TORONTO, November 14, 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 successfully exit its investment in Travelers Leasing Corporation (“TLC”) following the completion of an acquisition by Scotiabank. Full terms of the transaction, which is subject to regulatory approval, have not been disclosed.
VenGrowth is a major venture investor in TLC, investing a total of $10 million in the specialty automobile finance company through The VenGrowth Investment Fund Inc. and The VenGrowth II Investment Fund Inc. in December 2003. The Funds provided subordinated debt and also acquired a significant equity position in the company. The financing was used by British Columbia-based TLC to expand operations across Canada.
Under the terms of the acquisition, the VenGrowth Funds will secure a significant positive return at closing, to be followed by a further contingent payment scheduled for three years time. VenGrowth ultimately expects a return of many times its investment in TLC.
“To exit this investment with a substantial return in less than three years is an excellent result for the VenGrowth Funds and their shareholders,” said Graham McBride, VenGrowth Managing General Partner. “It’s a prime example of the upside that can be generated by securing an equity stake alongside the debt portion of a mezzanine investment.”
“TLC is typical of the successful Canadian companies that the VenGrowth Traditional Industries Group is focused on partnering with – an established company with an exceptional management team, demonstrated cash flows and a defensible market niche,” added Mr. McBride.
TLC has provided automobile financing to Canadians since 2001. It is one of three business units operated by Travelers Financial Group, a financial solutions provider. TLC currently has $255 million in loans under administration. The firm has 150 employees offering auto purchase financing through its head office in Vancouver, a regional office in Mississauga and locations in Calgary, Edmonton, Winnipeg, Ottawa, Windsor, Montreal, Hull-Gatineau, Halifax, Saskatoon and Kelowna.
“VenGrowth has been a key strategic partner for us as we have successfully expanded nationwide over the last three years,” said Jim Case, TLC President and Chief Executive Officer. “We have drawn on the VenGrowth team’s extensive experience and resources in order to help us grow our business.”
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 $100 million into 14 companies as at November 1, 2006. The Group is led by Graham McBride, a highly regarded mezzanine financing expert with over 19 years of experience.
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 TLC
TLC is a specialty auto finance company that provides automobile leases and loans to customers through pre-qualified dealers across Canada. The company’s business activity is focused primarily on the sub-prime segment, which include those consumers whose specific needs are not addressed by larger, traditional financial institutions.
Media Inquiries:
Angus Fisher
Manager, Media &Communications
VenGrowth Asset Management Inc.
(416) 628 9255
afisher@vengrowth.com
