PalEx Acquires Leading Canadian Pallet Rental Company; Completes Acquisitions With $40 Million in Combined Revenue.

HOUSTON--(BUSINESS WIRE)--Sept. 16, 1998--PalEx Inc. ("PalEx")(Nasdaq:PALX) announced today that it has acquired Superior Management Group ("Superior"), Duckert Pallet Co. Inc. ("Duckert") and Isaacson Lumber Company ("Isaacson"). These businesses generate combined annual revenues of approximately $40.0 million.

Superior is the leading pallet rental company in Canada, with 10 locations in nine cities across Canada. It owns and manages a pallet pool currently consisting of over 1.3 million pallets, which are primarily leased to Canadian Pallet Council ("CPC") members. The CPC is a cooperative that provides access to a pool of distinctive orange pallets which are used by CPC members. Superior owns the largest pool of CPC pallets (approximately 16.3% of the total pool) and provides a total pallet management solution to CPC members by providing or managing the pallet purchase, rental, repair, recycling, recovery and logistics functions for CPC members and other customers.

Vance Maultsby, PalEx's president and chief executive officer, stated: "We are highly enthusiastic about Superior joining the PalEx team. This company possesses a talented management group, a nationwide pallet management network in Canada, and a leading position in the CPC. Of particular importance, Superior has the skilled and experienced management and the systems required to provide a broad range of logistical services for both pallet and container customers. We believe that the addition of Superior is an excellent way for PalEx to enter the Canadian market and to expand our growing logistics service offering."

Duckert has facilities in Black River Falls and Waterloo, Wisconsin and manufactures and recycles pallets. Isaacson is headquartered in Livermore Falls, Maine and primarily manufactures new pallets for customers along the Eastern Seaboard. Maultsby stated: "Duckert provides us with a solid management team that strengthens our position in the Wisconsin market while Isaacson, with its talented management team and state-of-the art operations, provides us with a strong foothold in the important Northeast market." Maultsby also stated: "With the three acquisitions announced today, we have completed 16 acquisitions this year, giving us a current annual revenue run rate of approximately $380 million. Our acquisition program remains very active and our efforts at creating a national network to serve our customers are beginning to pay off."

PalEx is the largest producer of new pallets, the largest pallet recycler and the largest provider of steel drum reconditioning services in North America. PalEx currently operates from 70 facilities in 24 states and seven provinces in Canada.

The statements in this press release regarding management's expectations constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements are subject to risks and uncertainties that could cause the company's results to differ materially from those expectations. Such risks and uncertainties include, among other matters, the ability of PalEx to complete acquisitions and to effectively integrate the operations of acquired companies, as well as general risks related to the industries in which PalEx operates. The company's filings with the Securities Exchange Commission, including its Annual Report and Quarterly Reports and its Registration Statement on Form S-3 (filed on June 30, 1998), discuss some of the important factors that could cause the company's actual results to differ materially from those in such forward-looking statements.