities to create synergies within our existing Electrical Components product lines. Additionally, we are pleased that this acquisition will establish a manufacturing presence for the Company in Mexico. We have been targeting a manufacturing presence in Mexico over the past several quarters and the addition of Acme establishes that presence."

Key Components is a leading manufacturer of custom-engineered essential componentry for application in a diverse array of end-use products. Operating through well known subsidiary companies with established brand names including Marinco, Guest Products, Turner Electric, B.W. Elliott Mfg., Gits Mfg. Co., Hudson Lock and ESP Lock Products, the Company targets original equipment manufacturer ("OEM") markets where the Company believes its value-added engineering and manufacturing capabilities, along with its timely delivery, reliability, and customer service, enable it to differentiate the Company from its competitors and enhance profitability. The Company operates in two business segments, mechanical engineered components and electrical components. The mechanical engineered components products consist primarily of medium security lock products and accessories, flexible shaft and remote valve control components, and turbocharger actuators and related accessories. The Company's electrical components products include specialty electrical components including, but not limited to, weather- and corrosion-resistant wiring devices and battery chargers, and high-voltage utility switches.

Key Components is an affiliate of Millbrook Capital Management, Inc. of Millbrook, New York, an investment firm specializing in acquisitions and management services.

This press release may contain forward-looking statements made in reliance upon the safe harbor of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of assumptions, risks and uncertainties that could cause actual results of the Company to differ materially from those matters expressed in or implied by such forward-looking statements.