ALG Completes Acquisition of Certain Assets of Clean Earth

For Immediate Release

For: Alamo Group Inc.
Contact: Robert H. George
Vice President

Financial Dynamics
Eric Boyriven/Alex Scott


SEGUIN, Texas, May 24, 2006 -- Alamo Group Inc. (NYSE: ALG) announced today it has completed the previously announced purchase of the vacuum truck and sweeper lines of Clean Earth Environmental Group, LLC and Clean Earth Kentucky, LLC, collectively referred to as Clean Earth. This includes the product lines, inventory and certain other assets that relate to this business. The purchase price for the assets was $8.875 million and sales for the acquired product lines were approximately $15 million in 2005.

The vacuum truck products include VacAll and Clean Earth, and will be organized into a new subsidiary called VacAll Industries, Inc. They will continue to be based in Birmingham, Alabama, with Jack Fernandes serving as Vice President of Sales and Marketing. However, the production for these lines will be moved to Alamo’s Gradall subsidiary in New Philadelphia, Ohio.

The SHARC street sweeper business, which is currently in Lexington, Kentucky, will be consolidated into Alamo’s Schwarze street sweeper operation in Huntsville, Alabama.

Ron Robinson, Alamo Group's President and CEO commented, "Vacuum trucks are a product line that we have wanted to add to our Industrial Division for some time. They are a good fit with our existing product offering, which already includes mowing equipment, street sweepers and excavators, all of which are primarily sold to governmental entities and related contractors. The addition of these product lines should further strengthen our ties to dealers and customers in this segment."

"We do not expect this acquisition to be accretive to our results in 2006 as we will be focusing on relocating manufacturing and bringing production levels back up to where they were before the Chapter 11 proceedings of Clean Earth. However, we feel confident that this business will be a good contributor in 2007 and beyond and a growing part of Alamo’s business as we provide the resources that it has needed to expand and grow."

Mike Haberman, President of Gradall Industries, Inc. added "This product line fits well with our manufacturing capabilities and we are excited about the potential this brings to Gradall and the overall Alamo Group."

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 and truck mounted mowing and other vegetation maintenance equipment, excavators, street sweepers, snowblowers, pothole patchers, agricultural implements and related after market parts and services. The Company, founded in 1969, has over 2,290 employees and operates fourteen plants in North America, Europe and Australia as of March 31, 2006. 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.