|American Capital Completes Sale of People Media, Receives $57 Million in Cash Proceeds and Realizes $15 Million Gain|
Bethesda, MD – July 16, 2009 – American Capital Ltd. (Nasdaq: ACAS) announced that, on July 13, it completed the sale of its portfolio company People Media to Match.com, an operating business of IAC. American Capital received $57 million in cash proceeds and realized a gain of $15 million in the third quarter from the transaction. American Capital’s compounded annual rate of return was 30%, including dividends, interest and fees earned over the life of the investment. Including investments in People Media by American Capital’s affiliated funds under management, the inception to date realized gains were $26 million and the compounded annual rate of return was 35%. The proceeds received by American Capital were greater than the first quarter 2009 valuation of the investment by $6 million, or 11%.
American Capital and its affiliates invested $56 million in a senior term loan, senior subordinated debt and preferred equity in People Media, formerly Zencon Technologies LLC, in May 2007.
Including the sale, American Capital received 2.7 times its equity investment, and realized a compounded annual rate of return of 76% over the life of its equity investment, including dividends and fees.
“The sale of People Media is an excellent outcome for American Capital, creating strong returns for American Capital and its funds under management,” said Miles Arnone, Managing Director, Technology Group. “Throughout our two year investment, the company has achieved significant objectives, including launching a partnership with AOL Personals, which have assisted in solidifying its leading position in the targeted online dating market. As an even stronger company now, we believe People Media will continue to thrive under the leadership of its new owner.”
People Media is the leading provider of targeted online dating communities. The company’s 27 focused dating websites enable adults to meet online in a safe and convenient setting and participate in a community, become friends, date, establish long-term relationships or marry. The company’s websites are focused on specific demographic groups and include BlackPeopleMeet.com, SingleParentMeet.com, SeniorPeopleMeet.com, BBPeopleMeet.com and LDSPlanet.com, with a combined 255,000 paying subscribers.
“Since 2007, the American Capital Technology Group has worked closely with People Media and the management team to transform the company from an entrepreneurially run business to an enterprise with improved controls, infrastructure and growth prospects,” said Will Rudat, Vice President, Technology Group.
Since American Capital’s August 1997 IPO through the first quarter of 2009, the company has earned a 16% compounded annual return, including interest, dividends, fees and net gains, on 255 realizations of senior debt, subordinated debt and equity investments, totaling $11 billion of committed capital. These realizations represent 48% of all amounts invested by American Capital since its August 1997 IPO. Proceeds from these realizations exceeded the total associated prior quarter valuation of the investments by less than 1%. American Capital earned a 29% compounded annual return on the exit of its equity investments, including dividends, fees and net gains.
For a chart showing American Capital’s exited portfolio companies, please go to http://www.americancapital.com/our_portfolio/exited.html.
ABOUT AMERICAN CAPITAL TECHNOLOGY GROUP
The American Capital Technology Group invests in early, middle and late stage technology companies. With the flexibility to invest in equity and debt from $5 million to $400 million, the American Capital Technology Group can provide its capital base and domain expertise to build category-leading, technology companies. These companies generally are mature, high performing, cash flowing companies with excellent growth rates. They operate across many industry sectors and are driven by a broad range of technologies. The Technology Group extends American Capital's existing technology investment business by investing in earlier stage technology companies.
ABOUT AMERICAN CAPITAL
American Capital is a publicly traded private equity firm and global asset manager. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate and structured products. Founded in 1986, American Capital has $11 billion in capital resources under management1 and ten offices in the U.S., Europe and Asia. For further information, please refer to www.AmericanCapital.com.
1 As of March 31, 2009.
Performance data quoted above represents past performance of American Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in American Capital will likely fluctuate. Consequently, an investor's shares, when sold, may be worth more or less than their original cost. Additionally, American Capital's current performance may be lower or higher than the performance data quoted above.
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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