MINNEAPOLIS – September 20, 1999 – Eagle Pacific Industries, Inc. (Nasdaq: "EPII") today announced that it has completed the previously announced acquisition of Pacific Western Extruded Plastics Company (PW Pipe) from Mitsubishi Chemical America, Inc. and Mitsubishi Plastics, Inc.

Eagle paid approximately $80 million for PW Pipe, subject to certain balance sheet adjustments to be determined within the next 90 days. Eagle financed the transaction as part of a complete refinancing of the Company involving a combination of senior secured debt, provided by a bank syndicate led by Fleet Capital Corporation, and mezzanine debt consisting of senior subordinated notes with warrants issued to a group led by Chase Capital Partners and consisting of affiliates of Massachusetts Mutual Life Insurance Company, former preferred stockholders of the Company. Donaldson, Lufkin & Jenrette acted as placement agent for Eagle in the transaction.

With the acquisition of PW Pipe, Eagle is now the largest producer of polyvinyl chloride (PVC) pipe in the western United States, the second largest manufacturer of PVC pipe in the United States and the largest merchant buyer of PVC resin in the United States. In the twelve months ended August 31, 1999, the combined businesses sold nearly 641 million pounds of plastic pipe to customers in 41 states and generated combined revenues of approximately $280 million and earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately $34.9 million.

Eagle operates three manufacturing facilities located in Hastings, Nebraska, Hillsboro, Oregon and West Jordan, Utah. PW Pipe operates six manufacturing facilities located in Tacoma and Sunnyside, Washington, Eugene, Oregon, and Cameron Park, Visalia and Perris, California. The products of the combined companies include plastic pipe and tubing for agricultural and turf irrigation, water wells and municipal water distribution, drainage and sewers, commercial and industrial plumbing, natural gas and water wells, electrical conduit and fiber optic/electronic/telephone lines. Eagle will continue to maintain its corporate headquarters in Minneapolis, Minnesota, but announced the relocation of its operating office from Hastings, Nebraska to Eugene, Oregon and the election of the following officers: James Rash — President; Larry Fleming — Senior Vice President — Sales and Marketing; Jack Cobb — Senior Vice President— Operations; Roger Robb — Chief Financial Officer; Keith Steinbruck — Vice President — Technical Director; and Neil Chinn — Vice President — Human Resources. Harry Spell, Bruce Richard and William Spell will continue to serve as Chairman, Vice-Chairman and Chief Executive Officer, respectively, of the Company.

William Spell, Chief Executive Officer of Eagle, commented, "The acquisition of PW Pipe makes Eagle the market leader in plastic pipe in the western United States and the second largest plastic pipe producer in the United States. In the last five years the two companies have spent a total of approximately $45 million in capital improvements to become low-cost efficient producers and both are currently reaping the benefits of those expenditures. The addition of the PW Pipe management group will add significant experience and depth to our management team. The combination of these two strong businesses will position the company for continued growth and profitability in the future."

"We will be focusing on the integration of these two great businesses over the next several months. We will implement the best practices of each company and our objective is to obtain the synergies from operating these businesses as a single efficient, low cost producer focused on customer service and satisfaction." Spell continued, "Our goal in assimilating the two businesses is to make any changes transparent and seamless to our customers."

In connection with the refinancing of the Company, Eagle redeemed all $10 million of its outstanding 8% Convertible Preferred Stock from affiliates of Massachusetts Mutual Insurance Company. Those shares would have been convertible into 2,347,418 shares of Eagle common stock. In exchange, Eagle issued $10 million of senior subordinated notes with warrants to purchase 597,090 shares of Eagle common stock.

Separately, Eagle announced the retirement of Larry Schnase from the Board of Directors. Mr. Schnase was a founder of Eagle Plastics, Inc. the predecessor of Eagle. Mr. Schnase retired as President of Eagle in 1996 and remained on the Board until his resignation on September 2, 1999. Concurrent with Mr. Schnase’s retirement, Eagle purchased all of Mr. Schnase’s shares of Eagle common stock, and all unexercised vested options to acquire Eagle common stock were terminated. As a result, approximately 604,125 shares of common stock and options were cancelled.

The purchase of PW Pipe, the redemption of the 8% Convertible Preferred Stock, the equity and options issued to members of the PW Pipe management team, and the acquisition by Eagle of Mr. Schanse’s equity interest in Eagle have dramatically changed the capital structure of Eagle. At the end of the second quarter on June 30, 1999, Eagle had 7,015,222 shares of common stock outstanding, Preferred Stock convertible into 2,366,168 shares of common stock, and options covering 1,687,226 shares of common stock outstanding. As a result, on a fully diluted basis there were 11,068,616 shares outstanding. At that time, Eagle also had approximately $22.4 million of senior secured debt.

After the completion of Eagle’s refinancing and the acquisition of PW Pipe, Eagle has 7,217,597 shares of common stock outstanding, Preferred Stock and warrants covering 1,959,292 shares of common stock, and options covering 1,570,726 shares of common stock outstanding. As a result, on a fully diluted basis there are 10,747,615 shares outstanding. In addition, Eagle also has approximately $76 million of senior secured debt and $32.5 million of senior subordinated notes.

Mr. Spell commented "We initially believed that the company would experience dilution of up to 20% in connection with the acquisition of PW Pipe. We are extremely pleased that the total fully diluted shares outstanding has actually decreased from June 30, 1999 to today by 321,001 shares. As a result of the operating performance of these two businesses and the reduction in fully diluted shares, we believe that this acquisition will be immediately accretive to earnings per share."

The Chief Executive Officer’s statements that: (i) the combination of Eagle Pacific and PW Pipe will position the Company for continued growth and profitability in the future; (ii) its objective is to obtain synergies from operating these businesses as a single efficient, low cost producer focused on customer service and satisfaction; (iii) the Company’s goal in assimilating the two businesses is to make any changes transparent and seamless to its customers; and (iv) Eagle’s acquisition of PW Pipe will be immediately accretive to the Combined Company’s earnings per share are forward-looking statements. There are risks and uncertainties regarding these forward-looking statements that could cause the actual results of Eagle to differ materially from the forward-looking statements. Such risks and uncertainties include, but are not limited to: (i) a decrease in the demand for the combined Company’s products, including a decrease in demand as a result of a decline in the growth of economy; (ii) adverse fluctuations in the cost of the Company’s raw materials; (iii) the failure of the Company to achieve synergies from the combined Company’s operations; (iv) the failure of the Company to retain key management personnel; and (v) unanticipated interruptions and delays in providing products and services to the combined Company’s customers.