Munksjö to form a leading global specialty paper company

• Munksjö to combine with Ahlstrom’s Label and Processing business area forming a world leading company in specialty paper with EUR 1.3 billion in net sales
• A new company will be created, a Finnish company named Munksjö Corporation with its head office in Stockholm, Sweden
• Munksjö Corporation is expected to achieve annual synergies of about EUR 25‑30 million once fully implemented
• Munksjö Corporation is expected to be listed on NASDAQ OMX Helsinki during Q1/2013. A future listing on NASDAQ OMX Stockholm is being considered
• The combination is a natural step in Munksjö’s growth strategy within specialty paper after the acquisition of the Decor, Abrasives, Thin Print Papers and Fine Art businesses of ArjoWiggins in 2011

Munksjö and Ahlstrom Corporation have agreed on combining Ahlstrom’s Label and Processing business area with Munksjö, forming a new company to be named Munksjö Corporation. The new company will be a global leader in specialty paper with combined net sales in 2011 of EUR 1.3 billion. The new company will have approximately 3,300 employees at 16 production sites in Europe, Brazil and China.

“The planned combination is the natural next step in Munksjö’s strategy to become a leading, global specialty paper company, following the acquisition of ArjoWiggins’ Decor, Abrasives, Thin Print Papers and Fine Art businesses in 2011. It will lead to strengthened competitiveness and efficiency and bring added growth opportunities to the company, organically as well as strategically”, says Jan Åström, President and CEO of Munksjö.

Following the proposed transaction Munksjö´s current shareholders will own approximately 29 percent of the new company and Ahlstrom’s current shareholders will own approximately 50 percent. Institutional investors Varma and Ilmarinen as well as Ahlstrom and EQT III have been offered shares in a EUR 100 million directed share issue. The directed share issue is fully subscribed. The new company has fully committed credit facilities with a net debt of approximately EUR 300 million at closing, leading to a capital structure well in line with the peer group.

Trading of the shares in the new company is expected to commence during the first quarter of 2013 on NASDAQ OMX Helsinki.

Transaction rationale

The clear strategic fit between the two business both with speciality paper as the core business, will serve as a platform for continued growth.

The new combined company will become one of the world’s largest specialty paper companies with strong market positions in attractive market segments. Munksjö will, after the transaction, offer and serve its global customers with a unique product offering for a large number of fibre-based industrial applications and consumer-driven products. The customer relationships, deep knowledge of customer needs and high technical expertise in production and product development will contribute to the sustainability of these strong market positions.

The transaction is expected to create synergies in the form of cost savings and efficiency improvements. Annual synergies, once fully implemented, are estimated to reach EUR 25‑30 million, mainly relating to purchasing, production efficiencies, pulp, logistics and sales. Of the identified synergies, 60 percent are expected to be achieved within 12 months following the closing of the transaction. The remaining synergies are expected to be reached within the following two to three years.

Munksjö and Ahlstrom Corporation’s Label and Processing business area forming a new company – Munksjö Corporation

Munksjö is a specialty paper company headquartered in Stockholm, Sweden. The company’s majority owner is the private equity fund EQT III. In 2011, Munksjö’s net sales were EUR 645 million (net sales are adjusted for Munksjö’s acquisition of operations from ArjoWiggins, which was completed in March 2011). Munksjö employs approximately 1,800 and has ten productionfacilities in Europe and Asia. Its main products include Decor papers, Abrasive backings, Electrotechnical papers and long-fibre Specialty Pulp.

In 2011, Ahlstrom Corporation´s Label and Processing business (the combined LP Europe and Coated Specialities) had net sales of EUR 681[1] million. The business area employs approximately 1,500 and has six productionfacilities in Europe and South America. Its main products include release liners, self-adhesive labels, base paper for metalized labels, flexible packaging papers, poster papers, decor papers, and abrasive backings. The mills that will be part of the transaction are Osnabrück in Germany, La Gere, Rottersac and Stenay in France, the Label and Processing operations in Turin, Italy and the coated specialities mill in Jacarei, Brazil.

