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$450 Million Halyard Capital Fund Launched by BMO Nesbitt Burns to Invest in U.S. Media, Telecom and Internet Companies

Business Wire, July 19, 2000

Business Editors

NEW YORK--(BUSINESS WIRE)--July 19, 2000

New Merchant Banking Fund to be Cornerstone of Leading Canadian

Investment Bank's Expansion in U.S.

BMO Nesbitt Burns, the investment banking division of Bank of Montreal (TSE; NYSE: BMO), announced today the launch of its Halyard Capital Fund with an initial commitment of US$450 million. The new fund signals a major expansion of BMO Nesbitt Burns' merchant banking activities in the U.S. media, telecom and Internet sectors.

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"The Halyard Capital Fund will serve as the primary vehicle for building our merchant and investment banking business in the U.S.," said Robert B. Nolan, Jr., Executive Managing Director and Head of Global Media and Telecom Merchant Banking. "Media and telecommunications have always been our team's principal focus, and expanding our investment activities in these high growth areas is key to BMO Nesbitt Burns' future strategy."

The Halyard Capital Fund will invest in emerging, high growth and established media and communications companies, including new media and all related Internet infrastructure and Internet service companies. Types of investments will include direct private equity, mezzanine debt, and investments in private equity funds managed by others.

The new fund will seek investments of $2 million to $30 million, with most likely to fall in the $5 to $15 million range. Investments will be made in various stages from "early" (typically the first institutional round of financing), to late-stage and pre-IPO, to investments in existing public companies.

"Clients today in our target sectors are demanding a full suite of products and services from their financial intermediaries," said Bruce Eatroff, Executive Managing Director and Head of U.S. Media and Telecommunications. "With our long and successful track record in the media and telecommunications sector, our strategic advisory capabilities, and the formidable financial resources of Bank of Montreal to draw on, we expect to become a preferred capital partner for our clients."

"With the Halyard Capital Fund now in place, we will be able to leverage our team's expertise in media and telecom, and increase both the number and size of investments we make in these sectors," he added.

The seven person team that is the core of BMO Nesbitt Burns' investment and merchant banking operations in the U.S. was hired as a unit in April from CIBC World Markets. In addition to Mr. Nolan and Mr. Eatroff, the team includes Christopher H. Ruth, Timothy M. Brown, James T. Slater, Andrew S. Zamfotis and Faisal Khalid. BMO Nesbitt Burns' U.S. operations are based in New York City and Chicago.

Mr. Nolan previously managed the U.S. media and telecommunications investment banking business for CIBC World Markets. He has more than a dozen years of experience providing financial advice and capital raising services to the media and telecommunications sectors, and previously held senior positions in investment banking with UBS Securities and Goldman, Sachs. He is a graduate of Georgetown University and Fordham University Law School.

Prior to his senior position in U.S. media and telecommunications investment banking with CIBC World Markets, Mr. Eatroff spent several years at UBS Securities and Goldman, Sachs, and has broad international capital raising and advisory experience as well. He holds an MBA from The Wharton School and a BA from Lafayette College.

The investment and corporate banking businesses of BMO Nesbitt Burns are part of Bank of Montreal's Investment Banking Group. BMO Nesbitt Burns offers a broad range of products and services such as underwriting, corporate lending, mergers and acquisitions, research, sales, and trading. In Chicago, Harris Nesbitt Burns offers a full range of corporate and investment services to the Midwest mid-market. In 1999, Bank of Montreal's Investment Banking Group generated almost US$1.8 billion in revenue and net income of US$426 million.

In addition, BMO Nesbitt Burns' Private Client Division employs approximately 1,400 Investment Advisors who draw on the firm's top-ranked research and broad range of products and services to meet the specific investment objectives of individual clients.

Bank of Montreal, Canada's first bank, is a highly diversified financial services institution. The bank operates more than 30 lines of business within its group of companies, including BMO Nesbitt Burns, one of Canada's largest full-service investment firms, and Chicago-based Harris Bank, a major U.S. Midwest financial services provider. Bank of Montreal has an equity position in, and a strategic alliance with, Grupo Financiero Bancomer, the largest retail bank in Mexico.

Business Services Industry

$450 Million Halyard Capital Fund Launched by BMO Nesbitt Burns to Invest in U.S. Media, Telecom and Internet Companies

Business Wire, July 19, 2000

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