CAE Inc. to acquire Engenuity Technologies Inc.

Montreal, February 12, 2007 – Engenuity Technologies Inc. (TSX: EGY) and CAE Inc. (NYSE: CGT; TSX: CAE) announced today that they have executed a support agreement under which CAE has agreed to offer to purchase all of the outstanding common shares of Engenuity Technologies for CDN$1.20 per share, payable in cash. CAE has also entered into lock-up agreements with certain shareholders which provides for an irrevocable commitment that they tender all of the 13,282,780 shares they hold in total, representing 69.8% of the outstanding shares of Engenuity Technologies on a fully diluted basis, in favour of CAE’s offer. The Board of Directors of Engenuity Technologies has unanimously resolved to recommend that shareholders accept the offer. The offer price represents a premium of 14% based on the weighted volume average closing price for Engenuity Technologies common shares on the Toronto Stock Exchange for the last 20 trading days.

The proposed transaction represents an enterprise value of CDN$23 million after taking into account outstanding options as well as the cash, working capital, securities and debt on Engenuity Technologies’ balance sheet as at September 30, 2006.

“The acquisition of Engenuity Technologies is another step in our growth strategy in our military business,” says Marc Parent, Group President, Simulation Products and Military Training & Services, CAE. “Over the last two years we have increased our presence in modelling and simulation through our research and development efforts under Project Phoenix and through the purchase of Greenley and Associates, TERREX and Kesem. Engenuity will add new technologies, an established customer base, and effective sales channels to accelerate our growth initiatives. These benefits are a testimony to the quality of the people working at Engenuity today.”

Engenuity Technologies develops commercial-off-the-shelf (COTS) simulation and visualization software for the aerospace and defence markets. The company’s core products include VAPS, a software product used by aircraft and automobile designers to create models and simulations of cockpit displays; STAGE, a simulation toolkit used to create and interconnect simulation environments; and AI.implant, an artificial intelligence (AI) tool used to model individual and crowd behavior for military simulations and the gaming industry. Engenuity Technologies recently acquired AcuSoft, a modelling and simulation products and services company based in Orlando, Florida, with a strong client base in the US Army and Marine community. Engenuity Technologies is based in Montreal with offices in Orlando, Atlanta, London, Paris and Düsseldorf as well as a worldwide distributor network, and employs approximately 120 people.

“We are very enthusiastic about joining a global leader in modelling, simulation and training,” said Patrice Commune, President and Chief Executive Officer, Engenuity Technologies. “With its 60 years of experience and leading-edge products, CAE sets the standard in terms of innovation.”

The take-over bid circular is expected to be mailed to Engenuity Technologies shareholders within the next two weeks together with Engenuity Technologies’ Directors’ circular confirming that CAE’s bid is in the best interest of Engenuity Technologies and its shareholders and their recommendation that shareholders accept the offer. The transaction is expected to close in April 2007.

The offer and the making thereof will be subject to certain conditions, including completion of satisfactory due diligence by CAE with respect to Engenuity Technologies’ AcuSoft division, there being validly deposited and not withdrawn the number of common shares that constitutes at least 66.67% (on a fully-diluted basis), all required approvals being obtained and other customary conditions.

The support agreement between Engenuity Technologies and CAE provides for a break-up fee in the event that, among other things, the Board of Directors of Engenuity Technologies changes its recommendation in favour of a competing bid under certain circumstances.