Toronto, November 23 2004 - VenGrowth Capital Partners ("VenGrowth"), a leading private equity firm with over $1 billion in assets under management, today announced a $4 million investment in printing firm Central Ontario Web Ltd.
The VenGrowth Traditional Industries Fund Inc. and the VenGrowth II Investment Fund Inc. participated in the acquisition of Barrie-based Central Ontario Web from its founders. VenGrowth's mezzanine finance team led the buy-out transaction, which included senior bank financing and a co-investment from George Grigaitis - an experienced investor with a successful track record of building and running successful printing companies.
"I'm excited to be involved with this established printing company with a strong reputation for on-time delivery and a healthy customer base in the Southern Ontario market," said Mr. Grigaitis, Chief Executive Officer of Central Ontario Web.
The deal was structured so that the VenGrowth Funds receive regular interest income on a subordinated loan and also other debt that is convertible into an equity stake in the private company. The deal represents the fourth investment completed by the VenGrowth Traditional Industries Fund - VenGrowth's most conservative labour sponsored investment fund ("LSIF") offering to date.
Established in 1990, Central Ontario Web provides "web offset printing" - one of the most cost-efficient and commonly used commercial printing processes. The company services local, regional, national and international clients - specializing in printing community newspapers and commercial business. Andrew Scannapiego, an experienced manager of printing operations and long-time colleague of Mr. Grigaitis, will head up the day-to-day operations of Central Ontario Web going forward.
"Central Ontario Web has established itself as a successful business in a fragmented market that presents significant growth prospects," said Gavin Muranaka, Investment Director of VenGrowth. "The company exhibits the key qualities that the VenGrowth's mezzanine finance team targets on behalf of investors - an experienced management team, cash flows and a strong value proposition."
"The financing from the VenGrowth Funds will enable us to further expand our sales presence and focus on growth opportunities in the newspaper and commercial printing market." said Mr. Scannapiego, President of Central Ontario Web.
About VenGrowth Traditional Industries Fund
The VenGrowth Traditional Industries Fund Inc. is VenGrowth's most conservative labour sponsored investment fund ("LSIF"). Launched in November 2003, the Fund focuses on predominantly small and medium sized Canadian companies in traditional manufacturing and services industries that are expected to generate sustainable cash flows. The Fund invests primarily using debt instruments with the objective of generating interest and dividend income to the Fund. In addition, the Fund will typically hold equity interests alongside the loans with the intention of generating long-term capital appreciation. The Fund is managed by a team of specialized VenGrowth professionals led by Graham McBride, a highly regarded mezzanine financing expert with over 19 years of experience. In addition to expert management, the 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 over $24.5 million as of October 31, 2004.
About VenGrowth
Founded in 1982, VenGrowth Capital Partners Inc. and its affiliates ("VenGrowth") are dedicated to providing Canadians with superior, value-added alternative investment products. VenGrowth's seasoned investment professionals adopt a conservative, hands-on approach to investing in Canada's premier private equity opportunities - having invested over $1 billion in 175 companies to date. Today, the VenGrowth Funds manage over $1 billion in assets on behalf of over 180,000 individual investors and leading pension funds, banks, insurance companies and family foundations. In 2004, VenGrowth expanded its alternative investment strategy with the launch of retail structured products affiliate Criterion Investments. VenGrowth's offices are located in Toronto (Corporate Headquarters) and Ottawa. For more information, please visit www.vengrowth.com.
About Central Ontario Web
Central Ontario Web Ltd. is a privately owned company providing quality web offset printing and digital pre-press services to local, regional, national and international clients. The company specializes in the printing of community newspapers and commercial printing. For more information, please visit www.cow.on.ca
For further information:
Angus Fisher
VenGrowth Capital Partners Inc.
(416) 628 9255
afisher@vengrowth.com
