16/12/2009 15:36:00

RAPALA ACQUIRES ULTRABITE PHEROMONE TECHNOLOGY BRAND

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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

agriculture businesses.

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

fish baits.

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

introduced.

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

Jorma Kasslin

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.

[HUG#1362799]

StockExchangeRelease_Ultrabite: http://hugin.info/120091/R/1362799/332667.pdf