Acme Electric Corporation and Key Components LLC Announce Extension of Merger Agreement.

Business & High Tech Editors

EAST AURORA, N.Y. & TARRYTOWN, N.Y.--(BUSINESS WIRE)--Oct. 9, 2000

Acme Electric Corporation (Nasdaq: ACEE) and Key Components, LLC (CUSIP No. 9859Z) announced today that Acme has called a special meeting of its shareholders to vote on the previously announced merger with Key Components. The special meeting will be held on November 16, 2000 and shareholders of record on October 6, 2000 will be entitled to vote at the meeting. At the same time, Acme and Key Components announced that they have extended the termination date of their merger agreement to November 30, 2000 to allow adequate time for the solicitation of proxies.

Acme also announced that Ernst & Young has delivered its updated opinion that the $9.00 per share merger price is fair to Acme's shareholders from a financial point of view. As previously announced, Acme had requested Ernst & Young to update its fairness opinion in light of new sales projections.

It is expected that a proxy statement relating to the merger with Key, including the recommendation of the board of directors of Acme, will be mailed to shareholders within a week.

Founded in 1917, Acme Electric Corporation is a leader in the design and manufacture of power conversion equipment for electronic and electrical systems for industrial, commercial, residential, and military and aerospace applications. Corporate headquarters are in East Aurora, NY, with operations in Cuba, NY, Lumberton, NC, Tempe, AZ, and Monterrey, Mexico.

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, Key Components targets original equipment manufacturer ("OEM") markets where it believes its value-added engineering and manufacturing capabilities, along with its timely delivery, reliability, and customer service, enable it to differentiate itself from its competitors and enhance profitability.

Key Components is an affiliate of Kelso & Co. of New York, New York and Millbrook Capital Management, Inc. of Millbrook, New York, both investment firms 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 Acme Electric Corporation and Key Components, LLC to differ materially from those matters expressed in or implied by such forward-looking statements.