Borregaard — M&A Activity 2014

Mar 19, 2014

Borregaard: Borregaard - acquisition of food ingredients technology

Borregaard: Borregaard - acquisition of food ingredients technology

Borregaard has entered into an agreement with Watson Foods Co., Inc., West Haven

(CT), USA, for the acquisition of Watson's Ultracel technology. Borregaard will

take over technology and know how, intellectual property rights and equipment

located at Watson's site in Taylorville (IL). The acquired assets will form the

basis for the commercialization of Borregaard's SenseFi(®) concept, which has

been developed as part of the company's Exilva project.

SenseFi(®) is an advanced texture system based on specialty cellulose, which

will enable the development of high quality food products with reduced level of

calories. Borregaard is planning to start large scale pilot production of

SenseFi(®) at a new site to be established in Rothschild (WI) during the summer

of 2014. The cost of establishing the new production facility, including the

acquisition of the technology and equipment, will be close to 30 million NOK. At

full capacity the pilot line is expected to generate annual sales in the range

of 10 - 15 million NOK.

Borregaard has entered into a distribution agreement with Chicago (IL) based

Socius Ingredients LLC to develop the North American market. Socius will utilize

its Food Application Technical Center and work with food manufacturers to

capture the added value opportunities presented by this new technology. In

Europe, Borregaard will distribute SenseFi(®) in selected markets through the

company's existing sales organization.

Sarpsborg, 19. March 2014

Contact:

Jørn Syvertsen, Director Investor Relations, mobile +47 958 36 335

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1769910]