Home Capital Group Inc. to Make Supported Take-Over Bid for Payment Services Interactive Gateway Corp.

    TORONTO, Aug. 16 /CNW/ - Home Capital Group Inc. ("Home Capital")
(TSX: HCG) announced today that it has entered into a definitive support
agreement with Payment Services Interactive Gateway Corp. ("PSiGate") (TSX
Venture Exchange: PSG) pursuant to which Home Capital will offer to acquire
(the "Offer") all of the issued and outstanding common shares ("Shares") of
PSiGate for cash consideration of $1.60 per Share. The consideration under the
Offer represents a premium of approximately 49.5% over the August 15, 2007
closing price of the Shares and a premium of approximately 36.7% to the 30-day
volume weighted average price of the Shares on the TSX Venture Exchange as of
August 15, 2007.
    The proposed transaction represents an enterprise value for PSiGate of
approximately $18.4 million.
    Gerald Soloway, Home Capital's President and CEO, stated, "The
acquisition of PSiGate is an important step in the expansion of our Home Trust
VISA card services division. PSiGate complements our existing product line by
allowing us to offer payment services to internet merchants and adds a strong
line-up of managerial and technical talent to our existing card services
    Anthony Palumbo, President and CEO of PSiGate, added, "Home Capital has
been one of Canada's best managed financial services companies for more than a
decade and we look forward to tapping into Home's financial and marketing
strengths as we continue to grow and expand our core business. With Home
Capital's backing, we believe that we are well positioned to meet the rapidly
growing credit card processing needs of our customers across Canada and the
    Upon the recommendation of a special committee of the independent
directors of PSiGate, the independent directors of the PSiGate Board of
Directors unanimously agreed to enter into the support agreement with Home
Capital and unanimously recommend that Shareholders accept the Offer. Octagon
Capital Corporation has acted as exclusive financial advisor to PSiGate and
the special committee and has provided them with a fairness opinion that the
consideration to be received by Shareholders pursuant to the Offer is fair
from a financial point of view. In addition, the support agreement includes a
non-solicitation covenant on the part of PSiGate and a right in favour of Home
Capital to match any competing offer.
    Anthony Palumbo, the President and Chief Executive Officer of PSiGate,
and Robert Fenos, the Chief Operating Officer of PSiGate, have irrevocably
agreed to tender all of their Shares to the Offer. Mr. Palumbo owns 2,817,318
Shares and 314,000 options to purchase Shares, and Mr. Fenos directly and
indirectly owns 1,816,607 Shares and 264,000 options to purchase Shares, which
in aggregate represent approximately 45.4% of the outstanding Shares on a
fully diluted basis.
    The Offer will be conditional upon acceptance by holders of not less than
66 2/3% of PSiGate's Shares as well as receipt of all necessary regulatory
approvals and other customary conditions. Home Capital expects that a
take-over bid circular containing the terms of the Offer will be mailed to
Shareholders, together with a PSiGate Board of Directors' circular and other
related documents, in the near future.

    About Home Capital

    Home Capital Group Inc. is a holding company, publicly traded on the
Toronto Stock Exchange (HCG), operating through its principal subsidiary, Home
Trust Company. Home Trust is a federally regulated trust company offering
deposit, mortgage lending, retail credit and credit card issuing services.
Licensed to conduct business across Canada, Home Trust has offices in Ontario,
Alberta, British Columbia, Nova Scotia and Quebec.

    About PSiGate

    PSiGate empowers businesses on the Internet by providing secure,
cost-effective and trusted e-commerce solutions. PSiGate provides an easy and
seamless interface to new or existing online storefronts, offering a reliable
means of both real-time and batch payment collection and financial transaction
processing. PSiGate provides Internet Merchant Accounts (Merchant IDs) for
North American based businesses. As at the date of this press release, PSiGate
has 10,574,469 common shares outstanding and 914,000 options to purchase
common shares.

    This document may contain forward-looking statements, relating to Home
Capital's or PSiGate's operations or to the environment in which it operates,
which are based on the respective company's operations, estimates, forecasts
and projections. These statements are not guarantees of future performance and
involve risks and uncertainties that are difficult to predict, and/or are
beyond such company's control. A number of important factors could cause
actual outcomes and results to differ materially from those expressed in these
forward-looking statements. These factors include those set forth in other
public filings. Consequently, readers should not place any undue reliance on
such forward-looking statements, whether as a result of new information,
future events or otherwise.

    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.

For further information:

For further information: Gerald M. Soloway, President & CEO, or Nick
Kyprianou, Sr. Vice President & COO, Home Capital Group Inc., (416) 360-4663,
www.homecapital.com; Anthony Palumbo, President & CEO, Payment Services
Interactive Gateway Corp. (PSiGate), (905) 567-4000 ext. 241, www.psigate.com

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