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Neenah Paper Agrees to Buy FiberMark's German Operations

Aug. 09, 2006 (Press Release) - Neenah Paper, Inc. today announced it had signed a definitive agreement to purchase FiberMark's German subsidiaries for $218 million. These operations, consisting of three manufacturing sites, produce a diverse range of products, including auto filter media, tape and abrasive backings, and other specialized printing and coating substrates. In 2005, FiberMark Germany's operating income was approximately $29 million on net sales of $221 million.

"This transaction clearly fits our strategy of transforming into a company focused on premium fine papers and technical products. The acquisition gives us scale in technical products, a global footprint and presence more aligned with our customers, and an expanded technological platform that we can leverage to deliver higher value products and expand into new markets," said Sean Erwin, Chief Executive Officer and Chairman of the Board. "FiberMark's German operations have a long history of success. By joining with Neenah Paper there are clearly opportunities to create value between the two companies and to become the global supplier of choice for customers in our markets."

Mr. Erwin indicated no significant restructuring or integration charges were anticipated and that the transaction is expected to deliver attractive returns on invested capital for shareholders and be immediately accretive to earnings. Financing is expected to be through a combination of available cash, including $140 million of proceeds from the sale of timberlands received in June, and debt from existing credit facilities or other sources.

The company indicated the transaction is expected to close early in the fourth quarter and is subject to customary closing conditions, including competition clearance in certain jurisdictions.

SOURCE: Neenah Paper, Inc.




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