CAE acquires Terrain Experts, Inc.

MONTREAL, Quebec, 24 May 2005. CAE announced today it has closed the acquisition of Terrain Experts, Inc., a leading developer of software tools for simulation database generation and visualization, for approximately US$10 million paid in CAE common shares.

May 25th, 2005

MONTREAL, Quebec, 24 May 2005. CAE announced today it has closed the acquisition of Terrain Experts, Inc., a leading developer of software tools for simulation database generation and visualization, for approximately US$10 million paid in CAE common shares.

Terrain Experts, known in the military market as TERREX, develops commercial- off-the-shelf (COTS) simulation software that makes database development simpler and more accessible to the entire simulation market. The company's product line includes the Terra Vista and SOFViz applications used extensively for real-time 3-D image generation, battlefield visualization, and mission rehearsal. TERREX is based in Tucson, Ariz., and employs approximately 40 people.

"CAE is very pleased to welcome TERREX, which we targeted for its very successful COTS software business model and market-leading software products," said Bruce Miles, CAE's vice president of Business Development. "CAE is committed to developing and offering COTS software to the market throughout our suite of modelling and simulation software."

TERREX will operate from its facility in Tucson and continue offering its entire suite of COTS software, including service and support. Engineering and development teams from TERREX and CAE have already begun looking at ways to integrate some of CAE's leading-edge simulation and database software tools, such as CAE Lithos and CAE STRIVE, into the TERREX product line.

"We have more than 700 customers worldwide using TERREX software and we see great opportunities to offer them additional value in the form of new features and products from CAE's impressive technology base," said Norman Miller, president of Terrain Experts, Inc. "Government and military customers are demanding software products that are fully-featured, easy-to-use, and above all, not proprietary to a single contractor. TERREX built its business on developing COTS software and this combination with CAE should produce world-class, commercially available simulation software and development tools."

CAE is a provider of simulation and modelling technologies as well as integrated training services for commercial and business aviation, and defence customers worldwide. The company has annual revenues of approximately C$1 billion, with operations and training facilities in 17 countries on five continents. For more information, see www.cae.com.

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