VenGrowth Private Equity Partners Inc. today announced that it has successfully exited its investment in merchandising systems manufacturer McCowan Manufacturing Ltd.

McCowan has repaid all of the capital originally invested by VenGrowth. At the same time, McCowan also made an additional payment to repurchase the minority equity position held by VenGrowth. The exit, completed ahead of schedule, generated an internal rate of return in excess of VenGrowth’s initial target, the venture capital firm says.

In January, 2006, The VenGrowth Traditional Industries Fund Inc., The VenGrowth III Investment Fund Inc. and VG Mezzanine I Limited Partnership provided a $4.5 million subordinated loan to finance the acquisition of McCowan.

Over the last two years, Vengrowth says McCowan has grown both revenues and EBITDA (Earnings before interest, tax, depreciation and amortization).

“The funds have benefited from McCowan’s steady financial and operational performance, and we felt this was an opportune time to crystallize our equity appreciation in the company. The return achieved on the investment exceeded our initial expectation,” said Michael Wolfe, general partner, VenGrowth. “A significant portion of the return was generated as a result of structuring the investment with equity participation.”