Rapala VMC Corporation
Stock Exchange Release
December 16, 2009 at 4.30 p.m.
Rapala VMC Corporation (Rapala or Group) has concluded agreements with Kiotech
International PLC (Kiotech) and the Centre for Environment, Fisheries and
Aquaculture Science (Cefas), an executive agency of the UK government?s
Department for Environment, Food and Rural Affairs, to exclusively commercialize
Ultrabite branded and patented pheromone technology to the sport fishing
industry and market worldwide.
Since 2006, Rapala has been developing new products for worldwide sales
exclusively using Ultrabite branded pheromone products developed by Cefas and
licensed through Kiotech. Rapala and Kiotech mutually recognized that Rapala is
uniquely qualified to further develop these products to the sport fishing market
and Kiotech wish to concentrate on their fast growing aquaculture and
Rapala, having had the benefit of three years of research and development for
product applications with fish pheromones, has identified the enormous potential
that exists for unique baits and has already developed an impressive range of
products specifically for the new pheromone technology including biodegradable
soft baits, artificial maggots and worms. A new dough bait material as well as
attractant gels and sprays are fully developed as well. After successful
research and field tests, major product categories are ready for global markets
thorough Rapala?s worldwide distribution network. Rapala will also supply fish
pheromones for third party manufacturers and it will enter into agreements with
selected partners to develop and distribute products into other product
categories of sport fishing such as ground baits, boilies, pellets and frozen
Rapala has concluded an exclusive licensing agreement directly with Cefas for an
initial period of 12 years with a further option for 10 years thereafter for the
use of pheromone technology. This direct co-operation will be key to the future
development and success of this important market sector for a long-term basis.
Rapala will strengthen its own organization to liaise directly with Cefas and
the subcontractors with whom Kiotech currently engage. This new business model
will give Rapala a unique opportunity to further develop new product groups
together with Cefas.
As part of the deal, Rapala acquired all intangible assets for the sale of all
pheromone products under the license agreement to the worldwide sports fishing
market from Kiotech including trademarks, business information, customer lists,
logos, domain names etc. At the same time, Kiotech has entered into a variation
with Cefas giving up its right to the sport fishing market worldwide and a
covenant not to compete with Rapala. Rapala and Kiotech also agreed to share all
new future innovations with each other.
Fish pheromone technology was developed by Cefas initially for the important
aquaculture and commercial fishing markets to stimulate feeding behavior of fish
but it has been recognized that it holds great opportunities also for the sport
fishing market as it gives an extra dimension to artificial baits, which
normally rely mainly upon other senses such as sound and sight.
?We are very excited about this long-term business opportunity, which we now
have with Cefas. Based on their research results and knowledge on fish pheromone
technology combined with our product experience and distribution power, we see
remarkable potential for additional business for our fishing lure sales. These
artificially made fish pheromones used with our environmentally friendly
materials allows us to produce soft baits that are very close to natural live
baits. Our goal is to offer more species specific fishing lures for sport
fishing around the world and continue to do research and field tests to find
more and new opportunities with these unique Ultrabite branded fish pheromones.
Due to our strong interest in this product category and the required investments
in R&D, we wanted to gain more control of the fish pheromone technology and the
ownership of the Ultrabite brand. With this deal, we achieved all this and
secured the further development and growth of this product category,? says Jari
Kokkonen, Director of Lure sales.
Rapala?s estimated sales of products including pheromones will be 1-2 MEUR in
2009. It is expected that the sales of these products will grow substantially in
the future as the newly developed products will be sold through Rapala?s
worldwide distribution network with further new products being developed and
The total consideration for the deal is 0.9 MEUR. This deal will have no
material effect on Rapala?s net sales or profitability in 2009.
RAPALA VMC CORPORATION
Chief Executive Officer
For further information:
Jari Kokkonen, Director of Lure sales, tel. + 358 9 7562 540
Olli Aho, Legal Counsel, tel. +358 9 7562 540
Jouni Grönroos, Chief Financial Officer, tel. +358 9 7562 540
Distribution: NASDAQ OMX Helsinki and Main Media
Rapala is a leading fishing tackle company and the global market leader in
fishing lures, treble hooks and fishing related knives and tools. The Group also
has a strong global position in other fishing categories and it is one of the
leading distributors of outdoor, hunting and winter sport products in the Nordic
countries. The Group has the largest distribution network in the industry. The
main manufacturing facilities are located in Finland, France, Estonia, Russia
and China. The Group brand portfolio includes the leading brand in the industry,
Rapala, and other global brands like VMC, Storm, Blue Fox, Luhr Jensen,
Williamson, Marttiini and Sufix. The Group, with net sales of EUR 243 million in
2008, employs some 2000 people in 30 countries. Rapala?s share is listed and
traded on the NASDAQ OMX Helsinki stock exchange since 1998.
Cefas is an internationally renowned scientific research and advisory
establishment and the UK?s largest and most diverse applied marine science
organization. Bridging the interface between science, policy and delivery, Cefas
provides evidence-based scientific advice, manages related data and information,
conducts world-class scientific research, and facilitates collaborative action
through wide-ranging relationships with government organizations, scientific
institutions, research centres, universities and industry. Cefas works to play a
vital role in securing healthy marine and freshwater environments.