VenGrowth Private Equity Partners Inc. today confirmed a successful exit of its investment in Travelers Leasing Corp. (TLC) following the completion of an acquisition by Bank of Nova Scotia. Full terms of the transaction have not been disclosed.

VenGrowth was 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.

Under the terms of the acquisition, the VenGrowth Funds secured a significant positive return just three years after their investment. A further contingent payment from the acquisition is scheduled to be paid to the Funds in three years time. VenGrowth ultimately expects a return of many times its investment in TLC.

The VenGrowth 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.

“The exit of TLC is an excellent example of the upside that can be generated by securing an equity stake alongside the debt portion of a mezzanine investment,” said Graham McBride, VenGrowth managing general partner. “The VenGrowth Funds and their shareholders stand to benefit further from this successful transaction, with a future milestone payment scheduled.”

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.

“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 McBride.