CAE closes acquisition of MultiGen-Paradigm

Montreal, May 14, 2007 – (NYSE: CGT; TSX: CAE) – CAE announced today that it has closed the agreement with Parallax Capital Partners, LLC and others to acquire MultiGen-Paradigm Inc., for US$16 million (C$18 million) in cash.

The agreement, announced on April 20, was subject to U.S. government approvals, which have been obtained.

This acquisition of MultiGen-Paradigm, the past acquisition of TERREX, and the recent acquisition of control of Engenuity will be combined with some of CAE’s internal resources to create a single, integrated, commercial-off-the-shelf (COTS) software business, growing the Company’s modelling and simulation abilities.

MultiGen-Paradigm is a leading supplier of real-time, COTS software for creating and visualizing simulation solutions. The company’s core products include MultiGen Creator^TM, a simulation software toolset for real-time 3D modelling, terrain, and synthetic environment creation; Creator Terrain Studio^TM, a software framework that helps manage the synthetic environment creation process; Vega-Prime^TM, software designed for the rapid creation and deployment of real-time 3D simulation applications; and Lyra^TM, a visual simulation application that provides plug-and-play compatibility for various image generators. In addition, MultiGen-Paradigm created and continues to develop industry standard visual simulation file formats, including OpenFlight and MetaFlight. The company presently has more than 3,000 customers.

CAE is a world leader in providing simulation and modelling technologies, and integrated training services to the civil aviation industry and defence forces around the globe. We design, manufacture and supply simulation equipment and offer training and services. This includes integrated modelling, simulation and training solutions for commercial airlines, business aircraft operators, aircraft manufacturers and military organizations and a global network of training centres for pilots, and in some instances, cabin crew and maintenance workers.

With annual revenues of over C$1 billion, CAE operates in 19 countries around the world. CAE has sold nearly 700 simulators and training devices to airlines, aircraft manufacturers, training centres and defence forces for air and ground purposes in more than 40 countries. We have over 110 full-flight simulators in more than 20 aviation training centres, serving approximately 3,500 airlines, aircraft operators and manufacturers across the globe. CAE licenses its simulation software to various market segments and has a professional services division assisting customers with a wide range of simulation-based needs.