TORONTO, October 31, 2006 - VenGrowth Private Equity Partners Inc. and its affiliates ("VenGrowth"), a leading private equity firm with over $1 billion in assets under management, today announced an agreement to exit from its investment in Hayhurst Elias Dudek Inc. ("HED") following the completion of an investment by Western Financial Group. Under the terms of the agreement, Western Financial Group [S&P/TSX:WES] will acquire a 25% stake in HED.
VenGrowth was a major venture stakeholder in HED, investing a total of $7.5 million in the company through The VenGrowth Investment Fund Inc. and The VenGrowth II Investment Fund Inc. in December of 2003. VenGrowth obtained a 10% equity stake for nominal cost in conjunction with its mezzanine debt financing. VenGrowth is represented on the HED Board of Directors and was instrumental in the funding and creation of HED's Ontario insurance subsidiary, SecuriCan General Insurance Company ("SecuriCan").
Under the terms of the acquisition, VenGrowth will receive an immediate return on its equity stake with additional milestone payments to come in 2007, 2008 and a final payment to be received in 2009. The debt portion of the investment will be paid out by the end of 2006.
"VenGrowth is proud to be part of this success story," said Graham McBride, VenGrowth Managing General Partner. "HED's growth and leadership in its market represents a prime example of the kind of success Canadian businesses can achieve when they leverage the expertise of experienced mezzanine investors."
"VenGrowth has been a key strategic partner for us." said Art Elias, President and CEO of Hayhurst Elias Dudek Inc. "We have drawn on VenGrowth's resources and in-depth experience in order to achieve key milestones and reach the point that we are at today."
About VenGrowth
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 private equity managers have invested over $1.1 billion in over 180 companies, building a strong track record of successful portfolio transactions. These investments have been made on behalf of over 180,000 individual investors and leading pension funds, banks, insurance companies and family foundations. Portfolio companies benefit from VenGrowth's substantial experience, resources, and hands-on investment style. VenGrowth's offices are located in Toronto (Corporate Headquarters) and Ottawa. For more information, please visit www.vengrowth.com.
About HED
HED is one of the largest independently owned insurance brokers in Canada, consisting of approximately 190 employees nationwide. SecuriCan is a subsidiary of HED which focuses on Petplan Insurance; an offering that helps Canadian pets live longer and healthier lives by enabling their owners to provide the best in health care. Owners are able to choose from routine and preventive health care, illness and injury coverage, and preventive health care policies.
Media Inquiries:
Angus Fisher
Manager, Media &Communications
VenGrowth Asset Management Inc.
(416) 628 9255
afisher@vengrowth.com
