TORONTO, September 21, 2004 - VenGrowth Capital Partners Inc. ("VenGrowth"), a leading private equity firm with over $1 billion in assets under management, today announced a $10 million investment in Comtrad - a leading importer and distributor of furniture hardware and components.
The VenGrowth Traditional Industries Fund Inc. and The VenGrowth II Investment Fund Inc. provided a subordinated loan to assist with the acquisition of the private company from its founders. The transaction, led by Roynat Capital, results in the VenGrowth Funds holding a minority stake. The investment was structured so that the VenGrowth Funds are to receive interest income on a monthly basis. The deal represents the second investment completed by the Traditional Industries Fund - VenGrowth's newest and most conservative labour sponsored investment fund ("LSIF").
Comtrad, a division of Waljon Industries Ltd., began marketing furniture castors from its Mississauga, Ontario base in 1974. Today the company services a large variety of furniture manufacturers across North America, with a particular emphasis on the fast-growing "ready-to-assemble" furniture market. Comtrad's product lines have expanded to include a variety of castors, cabinet hardware, drawer slides, fasteners, furniture legs, hinges, handles, glides and molded parts - primarily imported from Asian markets.
"Comtrad enjoys strong relationships with its suppliers in Asia and has been successfully servicing customers in the North American furniture manufacturing industry for over 25 years," said Michael Wolfe, Partner, VenGrowth Capital Partners. "It's a good example of the type of established business with strong cash flows and growth potential that we are targeting on behalf of shareholders in the Traditional Industries Fund."
"This is an exciting development in the history of Comtrad," said Comtrad President, CEO and founder John Franklin, who will continue to run the day-to-day operations of the company. "Comtrad is well positioned to focus on further expanding our product line and taking our business into new regions of the strong North American furniture manufacturing market. I am looking forward to working with my new partners to grow this business."
The US household and office furniture manufacturing industry generates sales of approximately US$65 billion from over 20,000 companies.
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 (typically known as "mezzanine financing"). 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 August 31, 2004.
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 team of seasoned private equity managers has invested over $1 billion in 171 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. VenGrowth's offices are located in Toronto (Corporate Headquarters) and Ottawa. For more information, please visit: www.vengrowth.com
About Roynat Capital
Roynat Capital, a member of the Scotiabank Group of companies, was founded in 1962 and today is Canada's leading merchant bank specializing in building successful mid-sized companies with solution-based merchant banking services.
About Comtrad
Comtrad began in Mississauga, Ontario in 1974 to market furniture castors. Additional products were added to further service the needs of the furniture manufacturing industry over the years. Today, the company services a large variety of furniture manufacturers in both Canada and the United States, with a particular emphasis on the Ready To Assemble ("RTA") sector of the market. Comtrad will continue to grow and supply furniture components based on a philosophy of sound product strengths and dedicated service to customers past, present and future.
For further information:
Angus Fisher
VenGrowth Capital Partners
(416) 967 2271
afisher@vengrowth.com
