GrowthWorks Canadian Fund Ltd. and Canadian Medical Discoveries Fund Inc. have entered into a non-binding letter of intent regarding a proposed merger of Canadian Medical Discoveries Fund into GrowthWorks Canadian Fund, the two funds announced on Friday.

The funds will examine the possibility and the suitability of a merger and work towards settling the terms of a definitive merger agreement.

The letter of intent contemplates a transaction structure whereby GrowthWorks Canadian Fund would purchase the assets of Canadian Medical Discoveries Fund in exchange for Class A shares of GrowthWorks Canadian Fund that would be distributed to Canadian Medical Discoveries Fund shareholders.

Should a definitive merger agreement is signed, required approvals are obtained and other conditions are satisfied, the proposed merger would be completed during the second quarter of 2009.

The proposal is subject to a number of conditions including regulatory approvals, final approval of the boards of directors and shareholders of both funds and the negotiation of final definitive agreements.

There can be no assurance that a merger transaction will ultimately be completed, the funds said.

GrowthWorks manages approximately $800 million in assets through the Working Opportunity Fund (EVCC) Ltd., GrowthWorks Atlantic Venture Fund Ltd., GrowthWorks Commercialization Fund Ltd. and GrowthWorks Canadian Fund Ltd.

Canadian Medical Discoveries Fund Inc. is one of Canada’s most mature health sciences retail venture capital funds, with approximately $120 million in managed assets.

IE