VenGrowth Asset Management Inc.

VenGrowth Asset Management Inc.

December 17, 2010 17:00 ET

VenGrowth and Covington Not to Proceed With Proposed Acquisition Transaction

TORONTO, ONTARIO--(Marketwire - Dec. 17, 2010) - The VenGrowth Funds announced today that its five retail venture capital funds (The VenGrowth Investment Fund Inc., The VenGrowth II Investment Fund Inc., The VenGrowth III Investment Fund Inc, The VenGrowth Advanced Life Sciences Fund Inc., and The VenGrowth Traditional Industries Fund Inc. (collectively the "VenGrowth Funds"), have mutually agreed with Covington Fund II not to proceed with their previously announced acquisition transaction.

The transaction was subject to regulatory approval, which the parties believe will not be forthcoming. In particular, the OSC staff have requested that a new vote be conducted after shareholders have received additional disclosure relating to the original manager-to-manager arrangements associated with the proposed transaction. While we believe the fact of the manager-to-manager arrangements was disclosed and that it had no impact on shareholder value, we respect the OSC's staff recommendation. However, at this time, it is not a viable alternative for the Funds in the context of the transaction terms.

The Board remains fully committed to its current Manager and the Manager remains dedicated to working diligently with the portfolio companies to seek profitable exits and maximize shareholder value.

The Board and management believe this transaction was in the best interest of the shareholders. With the transaction no longer available, the Board will re-invigorate its review of strategic options and will re-convene in January to look for opportunities for the Funds that will achieve the original transaction benefits. In the interim, the Board will undertake an assessment of the availability of surplus cash in capped funds with a view, where appropriate, to making a cash distribution to shareholders early in the new year.

Contact Information

  • Media Inquiries:
    VenGrowth Asset Management Inc.
    Wesley Ollson
    Director, Product Management and Communications
    (416) 628-9263
    wollson@vengrowth.com