Neenah Paper to Acquire FiberMark's German Operations

Alpharetta, Georgia, USA, 09 August 2006 -- /PRNewswire/ -- (NYSE:NP) -- Neenah Paper, Inc. today announced it had signed a definitive agreement to purchase FiberMark's German subsidiaries for USD 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 USD 29 million on net sales of USD 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."

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 USD 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.

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.