Toronto, March 22, 2004. VenGrowth Capital Partners (“VenGrowth”), a leading private equity firm with over $1 billion in assets under management, today announced investments totaling $3 million in Navtel Communications Inc. (“Navtel”). Markham, Ontario-based Navtel develops revolutionary test solutions for both fixed and mobile telecommunications network technologies.
BDC Venture Capital joined VenGrowth in the $5 million investment round. With 20 years of history in the communications testing environment and significant revenues, Navtel is an excellent example of the later-stage businesses that VenGrowth is backing in this attractive investment environment.
The widespread use of advanced communication products and services such as cellular phones and email has created extensive network testing requirements. As telecom groups move to a Voice over Internet Protocol (“VoIP”) infrastructure – internet connections that allow voice to be transferred along with data – there is a major need for integrated testing solutions that can effectively assess multiple communications platforms and protocols.
Navtel specializes in emerging technology and aims to lead the field in the next generation of VoIP and similar emerging technology testing requirements. It is working closely with its customers – major equipment vendors and service providers – to produce integrated platforms that meet the new, complex testing needs in this multi-billion dollar market.
Network testing increasingly critical to telecommunications service providers
In an increasingly competitive market, telecom service providers recognize the value of critical preliminary testing and allocate billions of dollars to the area. Thoroughly testing networks before live user-traffic is introduced has become an integral part of most providers’ budget and strategic planning.
Navtel’s established products and services enable telecommunications companies to perform comprehensive automated testing of different aspects of network signaling and data services. Its products simulate vast amounts of actual end user traffic in a test environment. Navtel’s solutions test equipment to ensure that it: functions according to its own specifications; conforms to certain standards; can manage high user volumes and will operate in conjunction with separate network elements. Its testing solutions enable telecommunications service providers to effectively pinpoint and address network weaknesses, protecting them from costly disasters like overload or system attack in the future.
“This financing from VenGrowth ensures that Navtel can further accelerate its plans to develop cutting edge, integrated solutions for VoIP and other next generation systems,” said Stephane Attal, President of Navtel. “As one of Canada’s most experienced and respected funding groups, VenGrowth’s support is a testament to our strong business model and competitive advantage in a dynamic market.”
“With significant revenues, established customer relationships and leading edge technology, Navtel is a prime example of a later-stage company with the potential to generate future returns for VenGrowth shareholders,” said Peter Seeligsohn, General Partner, VenGrowth Capital Partners. “Now that research and development is heating up in the telecom industry, we are particularly excited by Navtel’s strong position in the development of next generation integrated test solutions.”
As part of the funding arrangement, Peter Seeligsohn will join Navtel’s Board of Directors. Navtel received $0.93 million from The VenGrowth Investment Fund Inc. (“VenGrowth I”) and $2.07 million from The VenGrowth II Investment Fund Inc. (“VenGrowth II”).
About VenGrowth Capital Partners
With over $1 billion in assets under management, VenGrowth is Canada’s largest private equity and venture capital firm managing both retail and institutional assets. Since 1982, VenGrowth’s accomplished team of seasoned private equity managers has invested over $1 billion in 169 companies, building a strong track record of successful portfolio transactions. These investments have been made on behalf of over 160,000 individual investors as well as leading pension funds, insurance companies and family foundations. Portfolio companies benefit from VenGrowth’s substantial experience, resources, and hands-on, value added investment style. VenGrowth is 100% independently owned by employees that are dedicated to generating superior returns for shareholders in its Funds. VenGrowth’s offices are located in Toronto (Corporate Headquarters) and Ottawa. VenGrowth Capital Partners refers to VenGrowth Capital Partners Inc. and its affiliates. For more information, please visit www.vengrowth.com.
About VenGrowth I Fund (closed)
VenGrowth I is a broadly diversified, core venture capital fund focused on innovative growth industries for above average long-term return potential. The Fund was launched in 1995 and capped in 1999 to enable shareholders to fully benefit from a maturing venture capital portfolio. The average annual revenue of a VenGrowth I portfolio company had reached $30 million by December 31, 2003. The VenGrowth I portfolio is diversified across a broad range of predominantly later-stage companies and industry sectors spanning Internet infrastructure, enterprise software, communications, semiconductors, life sciences, traditional industries and special growth opportunities. The Fund is managed by a team of specialized VenGrowth investment professionals with extensive operational and industry experience. The Fund also leverages the expertise of an external advisory board including high profile members of U.S. and Canadian business communities. In addition to expert management, the Fund provides its investors with long-term performance potential and 100% RRSP-eligibility. Through the Fund's labour sponsored investment fund structure, investors in the Fund were also eligible for substantial tax credits. The Fund had net assets of $371.7 million as of February 29, 2004.
About VenGrowth II Fund
VenGrowth II is a broadly diversified, core venture capital fund focused on innovative growth industries for above average long-term return potential. Launched in 2000, VenGrowth II is Canada’s largest national labour sponsored investment fund (LSIF) with over 100,000 existing investors. The Fund’s portfolio is diversified across a broad range of predominantly later-stage companies and industry sectors spanning Internet infrastructure, enterprise software, communications, semiconductors, life sciences, traditional industries and special growth opportunities. This diversified approach is designed to offer investors the combined benefits of high return potential and lower risk. The Fund is managed by a team of specialized VenGrowth professionals with extensive operational and industry experience. The Fund also leverages the expertise of an external advisory board including high profile members of U.S. and Canadian business communities. In addition, the professionally managed Fund offers investors long-term performance potential, 100% RRSP-eligibility and, through its LSIF structure, eligibility for substantial tax credits. The Fund had net assets of $505.6 million as of February 29, 2004.
About Navtel Communications
Established in 1976, Navtel Communications Inc. is a global provider of leading edge network test solutions for the converged mobile and fixed network industries. Navtel's solutions enable manufacturers and service providers to perform comprehensive automated testing of both signaling and data planes, using a progressive methodology that includes: functional, conformance, interoperability, performance and scalability testing. Navtel’s substantial investment in a strong and dedicated R&D team coupled with its participation in organizations such as; ETSI, MSF, MPLS Forum, IPv6 Forum, SIP Forum, UNH-IOL Consortium and IPCC has allowed it to become the expert in new and emerging technologies.
For further information:
Ed Dermit,
Vice President, Marketing
VenGrowth Capital Partners Inc.,
(416) 967-2392
ed@vengrowth.com
