|American Capital Prices Public Offering of Common Stock|
Bethesda, MD - March 23, 2005 - American Capital Strategies Ltd. ("American Capital" or the "Company") (Nasdaq:ACAS) announced today it has priced its public offering of 8,700,000 shares of its common stock at $31.50 per share. Of those shares, 700,000 shares are being offered directly by the Company and 8,000,000 shares are being offered by the Counter-Parties (as defined below) in connection with agreements to purchase common stock from American Capital at a future date (the "Forward Sale Agreements"), as discussed below. American Capital has granted the underwriters an option to purchase up to an additional 1,300,000 shares of common stock to cover over-allotments. The offering is subject to customary closing conditions and is expected to close on Tuesday, March 29, 2005.
Citigroup Global Markets Inc., Wachovia Capital Markets, LLC, Friedman, Billings, Ramsey & Co., Inc., J.P. Morgan Securities Inc., BB&T Capital Markets, a division of Scott & Stringfellow, Inc., and Piper Jaffray & Co. are the underwriters for the offering. The joint book-running managers for the offering are Citigroup Global Markets Inc. and Wachovia Capital Markets, LLC.
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 entered into the Forward Sale Agreements with Citigroup Global Markets Inc., an affiliate of Wachovia Capital Markets, LLC and an affiliate of J.P. Morgan Securities Inc. (the "Counter-Parties"), under which the Counter-Parties agreed to borrow from third party market sources and sell to retail and institutional investors 8,000,000 of the offered shares of the Company's common stock at the close of this offering at the same offering price (the "Offering Price") as the 700,000 shares being offered directly by American Capital. Under the Forward Sale Agreements, the Counter-Parties agreed to purchase from American Capital and American Capital agreed to sell to them 8,000,000 shares of common stock at the Offering Price per share, less 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 all transactions under the Forward Sale Agreements by delivering shares of common stock and the Counter-Parties will deliver the Offering Price less certain adjustments upon each settlement.
American Capital expects to use substantially all of the net proceeds of approximately $21 million from the direct sale of 700,000 shares of common stock to reduce the borrowings under the Company's existing revolving credit facilities and to fund investments. 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 $241 million, subject to certain adjustments, primarily to reduce the borrowings under the Company's existing revolving credit facilities and to fund investments. These repayments 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 Citigroup Global Markets Inc., 140 58th Street, 8th Floor, Brooklyn, New York 11220 (telephone number: 718-765-6732) or Wachovia Capital Markets, LLC at 7 Saint Paul Street, 1st Floor, Baltimore, MD 21202.
ABOUT AMERICAN CAPITAL
American Capital is a publicly traded buyout and mezzanine fund with capital resources of more than $4.9 billion. American Capital is an investor in and sponsor of management and employee buyouts, invests in private equity sponsored buyouts and provides capital directly to private and small public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations.
This press release contains forward-looking statements. The statements regarding expected results of American Capital Strategies 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 and international economic conditions, and 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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