Jan Åström, the President and CEO of Munksjö AB, will become the President and CEO of the new company. Peter Seligson has been appointed Chairman of the intermediate Board of Directors of Munksjö Corporation. The head office will be located in Stockholm, Sweden and the shares will be listed on NASDAQ OMX Helsinki. A future listing on NASDAQ OMX Stockholm is being considered.

Transaction conditions and time line

The shareholders of Munksjö have approved the planned combination. The transaction does in addition require approval of the Extraordinary Shareholders’ Meeting of Ahlstrom Corporation that is planned to be held in November 2012.

The transaction is expected to be completed during the first quarter of 2013 and is subject to customary completion terms, such as merger clearances from relevant competition authorities including the European Commission. Trading in shares of the new company is planned to commence during the first quarter of 2013. Furthermore, Ahlstrom’s operations in Brazil will be demerged into Munksjö Corporation in a separate transaction, expected to be completed by the end of the second quarter of 2013. This is to allow enough time to receive all the necessary regulatory approvals in Brazil and is not a prerequisite for the public listing of the company.

Selected key financial information in 2011 (unaudited)

1) Combined amounts based on the historical carve-out financial information derived from the Ahlstrom Group
2) Pro forma information adjusted for Munksjö’s acquisition of operations from ArjoWiggins, which was completed in March 2011. Exchange rate of 9.0 EUR/SEK has been applied on income statement items;8.9 EUR/SEK on total assets
The financial information presented above has not been adjusted for any anticipated changes in the cost structure or for any synergy benefits.

Press and analyst conference

Munksjö will hold a joint press and analyst conference with Ahlstrom Corporation in Helsinki on August 28, 2012 at 12.00 Finnish time (CET+1). The event will be hosted by Munksjö´s President and CEO Jan Åström and Ahlstrom Corporation’s President and CEO Jan Lång, and it will be held in English. The press conference will take place at Hotel Scandic Simonkenttä, Simonkatu 9. The name of the meeting room will be displayed on the board in the lobby.

The event can also be viewed as a live webcast at http://www.goodmood.fi/ahlstrom/register.php. You are able to ask questions online after the presentation. Registration is required.

Alternatively, you can participate via teleconference, please dial +358 9 2319 5437 in Finland, +46 8 50520424 in Sweden or +44 20 3003 2666 in other countries a few minutes before the conference begins. The meeting is called ‘Ahlstrom press conference’.

Stockholm, August 28, 2012

[1] Combined amounts based on the historical carve-out financial information derived from the Ahlstrom Group.

For further information, please contact:

Jan Åström, President and CEO, +46 705 860 701
Åsa Fredriksson, Senior Vice President HR and Information, +46 10 250 1003

Munksjö in brief

Munksjö is one of Europe’s leading players in specialty paper and specialty pulp. The Group develops, manufactures, markets and sells high-quality and value-creating specialty papers such as Decor papers used in the manufacture of for example furniture, kitchen interiors and laminate flooring. Products used in industrial applications include Abrasive backings and Electrotechnical papers for the insulation of high-voltage cables and transformers. The customer relationships, high technical competence, production know-how and the capacity for product development have contributed to Munksjö’s strong market positions. Munksjö has production facilities in France, China, Germany, Spain and Sweden and employs approximately 1,800. More information is available at www.munksjo.com.

Ahlstrom in brief

Ahlstrom is a high performance materials company, partnering with leading businesses around the world to help them stay ahead. Its products are used in a large variety of everyday applications, such as filters, medical gowns and drapes, wallcoverings, flooring, labels and food packaging. Ahlstrom has a leading market position in the businesses in which it operates. The 5,200 employees serve customers in 28 countries on six continents. In 2011, Ahlstrom's net sales amounted to EUR 1.6 billion. The company's share is quoted on the NASDAQ OMX Helsinki. More information is available at www.ahlstrom.com.