NORWALL GROUP INC. ANNOUNCES PROPOSED GOING PRIVATE TRANSACTION

BRAMPTON, ON, Oct. 21 /CNW/ -- 
BRAMPTON, ON, Oct. 21 /CNW/ - Norwall Group Inc. (TSXV: NGI) ("Norwall"
 or the "Corporation") announced today that it intends to seek
 shareholder approval for a proposal to take the Corporation private.


Norwall plans to effect the going-private transaction by way of a share
 consolidation (the "Consolidation") on the basis of one
 post-Consolidation common share for every 3,739,155 common shares held
 immediately prior to the Consolidation. Upon completion of the
 Consolidation, Patton Wallcoverings, LLC ("Newco"), a Florida limited
 liability company wholly-owned and controlled, directly or indirectly,
 by James J. Patton, Norwall President and CEO, and Bruce Mitchell, a
 control block shareholder of Norwall, will be the sole shareholder
 holding at least one whole common share. (Messrs. Patton and Mitchell
 collectively own 3,739,155 common shares, representing 52.4% of the
 issued and outstanding Norwall shares).


Shareholders who hold fractional shares upon completion of the
 Consolidation (collectively, "Minority Shareholders") will receive a
 cash payment of $0.93 per pre-Consolidation common share on account of
 such fractional shares. This cash payment represents a premium of
 approximately 16% over the closing price of Norwall shares on September
 20, 2010 (being the last date on which Norwall shares traded) and a
 36.5% premium over the weighted average trading price of the Norwall
 shares over the past 12 months.


Concurrent with the completion of the Consolidation, Norwall will apply
 to have its common shares de-listed from the TSX Venture Exchange. It
 will also apply to the securities regulatory authorities to cease to be
 a reporting issuer in each province in which it is currently a
 reporting issuer.


A special meeting (the "Meeting") of Norwall's shareholders has been
 called for December 3, 2010, at which time shareholders will be asked
 to consider and, if deemed advisable, approve the Consolidation. All
 shareholders of record as of November 1, 2010 (the "Record Date") will
 be entitled to receive notice of and to vote at the Meeting on the
 basis of one vote for each common share held. In connection with the
 Meeting, Norwall will distribute a management information circular and
 accompanying materials on or about November 9, 2010 to all shareholders
 of record as of the Record Date.


Under the Business Corporations Act (Ontario), the Consolidation requires the approval of two-thirds of the
 votes cast by shareholders at the Meeting.


Because the going private transaction constitutes a "business
 combination" for the purposes of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions ("MI 61-101"), the Consolidation must also be approved by a simple
 majority of the votes cast by minority shareholders at the Meeting.


In this regard, Norwall, Mr. Patton, Mr. Mitchell, Newco, Albeem B.V.
 and Lorraine Ashton (personally as a shareholder of Norwall and in her
 capacity as sole trustee ("Trustee") of the Richard Derek Arnold Ashton
 Trust (the "Ashton Trust") and sole executrix and trustee ("Estate
 Trustee") of the estate of the Late Richard Derek Arnold Ashton (the
 "Estate")) have entered into a support agreement dated October 20,
 2010, pursuant to which, among other things:


    --  Lorraine Ashton, the Ashton Trust, the Estate and Albeem B.V.
        (collectively, the "Ashton Shareholders") have agreed to vote
        their shares in favour of the Consolidation.

        The Ashton Shareholders collectively own 2,713,084 common
        shares, representing approximately 38% of the issued and
        outstanding shares and approximately 80% of all shares held by
        Minority Shareholders; and

    --  The Ashton Shareholders have agreed, effective upon completion
        of the Consolidation, to dismiss without costs the court
        proceedings (the "Ashton Litigation") commenced before the
        Ontario Superior Court of Justice on June 18, 2010 against
        Norwall, Mr. Mitchell and certain of Norwall's current and
        former directors and officers. (See Norwall's press release
        dated June 1, 2010 for further details concerning the Ashton
        Litigation. )



The Consolidation is exempt from the formal valuation requirement of MI
 61-101 because Norwall is not listed on a "specified market" within the
 meaning of section 4.4(a) of MI 61-101.


The board of directors of Norwall, with Mr. Patton as an interested
 director abstaining and acting on the recommendation of an independent
 committee of directors formed to consider the Consolidation, has
 unanimously approved the Consolidation and determined it to be in the
 best interests of Norwall and fair to Minority Shareholders. The
 reasons for the board's recommendation of the proposed transaction
 include:


    --  the Consolidation represents a liquidity opportunity in the
        absence of a liquid market for Norwall shares and in the face
        of a declining market for wallpaper products;

    --  the value of the cash consideration and the premium to the
        recent trading range of the Norwall shares;

    --  the unanimous favourable recommendation of the independent
        committee;

    --  the Consolidation will be subject to Minority Shareholder
        approval under MI 61-101;

    --  the Consolidation, if approved, will result in a full and final
        settlement of the Ashton Litigation; and

    --  the absence of available strategic alternatives.



In connection with the going private transaction, Newco has provided
 Norwall with a secured term loan (the "Newco Loan") in the principal
 amount of $2.7 million, bearing interest at a rate of 6% per annum,
 which funds will be used to make cash payments to Minority Shareholders
 commencing upon closing of the Consolidation. The Newco Loan
 constitutes a "related party transaction" for the purposes of MI 61-101
 but is exempt from the formal valuation requirement because Norwall is
 not listed on a "specified market" within the meaning of section 5.5(b)
 of MI 61-101. It is also exempt from the minority voting requirement by
 virtue of section 5.7(f) of MI 61-101, which exempts related party
 loans that have no equity or voting component and are made on
 commercial terms not less favourable to the issuer than if the
 financing had been obtained from an arm's length lender.


About Norwall


Norwall designs quality residential wallpapers and borders and
 distributes them to specialty stores in Canada and through its
 wholly-owned operating subsidiary, Patton Wallcoverings, in the United
 States and in 52 countries worldwide.


Forward-looking Statements


Certain statements included in this release contain words such as
 "could", "expects", "expectations", "may", "anticipates", "believes",
 "intends", "estimates" and "plans" (and similar expressions) and
 constitute "forward-looking statements" within the meaning of
 applicable securities law. These statements are based on Norwall's
 current expectations, estimates, forecasts and projections about the
 operating environment, economies and markets in which Norwall and its
 subsidiaries operate. Such forward-looking statements involve known and
 unknown risks, uncertainties and other factors which are difficult to
 predict and may cause the actual results, performance or achievements
 of Norwall, or outcomes or results, to be materially different from any
 future results, performance or achievements expressed or implied by
 such forward-looking statements. Such factors include, among others,
 such factors which are described in Norwall's management's discussion
 and analysis of operations and other filings with Canadian regulatory
 authorities. These statements, although considered reasonable by
 Norwall at the date of this press release, may prove to be inaccurate
 and consequently Norwall's actual results could differ materially from
 its expectations as set out or implied in this release. Unless
 otherwise required by applicable securities laws, Norwall disclaims any
 intention or obligation to update or revise any forward-looking
 statements.


The TSX Venture Exchange does not accept responsibility for the adequacy
 or accuracy of this release.

%SEDAR: 00002584E

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pJames J. Patton, President and Chief Executive Officer at (905)  791-2700, (a href="mailto:[e-mail]"[e-mail]/a); or Edward Diochon, Vice President of Finance at [phone], (a href="mailto:[e-mail]"[e-mail]/a)./p

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