Metso Acquires LignoBoost AB

Helsinki, Finland, 27 May 2008 -- Metso and STFI-Packforsk AB have signed a purchase agreement regarding the shares of Lignoboost AB, a Swedish research company. The transaction includes all the intellectual property rights, the LignoBoost brand, and the company's related know-how. Personnel or facilities are not included in the transaction.

In addition Metso and STFI-Packforsk have signed a research and development agreement related to LignoBoost technology. Both agreements come into force immediately. The value of the transaction will not be disclosed. The acquired company will become part of Metso Power, a part of Metso Paper business area.

The acquisition supports Metso’s profitable growth strategy and opens an interesting biofuel business opportunity within pulping processes.

"We see great value in getting a process with such high future expectations," said Lennart Ohlsson, president of Metso Power. "It complements our present solutions offering in an excellent way. LignoBoost has the best chances of being further commercialized for industrial applications in a global company such as Metso," he said.

LignoBoost represents a technology that extracts lignin, a component of natural wood, from the chemicals used in the pulping process. The extracted lignin can be used as biofuel, replacing coal and oil, i.e. in pulp mill's power generation or in lime kilns. LignoBoost gives Metso’s customers the possibility to increase the capacity of a pulp mill and turn pulp mills into significant energy suppliers. The extracted lignin is also of interest for other process industries as a raw material for plastics and chemicals.

The LignoBoost technology has proven its technical maturity over several years of research and laboratory testing and during operation in an industrial-size demonstration plant integrated into the pulping process of Nordic Paper at Bäckhammar, Kristinehamn, Sweden. The demonstration plant will remain the possession of STFI-Packforsk.

Until the transaction, Lignoboost AB was a subsidiary of STFI-Packforsk AB, which is one of the world's leading R&D companies in the fields of pulp, paper, graphic media, and packaging. Including subsidiaries, the annual turnover of STFI-Packforsk AB amounts to about EUR 33 million. Lignoboost AB was established in 2006, as a result of seven years of work within STFI-Packforsk research programs, with the business purpose to market and commercialize the technology by selling licenses to the pulping industry.

Metso is a global engineering and technology corporation with 2007 net sales of over EUR 6 billion. Its over 27,000 employees in approximately 50 countries serve customers in the pulp and paper industry, rock and minerals processing, the energy industry, and selected other industries.

www.metso.com