May 9, 2008 (Helsinki, Finland) – In a move to increase the profitability of both its Outdoor Sport and its Industrial Composite business, Exel Plc has sold the EXEL Sports Outdoor sport division, which includes cross-country, downhill, Nordic walking and blading, to KARHU, Finland, one of the leading Finnish Sports equipment manufacturers. Karhu is one of the oldest sports brands in Finland dating back to the beginning of last century. Note: Karhu Finland is not related to Karhu USA (K2 Corp.) of Seattle, WA.

The transaction with Karhu Sports secures the continued presence and distribution of Exel branded poles in the sports equipment market in a model that strengthens Exel’s profitability. Karhu Sports has a strategic interest in developing the business. The transaction also includes a long-term licensing agreement related to the use of the Exel brand together with other brands such as Nordic Walker and Nordic Blader for selected product groups. The employees of the outdoor business in Finland and Germany will be transferred to Karhu Sports as existing employees.

“This arrangement is positive for both parties. Karhu Sports has a long-term interest in developing the business. The Outdoor business transfer secures the continued presence and distribution of Exel branded poles in the sports equipment market in a model that strengthens Exel’s profitability.” says the President and CEO of Exel Oyj, Vesa Korpimies.

”The combination of Karhu and Exel broadens our product range and international presence. We can utilize Exel’s distribution channels in Europe and offer strong brands and performance oriented products within cross-country skiing, Nordic Walking and other outdoor sports”, says the President and CEO of Karhu Sporting Goods Oy, Pertti Keskitalo.

“A more natural match would be hard to find. Two traditionally strong sporting brands are now under the same roof. Karhu will bring skis and boots, Exel poles,” said Olli E. Juvonen, CEO of Exel Sports.

According to Frank Thibodeau, President of Alpina Sports Corp., the distributor for Exel in North America: “We knew from the outset of our negotiations with Exel Sport last year, that they were seeking suitors for the purchase of the Outdoor Sport Division. With this knowledge Exel and Alpina Sports created a very solid North American Distributor Agreement that will continue in full force for the Exel brands.”