Novacap announces the closing on two new funds totalling $565 million to be invested in SME



    MONTREAL, Feb. 7 /CNW Telbec/ - Novacap, one of Canada's leading private
equity and venture capital firms, is proud to announce the closing on two new
sectoral funds: Novacap Industries III, L.P. ($400 million) and Novacap
Technologies III, L.P. ($165 million). The creation of these funds marks the
largest private equity initiative in Quebec to date. The funds are part of the
Novacap I (1981) and Novacap II (2000) fund series, which have invested over
$300 million in the acquisition and development of over 50 companies.

    Novacap Industries III

    Novacap Industries III will acquire majority interests in industrial or
consumer product manufacturers and service companies with revenues of $40 M to
$300 M. "We are very proud of having closed this third fund, which attests to
how much faith our sponsors have in our team," stated Jean-Pierre Chartrand,
President of Novacap Industries. "This capital will enable us to build solid
partnerships with other entrepreneurs so they can accelerate the growth of
their businesses.

    Novacap Industries has contributed to the success of many companies,
including:

    
    - Rosmar Packaging Group Inc. - a leader in the cardboard printing
      industry;

    - Les Aliments Multibar Inc. - the largest cereal bar manufacturer in
      North America;

    - Knowlton Packaging Inc. - a leader in personal hygiene products
      manufacturing;

    - MAAX Inc. - Canada's largest manufacturer of bathroom appliances and
      fixtures;

    - Metro Canada Logistics Inc. - a leading provider of warehousing
      services, transport, and custom solutions for the management of the
      supply chain in North America.

    Novacap Technologies III

    Novacap Technologies III will acquire major interests in Information
Technology and Communication (ITC) firms with revenues of $10 M to $200 M.
"Having invested heavily in the ITC field over the years, we've developed a
unique expertise in acquiring and developing tech firms. Closing this fund
will give us the financial resources required to continue helping innovative
entrepreneurs build world-class companies," added Marc Beauchamp, President of
Novacap Technologies.

    Novacap Technologies has contributed to the success of many tech firms,
including:

    - InnoMediaLogic (IML) Inc. - designs, makes and sells network cards to
      support multimedia communication applications;

    - Teleglobe Canada Inc. - a global leader in overseas communications
      services;

    - Octasic Inc. - designs, markets and supports integrated circuits for
      communication equipment providers;

    - ViXS - a leading developer of advanced video processing semiconductors.
    

    Sponsors

    Novacap is supported by some of the largest financial institutions in
Canada, the United States and Europe. Novacap's funding is provided by
institutional investors, banks, insurance companies, pension funds, fund of
funds, well-to-do families and individuals, as well as Novacap's general
partners. "The Caisse has been encouraging Novacap since its inception in
1981. We are therefore proud to partner once again with Novacap, for a total
investment of $110 million in these two sectoral funds," stated Normand
Provost, Senior Vice-President, Private Equity of the Caisse de dépôt et
placement du Québec. "These funds are totally consistent with our Quebec
business partnership and development strategy since the majority of Novacap's
investments to date have been in Quebec businesses. This business relationship
has been positive for the companies funded by Novacap, the Caisse and its
depositors."

    Novacap - a true financial partner

    "Novacap's partners have extensive experience in operations, R&D, sales
and marketing, financing, mergers and acquisitions, corporate growth and
strategic development," explained Jacques Foisy, Chief Financial Officer and
General Partner of Novacap. "Our aim is to work closely with entrepreneurs to
strengthen the foundation of their businesses, consolidate their industry, and
foster the development of their technologies, operations and markets. Novacap
is far more than an investor; it's a partner that takes an active part in
growing and building the value of the business."

    Well positioned to ensure the succession of Canadian SME

    According to the Canadian Federation of Independent Business, 41% of
Canadian small- and medium-size businesses may sell their business within the
next five years. Since 45% of Canada's GDP comes from SME, the succession of
these businesses will have major impacts on job creation and economic outlooks
in the country. "Because of our solid expertise and considerable financial
resources, we are very well positioned to play a leading role in the
succession planning of Canadian SME owners," added Jacques Foisy.

    About Novacap

    With over $750 million in assets under management, Novacap is one of
Canada's leading private equity and venture capital firms. Since 1981, its
partnership strategy has helped over 50 companies accelerate growth and
maximize value. Novacap is one of North America's top private equity firms,
with first-quartile returns in North America. For further information, visit
www.novacap.ca.




For further information:

For further information: and interview requests: Dominic Sicotte, Echoes
Financial Network Inc., (514) 842-9551, dsicotte@echoesfinancial.com

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NOVACAP INC.

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