Vengrowth Private Equity Partners Inc.

Vengrowth Private Equity Partners Inc.

February 19, 2008 15:23 ET

VenGrowth Achieves Solid Rate of Return From Early Exit of McCowan Investment

TORONTO, ONTARIO--(Marketwire - Feb. 19, 2008) - VenGrowth Private Equity Partners Inc. and its affiliates ("VenGrowth"), a leading Canadian private equity firm, today announced that it has successfully exited its investment in merchandising systems manufacturer McCowan Manufacturing Ltd. ("McCowan").

McCowan has repaid all of the capital originally invested by VenGrowth. At the same time, McCowan also made an additional payment to repurchase the minority equity position held by VenGrowth. The exit, completed ahead of schedule, generated an internal rate of return in excess of VenGrowth's initial target.

In January, 2006, The VenGrowth Traditional Industries Fund Inc., The VenGrowth III Investment Fund Inc. and VG Mezzanine I Limited Partnership provided a $4.5 million subordinated loan to finance the acquisition of McCowan.

Over the last two years, McCowan has grown both revenues and EBITDA (Earnings before interest, tax, depreciation and amortization).

"The Funds have benefited from McCowan's steady financial and operational performance, and we felt this was an opportune time to crystallize our equity appreciation in the company. The return achieved on the investment exceeded our initial expectation," said Michael Wolfe, General Partner, VenGrowth. "A significant portion of the return was generated as a result of structuring the investment with equity participation."

About VenGrowth Traditional Industries Group

VenGrowth Traditional Industries Group specializes in financing solutions for mid-market Canadian companies in traditional manufacturing and services industries that are expected to generate sustainable cash flows. The Group primarily invests using debt instruments with the objective of generating interest and dividend income to participating VenGrowth Funds. In addition, the Funds will typically hold equity interests alongside the loans with the intention of generating long-term capital appreciation. Formed in 2003, the Group had invested over $130 million into 18 companies as at January 1, 2008. The Group is led by Graham McBride, a highly regarded mezzanine financing expert with over 20 years of experience. For more information, please visit

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus of The VenGrowth III Diversified Fund Inc. or The VenGrowth Traditional Industries Fund Inc. before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

Fund Returns (%) as at February 14, 2008

VenGrowth Traditional Industries Fund

1 year -1.08%, 3 year 0.57%, S.I. 0.17%

VenGrowth III Diversified Fund

1 year -6.33%, 3 year -2.81%, S.I. -2.54%

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