Alamo Group Inc. Enters Into Asset Purchase Agreement to Acquire Valu-Bilt Tractor Parts.

Business Editors

SEGUIN, Texas--(BUSINESS WIRE)--Feb. 20, 2002

Alamo Group Inc. (NYSE: ALG) announced that it entered into an Asset Purchase Agreement on February 19, 2002 with Quality Stores, Inc. ("Quality") to purchase inventory, fixed assets and certain other assets of its Valu-Bilt Tractor Parts division based in Des Moines, Iowa.

Valu-Bilt is well known in its markets for providing new, used and rebuilt tractor parts and other agricultural parts direct to customers through its catalogue offerings and on a wholesale basis to dealers. The purchase price is $7.5 million and is subject to certain contractual adjustments as well as the assumption of certain limited liabilities of Valu-Bilt necessary for the continuation of the business. Valu-Bilt's unaudited sales for the year ending February 2, 2002 were approximately $14.1 million.

On October 20, 2001, an involuntary petition (the "Involuntary Petition") was filed against Quality by Century Funding Ltd., Century Funding Corp., Triton CBO III Limited, Triton CBO IV Limited and Pacholder High Yield Fund, Inc. On November 1, 2001, Quality answered the Involuntary Petition and consented to the entry of an order for relief. On February 21, 2002, Quality will file with the Bankruptcy Court for the Western District of Michigan (the "Bankruptcy Court") the Motion for Orders (A) Scheduling an Auction and Establishing Bidding Procedures for the Sale of the Debtors' Valu-Bilt Assets; (B) Approving the Sale of the Debtors' Valu-Bilt Assets; (C) Authorizing Assumption and Assignment of Certain Unexpired Leases and Executory Contracts And (D) Extending The Time to Assume or Reject the Valu-Bilt Lease of Non-residential Real Property (the "Motion"). On February 28, 2002, Quality will request that the Bankruptcy Court schedule an auction for March 22, 2002 and establish other bidding procedures described in the Motion. If such relief is granted, then Quality will conduct an auction for the Valu-Bilt Tractor Parts on March 22, 2002. On March 25, 2002, Quality will request that the Bankruptcy Court approve the sale to Alamo or another bidder if such bidder submits a higher and better offer at the auction.

Alamo Group is a leader in the design, manufacture, distribution and service of high quality equipment for right-of-way maintenance and agriculture. Our products include tractor-mounted mowing and other vegetation maintenance equipment, street sweepers, agricultural implements and related after market parts and services. The Company, founded in 1969, has over 1,700 employees and operates twelve plants in North America and Europe as of December 2001. The corporate offices of Alamo Group Inc. are located in Seguin, Texas and the headquarters for the Company's European operations are located in Salford Priors, England.

This release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from forecasted results. Among those factors which could cause actual results to differ materially are the following: market demand, competition, weather, seasonality, currency-related issues, and other risk factors listed from time to time in the Company's SEC reports. The Company does not undertake any obligation to update the information contained herein, which speaks only as of this date.