KENAN TRANSPORT COMPANY TO BE ACQUIRED BY

                         ADVANTAGE MANAGEMENT GROUP IN A

                               TRANSACTION LED BY

                          STERLING INVESTMENT PARTNERS

                           AND RFE INVESTMENT PARTNERS

Chapel Hill, North Carolina, January 26, 2001 - Kenan Transport Company (NASDAQ:
KTCO) and Advantage Management Group today announced that they have entered into
a merger  agreement  under which Advantage would acquire Kenan for $35 per share
in cash.  Following the transaction,  Kenan and Advantage will be owned by a new
company to be called The Kenan Advantage Group, Inc., which will be the nation's
leading  provider of  transportation  and  logistics  services to the  petroleum
industry.

Kenan's  two largest  shareholders,  which are trusts for the benefit of certain
family members of Kenan's deceased  founder,  Frank H. Kenan,  have entered into
agreements  with  Advantage  to vote  their  shares in favor of the  merger.  In
addition,  certain of Kenan's  directors  and officers  have also agreed to vote
their shares in favor of the merger.  Collectively,  these shareholders own over
55% of Kenan's outstanding shares.

Advantage  contemplates  financing the acquisition  through expanded senior debt
facilities  from CIBC  World  Markets,  additional  subordinated  debt from Rice
Sangalis  Toole and  Wilson  and  Massachusetts  Mutual  Insurance  Company  and
additional equity from Advantage's primary equity sponsors,  Sterling Investment
Partners,  L.P., of Westport,  Connecticut,  and RFE Investment Partners, of New
Canaan,  Connecticut,  as well as Massachusetts  Mutual Life Insurance  Company,
Aetna Life Insurance  Company and Rice Sangalis Toole and Wilson.  Advantage has
obtained commitment letters for all such financing.

The transaction is conditioned upon, among other things, the approval of Kenan's
shareholders and the expiration of certain regulatory  waiting periods.  Subject
to these conditions,  the transaction is expected to close in the second quarter
of this year.

The  transaction  was  approved  by Kenan's  board of  directors  after  careful
consideration of the company's strategic opportunities. The board's approval was
based upon the  unanimous  recommendation  of a special  committee  of the board
formed to consider  strategic  opportunities  involving the sale of the company.
First Union  Securities,  Inc.  served as the  financial  advisor to the special
committee.

Following  the merger,  Lee P.  Shaffer,  Kenan's  current  President  and Chief
Executive  Officer,  will serve as the Chairman of Kenan  Advantage  Group,  and
Dennis A. Nash,  President and Chief Executive Officer of Advantage,  will serve
as the President and Chief Executive  Officer of Kenan Advantage  Group. The new
company will leverage the regional strengths of Kenan in the South and Southeast
with the regional  strengths  of  Advantage  in the Northern  Midwest to provide
enhanced transportation and logistics services to the petroleum, propane gas and
chemical industries.

"This transaction will provide  significant value to our shareholders," said Lee
Shaffer,  Kenan's  President and CEO. "We also believe that the  combination  of
Kenan and Advantage will benefit our respective  customers  through the creation
of an unparalleled network of facilities across the United States."

"We are  extremely  excited  about the expanded  capabilities  and synergies our
complementary  networks and regional  strengths  will provide our  customers and
employees," said Dennis Nash, President and CEO of Advantage.

Doug Newhouse of Sterling Investment Partners commented, "We are looking forward
to  merging  the great  franchises  of Kenan and  Advantage  and  combining  the
talented  management  teams  of  these  two  companies."  Jim  Parsons  from RFE
Investment  Partners added, "We are excited about the many growth  opportunities
available  to this  combined  company  with its  unified  capacity  to serve the
petroleum industry."

About Kenan Transport Company

Kenan is engaged in the  transportation of bulk  commodities,  primarily serving
the petroleum, propane gas and chemical industries.  Kenan's headquarters are in
Chapel Hill, North Carolina.

About Advantage Group

Advantage  Management Group,  Inc. is a leading provider of  transportation  and
logistics services to the petroleum and chemical industries.  Advantage is based
in Canton, Ohio.

Inquiries

Kenan Transport Company

Lee P. Shaffer, Chief Executive Officer                  (919) 967-8221

Advantage Management Group

Carl Young, Chief Financial Officer                      (330) 491-0474

Sterling Investment Partners, L.P.
Douglas L. Newhouse                                      (203) 226-8711

RFE Investment Partners

James A. Parsons                                         (203) 966-2800

Forward-Looking Statements

Certain of the statements in this press release are forward-looking  statements,
which involve risks and  uncertainties.  In particular,  the merger described in
this  press  release  is  subject  to a  number  of  conditions,  including  the
expiration of certain  regulatory waiting periods.  In addition,  although not a
condition to completing the merger, the ability of Advantage Management Group to
consummate the merger described in this press release is subject to full funding
under  the  financing  commitments  obtained  by  it  in  connection  with  this
transaction.