Golden Gate Capital to acquire Sierra Systems Group Inc. for approximately $93.2 million, cash price of $9.25 per share

SAN FRANCISCO, CA, AND VANCOUVER, BC (October 16, 2006) – Golden Gate Capital, a private equity firm focused on investing in high growth businesses in change intensive industries, and Sierra Systems Group Inc. (TSX:SSG), today announced they have reached a definitive agreement for Golden Gate Capital to acquire Sierra Systems in an all-cash transaction valued at $9.25 per share, or approximately $93.2 million, pursuant to a plan of arrangement.

The agreement has received unanimous approval from Sierra’s Special Committee and Board of Directors. TD Securities Inc. and Capital West Partners acted as financial advisors to the Special Committee. The Special Committee also received a fairness opinion from TD Securities Inc. The parties anticipate closing the transaction on January 5, 2007. The closing is subject to customary conditions including Sierra shareholder and court approval of the plan of arrangement.

The $9.25 purchase price represents a premium of 29 percent on the 30 day volume weighted average trading price of Sierra’s shares on the TSX.

Commenting on the transaction, Iraj Pourian, President and CEO of Sierra Systems said, “Today’s announcement provides outstanding opportunity for all our key stakeholders. For our employees and our clients, this proposed transaction and the resources available through it provide a clear long-term future for our business and a strong foundation on which to grow our B.C. based company. This transaction, once completed, will be a significant step in the execution of our strategy. We have positioned our company for growth and we will have the financial resources and access to new markets to capitalize on that potential. We look forward to our relationship with Golden Gate Capital, and we are confident that their successful track record in growing businesses and opportunities offered within their company portfolio will significantly benefit all our stakeholders.”

Peter Webb, Chairman of Sierra Systems added,”The Board is very pleased with the value created for shareholders. After a full market canvas, we have achieved an offer price of $9.25 per share which represents fair value and a significant premium over the last 30-day average trading price of our shares.”

“We are pleased to have the opportunity to invest in a company with as strong a history as Sierra Systems,” said David Dominik, a Managing Director at Golden Gate Capital. “For over 40 years, Sierra Systems has helped clients achieve their business objectives with its world-class consulting staff. We are looking forward to working with the management team in taking the company to its next stage of growth and leadership in the information technology and business consulting services markets.”

Sierra’s largest shareholder, Crescendo Partners, has expressed its full support for this transaction and has agreed to vote its 1,014,467 shares in favour of the plan of arrangement.

About Golden Gate Capital

Golden Gate Capital is a San Francisco-based private equity investment firm with approximately $2.8 billion of capital under management. Golden Gate Capital is dedicated to partnering with world-class management teams to invest in change-intensive, growth businesses. Golden Gate targets investments in situations where there is a demonstrable opportunity to significantly enhance a company’s value. The principals of Golden Gate Capital have a long and successful history of investing with management partners across a wide range of industries and transaction types. For more information, please visit www.goldengatecap.com.

About Sierra Systems

Since 1966, Sierra Systems Group Inc. (TSX:SSG) has been improving the operational performance of our clients by delivering superior information technology and business consulting services. Through our extensive experience in Business Consulting, Solutions Delivery, and Managed Services, Sierra Systems has emerged as a trusted advisor to many leading private and public sector organizations across North America. With offices in Austin, Calgary, Edmonton, Fredericton, Halifax, Hartford, Los Angeles, Olympia, Ottawa, Seattle, Toronto, Vancouver, Victoria, and Winnipeg, our consultants are never far from our clients. In Justice, Health, Government, and various other industries, Sierra Systems continues to win exciting engagements in the face of stiff competition. Visit us at www.sierrasystems.com.