Neenah Paper Agrees to Sell 500,000 Acres

Alpharetta, Georgia, USA, 09 May 2006 -- /PRNewswire/ -- Neenah Paper, Inc. (NYSE:NP) today announced it signed a definitive agreement with Wagner Forest Management Limited to sell approximately 500,000 acres of timberlands in Nova Scotia for $140 million, subject to normal closing conditions. Net after-tax cash proceeds from the transaction are estimated to be approximately $120 million and would be received at closing, which is expected to occur by early in the third quarter. The transaction would result in an after-tax gain of approximately $80 million. Timing of the gain recognition is currently being evaluated.

Sale of these timberlands is consistent with Neenah Paper's previously announced strategy to unlock value from pulp operations and focus on growth in the fine paper and technical products businesses. Terms of the sale include a supply agreement that ensures Neenah Paper's Pictou pulp mill continues to receive fiber for its operations and that the timberlands will continue to be managed in a responsible, sustainable manner. Neenah Paper will continue to own approximately 500,000 acres of timberlands in Nova Scotia.

"We are extremely pleased with the terms of the transaction and the completion of this important step in our strategy to transform Neenah Paper and deliver value to shareholders," said Sean Erwin, chairman and chief executive officer. "The proceeds can provide a source of funding for investments which would provide growth and offer attractive financial returns. It was also important that the agreement provide for a secure supply of fiber to our Pictou operations and I feel confident that the mill will continue to be successful under this new arrangement."

UBS Investment Bank acted as financial advisor to Neenah Paper on this transaction.

About Neenah Paper, Inc.

Neenah Paper manufactures and distributes a wide range of premium and specialty paper grades. The company also produces and sells bleached pulp, primarily for use in the manufacture of tissue and writing papers. Neenah Paper is based in Alpharetta, Georgia, and has manufacturing operations in Wisconsin, Michigan, and in the Canadian provinces of Ontario and Nova Scotia. Additional information about Neenah Paper can be found at the company's Web site at www.neenah.com.

Source: Neenah Paper, Inc.