RAYMOR INDUSTRIES INC.
TSX VENTURE : RAR

RAYMOR INDUSTRIES INC.

January 14, 2010 12:04 ET

Raymor Industries Approves a Private Investment Offer of $6,500,000 and Submits an Amended Proposal to Its Creditors

MONTREAL, QUEBEC--(Marketwire - Jan. 14, 2010) - Raymor Industries Inc. ("Raymor" or the "Corporation") (TSX VENTURE:RAR) announced today that it has approved on December 7, 2009 the terms of an offer contained in a letter dated December 4, 2009, providing the details of a proposed private investment (the "Transaction") by Georges Durst, Rolland Veilleux and other investors who will eventually join the buying group (collectively, the "Buyer"), to invest $6,500,000 in Raymor. This Transaction is conditional upon the cancellation of all issued and outstanding equity securities of the Corporation, including the shares, warrants, options, rights to purchase shares, share subscription rights and conversion rights, for a nominal value (which may be nil), pursuant to a mechanism that would be to the entire satisfaction of the Corporation, and the creation of new common and preferred shares pursuant to the terms of the said offer.

At the closing of the Transaction, the Buyer will subscribe for new common shares of the Corporation for a consideration of $6,500,000 less the total amount of the new preferred shares of the Corporation which will be issued subject to the following: holders of senior and subordinated secured debt (convertible debentures) as well as holders of demand notes will be entitled to elect to receive at closing either (i) a corresponding number of new preferred shares, priced at $1 per share up to the amount of their debt, including principal and accrued and unpaid interest; or (ii) a cash payment equal to the amount of their debt, including principal and accrued and unpaid interest. The preferred shares will be non-voting, non-participating, with a cumulative dividend of 4%, and redeemable at the paid-up capital plus any unpaid dividend.

The Corporation's independent committee (the "Committee"), established on September 24, 2009 to carefully assess all the available alternatives (the "Alternatives"), including the sale or financing of the Corporation in light of its current financial situation, its financing requirements, and the cease trade orders issued by the TSX Venture Exchange and the competent securities regulatory authorities, based its recommendation to the Corporation's Board of Directors (the "Board"), among other things, on (i) a valuation report (the "Valuation") prepared by Wise, Blackman LLP ("Wise, Blackman"), an independent valuation expert, according to which, as of September 30, 2009, subject to the limitations, assumptions, and qualifications noted therein, the fair market value of the Corporation's issued and outstanding shares is nil; and (2) the opinion of Wise, Blackman, dated December 7, 2009 (the "Fairness Opinion"), according to which, subject to the limitations, assumptions, and qualifications noted therein, the Transaction is fair from a financial point of view to Raymor and its stakeholders.

The Committee took into account many factors in order to make its recommendation to the Board, including: (i) the Valuation and the Fairness Opinion, (ii) the precarious financial situation of the Corporation, which increases the urgency and necessity for short-term capital, (iii) the questionable quality of historical financial information and the absence of current audited financial statements, (iv) the existence of cease trade orders, (v) the capital structure of the Corporation, and (vi) the lack of interest by potential investors or buyers. In addition, the Committee took into account the fact that, under the offer letter, the Board retains the right to examine and respond, in certain circumstances and in accordance with its fiduciary duties, to proposals that could reasonably be concluded and are more favourable than the proposed Transaction, from a financial point of view, to the Corporation and its stakeholders. Furthermore, no break-up fees and no expense reimbursement are payable by the Corporation to the Buyer in such circumstances.

After reviewing the recommendation of the Committee, the Valuation and the Fairness Opinion, and after undertaking a thorough and detailed review of the Transaction and the Alternatives, taking into account the interests of the stakeholders, in accordance with the obligations of the Corporation as a socially responsible company, including the interests of the shareholders, employees, creditors, consumers, government and the environment, no interest having any priority over others, the Board (with interested directors abstaining from voting) has determined that the Transaction is in the best interests of the Corporation and has approved the Transaction.

Pursuant to the Transaction, the Corporation filed in court, for approval, an amended proposal to its creditors, dated April 15, 2009, approved by the creditors at their meeting on April 30, 2009 and by the Superior Court of Quebec on May 1, 2009, as previously announced in the press release dated May 4, 2009. The Transaction is also subject to obtaining all required regulatory approvals, including the approval of the Superior Court of Quebec before which a hearing has been rescheduled to January 15, 2010.

Certain statements contained in this release contain forward-looking statements. In this release, the use of future or conditional terms allows the use of forward-looking statements. Such statements reflect Raymor's current views with respect to future events or conditions, including the results of operations, financial situation, expected actions, plans or future strategies. Certain material factors and assumptions were used in formulating Raymor's conclusions and such forward-looking statements. By their nature, those statements reflect management's current views, beliefs and assumptions and are subject to certain risks and uncertainties, known and unknown, including, without limitation, the uncertainty as to the outcome of regulatory approvals required to complete the Transaction and the amended proposal, including the approval of the Superior Court of Quebec. Many factors could cause Raymor's actual results, performance or achievements to be materially different from those that may be expressed or implied by these forward-looking statements. Should any of these risks or uncertainties materialize, or should the assumptions underlying the projections or forward-looking statements prove incorrect, our actual results may differ materially from those anticipated, believed, estimated or expected as described in this release. Unless otherwise required by law, the Corporation disclaims any intention or obligation to update these forward-looking statements, whether as a result of new information, plans, events or otherwise.

Wise, Blackman, a leading business valuation consultant for more than thirty years, has advised numerous closely-held and public companies and governmental bodies in both Canada and the United States. Canadian and American courts have, on many occasions, recognized the firm's expertise in business and securities valuation. Wise, Blackman has also frequently advised securities regulators on matters regarding business valuation and the valuation of intangible assets.

ON BEHALF OF THE BOARD OF DIRECTORS

Alfredo Perez

For more information on Raymor Industries Inc., a Nanotech 100 Company, please visit: http://www.raymor.com

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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