The Carlyle Group to Acquire Visual Effects Software Developer The Foundry from Advent Venture Partners

London - Global alternative asset manager The Carlyle Group (“Carlyle”) announced today that it has acquired a significant majority stake in The Foundry Visionmongers Ltd (“The Foundry”), a developer of visual effects (VFX) software, from Advent Venture Partners (“Advent”) and other stakeholders. Falcon Investment Advisors, LLC (“Falcon”) has converted its current ownership in The Foundry into mezzanine notes in support of the acquisition. The founders and management will continue to retain a significant minority stake and drive the continued growth and customer-focused innovation that the Company has consistently delivered. Financial terms of the transaction were not disclosed.

Headquartered in London with more than 100 employees, The Foundry has established itself as a critical technology partner to the major feature film studios and post production houses in the US and UK. The Foundry’s products have been used to make recent “must see” movies including Avatar, Tron: Legacy, Alice in Wonderland, The King's Speech, 127 Hours and Black Swan - all award winners or nominees.

Carlyle will support The Foundry’s expansion and invest to develop their specialized product offerings. Furthermore, this investment will facilitate the company’s diversification into other adjacent market arenas as the product range continues to evolve and grow.

Commenting on the transaction, Dr. Bill Collis, CEO of The Foundry said, “Carlyle’s financial strength, extensive network, and track record in the management of software companies are great assets to our business. We’re exceptionally proud of our achievements over the past two years and have benefited significantly from the deep insight and timely guidance provided by Advent. We look forward to partnering with Carlyle and seeking new opportunities in current and new markets as we continue to progress and innovate.”

Michael Wand, managing director and co-head of Carlyle’s European Technology Partners team (CETP), said, “We have been impressed by the high quality of the products and talented management team, and are confident in the excellent growth potential of The Foundry. Carlyle is delighted to be partnering with The Foundry to support the next phase of growth consisting of further international expansion, ongoing product diversification and broadening the application scope for VFX technologies, whilst sustaining its focus on innovation and customer satisfaction.”

Since the management buyout of the Company in June 2009, the management team and founders have worked closely with Advent and Falcon to transform the Company from a best-of-breed plug-in developer to the leading industry VFX software provider through a combination of unique product partnerships, sales execution, channel development and global expansion. During this period, headcount tripled from 35 to more than 100 and growth accelerated, with revenue increasing from £6.1 million to £14.9 million in 2010. The Company expanded its now 4,000-strong customer base to include The Moving Picture Company (MPC), Prime Focus, Dreamworks, Industrial Light and Magic (ILM), Framestore, Cinesite, Double Negative and several other high-end facilities.

Mike Chalfen, General Partner at Advent Venture Partners, commented, “This transaction highlights the high quality growth equity opportunities available in European tech. The Foundry has become the global leader in its market, produced phenomenal revenue and profit growth, and executed ambitious product acquisition and channel development plans. To exceed expectations on all these dimensions required a clear view of where value would be created, and a strong leadership team to sustain tremendous commitment throughout the organisation.”

Equity for this investment will come from Carlyle Europe Technology Partners (CETP) II, a €530 million fund that closed in November 2008. Since 2002, Carlyle’s European Technology team has acquired and invested in 20 companies, supporting their growth, expansion and business transformation initiatives in the technology space.

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Advisors
Arma Partners LLP acted as financial advisors and Morrison & Foerster LLP acted as legal advisors to The Foundry. Carlyle was advised by Travers Smith LLP.

The Foundry management were represented by Clark Holt.

Contacts
The Carlyle Group
Roderick (Rory) MacMillan
+44 20 7894 1630

Advent Venture Partners
Josephine Salm, Grayling
+44 20 7592 7930

The Foundry
Lucy Cooper
+44 20 7968 6828

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About The Foundry
The Foundry is a world-leading innovator of visual effects and image processing technologies that boost productivity in motion picture and video post-production.

The Foundry is at the cutting edge of software development, marketing and sales for visual effects compositing. In 2007, the Academy of Motion Picture Arts and Sciences awarded a Sci-Tech Award® to The Foundry’s development team for the Furnace image processing suite and the company now holds two products with AMPAS Sci-Tech Award® winning technology including high-end compositing system Nuke.

The Foundry has a well-established client base that includes leading visual effects facilities worldwide, such as Warner Bros, The Moving Picture Company, Weta Digital, Framestore, Sony Pictures Imageworks and Digital Domain.

In 2010, The Foundry received a Distinguished Honoree medal in The 2010 International Business Awards (‘The Stevies’) as the Most Innovative Company of the Year in Europe. The company also made The Sunday Times Microsoft Tech Track 100 and The Guardian’s 2010 Tech Media Invest Top 100.

The Foundry is headquartered in London, and has offices in Los Angeles.
www.thefoundry.co.uk

About The Carlyle Group
The Carlyle Group is a global alternative asset manager with $97.7 billion of assets under management committed to 76 funds as of September 30, 2010. Carlyle invests across three asset classes - private equity, real estate and credit alternatives - in Africa, Asia, Australia, Europe, North America and South America focusing on aerospace & defense, consumer & retail, energy & power, financial services, healthcare, industrial, infrastructure, technology & business services, telecommunications & media and transportation. Since 1987, the firm has invested $64.7 billion of equity in 1015 transactions. The Carlyle Group employs more than 900 people in 19 countries. As of June 30, 2009, in the aggregate, Carlyle portfolio companies have more than $84 billion in revenue and employ more than 398,000 people around the world. Web: www.carlyle.com; Video: www.youtube.com/OneCarlyle

About Advent Venture Partners
Advent Venture Partners invests in technology and life sciences businesses run by great teams that want a pragmatic and well-connected partner by their side.

Top tier growth equity investors, Advent’s technology team backs highly differentiated and capital efficient technology-driven businesses in digital media, e-commerce, software and services. Our investments include: Cartesis, a growth capital software investment acquired by Business Objects for $300 million; Zong, a leading mobile payments solutions provider; Vitrue, a social media management software provider; Fizzback, a company offering a highly differentiated Customer Engagement Platform; and Farfetch.com, an online fashion marketplace for independent fashion boutiques.
www.adventventures.com

About Falcon Investment Advisors
Falcon Investment Advisors, LLC is a leading provider of mezzanine and private equity capital in support of buyouts, growth and acquisition programs, recapitalizations and restructurings. Its principals have supported over 100 portfolio companies with mezzanine and equity capital over a twenty-four year period. With over $1.1 billion of assets under management, Falcon is an experienced and resourceful junior capital partner to middle market companies and their sponsors.
www.falconinvestments.com

© The Foundry, its logo and product names are registered trademarks in the UK, USA and/or other countries. Academy Award is a registered trademark of the Academy of Motion Picture Arts and Sciences. All other trademarks contained herein are the property of their respective owners.