Collins Industries Enters Into Merger Agreement With Steel Partners

HUTCHINSON, Kan., Sept. 26  /PRNewswire-FirstCall/ -- Collins Industries, Inc. (OTC:CNSI) announced today that it had entered into a definitive merger agreement with Steel Partners II, L.P., a private investment partnership based in New York.  Steel Partners is purchasing Collins in affiliation with American Industrial Partners, an operationally focused private equity firm. Under the terms of the agreement, Collins shareholders will receive $12.50 in cash for each share of Collins common stock they hold.  The total value of the transaction, including assumed debt and expenses, is approximately $110 million.

The Board of Directors of Collins has unanimously approved the merger agreement and is recommending that Collins' shareholders approve the merger.

Donald Lynn Collins, President and Chief Executive Officer, said, "After careful analysis, the Board of Directors has endorsed this transaction as being in the best interests of our shareholders.  The price of $12.50 per share represents a premium of 31.6% to Collins' closing share price on September 26, 2006 and a 68.9% premium to the closing share price on June 28, 2006, the day before we announced that we were exploring a possible sale of the Company."

The transaction is expected to be completed in the fourth calendar quarter of 2006.  Completion of the transaction is subject to customary closing conditions, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the receipt of shareholder approval.  Certain shareholders representing approximately 29.7% of the outstanding shares of Collins common stock have entered into agreements to vote their shares in favor of the merger.  Completion of the transaction is not subject to a financing contingency.  A copy of the merger agreement will be posted in the Investor Relations section of the Company's website at http://www.collinsind.com/.

George K. Baum Advisors LLC is acting as financial advisor for Collins Industries, Inc.

About Collins Industries, Inc.

Collins Industries, Inc. is a leading manufacturer of ambulances (including medical attack vehicles, rescue vehicles and fire emergency vehicles), North America's largest producer of Type "A" small school buses, the nation's second largest manufacturer of terminal trucks and a leader in the road construction and industrial sweeper markets.  Since 1971, the Company has grown to approximately 1000 employees in six plants comprising over one million combined square feet of manufacturing space.  The Company sells its products throughout the United States and abroad.

Forward-Looking Statements

This press release contains historical and forward-looking information. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The Company believes the assumptions underlying these forward looking statements are reasonable; however, any of the assumptions could be inaccurate, and therefore, actual results may differ materially from those projected in the forward-looking statements due to certain risks and uncertainties, including, but not limited to, the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; the outcome of any legal proceedings that may be instituted against Collins and others following announcement of the proposal or the merger agreement; the inability to complete the merger due to the failure to obtain shareholder approval or the failure to satisfy other conditions to the completion of the merger, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976; and other risks as indicated in the Company's prior filings with the Securities and Exchange Commission.  The Company undertakes no obligations to publicly release any revisions to any forward-looking statements contained herein to reflect events or circumstances occurring after the date released or to reflect the occurrence of unanticipated events.

Additional Information

In connection with the proposed merger, Collins will prepare a proxy statement that will be mailed to its shareholders.  INVESTORS AND SECURITY HOLDERS ARE ADVISED TO READ THE PROXY STATEMENT WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND THE PARTIES TO THE MERGER.  Investors and security holders may obtain a free copy of the proxy statement (when available) from the Investor Relations section of the Company's website at http://www.collinsind.com/.

Collins and its directors, executive officers and other members of its management and employees may be deemed to be participants in the solicitation of proxies from its shareholders in connection with the proposed merger. Information concerning the interests of Collins' participants in the solicitation, which may be different than those of Collins' shareholders generally, will be set forth in the proxy statement relating to the merger when it becomes available. 

DATASOURCE: Collins Industries, Inc.



CONTACT:  Cletus Glasener, Chief Financial Officer and Vice President of

Finance, Collins Industries, Inc., [phone]; or Kim Marvin, Partner,

American Industrial Partners, [phone] Ext. 209



Web site:  http://www.collinsind.com/ 

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