Capital Raising Press Release
|American Capital Prices Public Offering of Common Stock|
Bethesda, MD – June 19, 2007 – American Capital Strategies Ltd. (“American Capital” or the “Company”) (Nasdaq: ACAS) announced today it has priced its public offering of 20 million shares of its common stock at $45.05 per share. Of those shares, 15 million shares are being offered directly by the Company and 5 million shares are being offered by Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporatedand Wachovia Capital Markets, LLC or certain of their respective affiliates (the “Counter-Parties” and each, a “Counter-Party”) in connection with agreements to purchase common stock from American Capital at a future date, as discussed below. American Capital has granted the underwriters an option to purchase up to an additional 3 million shares of common stock to cover over-allotments. The offering is subject to customary closing conditions and is expected to close on Friday, June 22, 2007.
Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wachovia Capital Markets, LLC are the joint-lead book-running managers for the offering. Morgan Stanley & Co. Incorporated and UBS Securities LLC are the co-lead managers and A.G. Edwards & Sons, Inc. and RBC Capital Markets Corporation are co-managers for the offering.
The offering will be made under American Capital's existing shelf registration statement filed with the Securities and Exchange Commission. In connection with the offering, American Capital will enter into agreements (the "Forward Sale Agreements") with the Counter-Parties under which American Capital will agree to sell to the Counter-Parties in the aggregate 5 million shares of common stock (or a smaller number of shares) at the same offering price per share (the “Offering Price”) as the 15 million shares being offered directly by American Capital in this offering, subject to certain adjustments. The timing of these sales, which must occur within the next year, will generally be determined by American Capital. The Company will physically settle each Forward Sale Agreement by delivering shares of common stock to the Counter-Party under the relevant Forward Sale Agreement and such Counter-Party will deliver the Offering Price subject to certain adjustments to the Company upon each settlement. In connection with hedging their respective exposures under the Forward Sale Agreements, the Counter-Parties are expected to borrow from third party lenders and sell in the aggregate 5 million (or such smaller number of shares that they are able to borrow) of the offered shares of the Company's common stock at the close of this offering at the Offering Price.
American Capital expects to use substantially all of the net proceeds of approximately $645 million from the direct sale of 15 million shares of common stock for general corporate purposes, including for the Company’s investment and lending activities and to repay indebtedness owed under existing revolving credit facilities. American Capital expects to use substantially all of the net proceeds from the shares of common stock being offered pursuant to the Forward Sale Agreements, which initially are valued at approximately $215 million, subject to certain adjustments, for general corporate purposes, including for the Company’s investment and lending activities and to repay indebtedness owed under existing revolving credit facilities. Reducing borrowings under the revolving credit facilities will create availability under the facilities, which will generally be used for funding future American Capital investments and general corporate purposes.
This press release is neither an offer to sell nor a solicitation of an offer to buy shares of common stock. The offering of these securities will be made only by means of a prospectus and a related prospectus supplement. When available, copies of the prospectus and prospectus supplement may be obtained from Merrill Lynch & Co., 4 World Financial Center, New York, NY 10080, Citi Markets and Banking, 140 58th Street, 8th Floor, Brooklyn, New York 11220, (telephone number: 718-765-6732) or Wachovia Capital Markets, LLC, 375 Park Avenue, New York, New York 10152-4077, Attn: Equity Syndicate, email@example.com.
ABOUT AMERICAN CAPITAL
American Capital is the second largest U.S. publicly traded alternative asset manager with $12 billion in assets under management (second to Fortress (NYSE: FIG)). American Capital, both directly and through its global asset management business, is an investor in management and employee buyouts, private equity buyouts, and early stage and mature private and public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital and its affiliates invest from $5 million to $800 million per company in North America and €5 million to €500 million per company in Europe.
This press release contains forward-looking statements. The statements regarding expected results of American Capital are subject to various factors and uncertainties, including the uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, or changes in the conditions of the industries in which American Capital has made investments.
SOURCE: American Capital Ltd.www.americancapital.com
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