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American Capital Invests in Dental Practice Management Company

Bethesda, MD - November 20, 2006 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has invested in Small Smiles Holding Company LLC, a holding company formed to acquire Sanus Holdings Inc., a leading dental practice management company. American Capital’s investment takes the form of senior subordinated debt, holding company PIK notes and common equity and supports the acquisition of Sanus by affiliates of Arcapita Inc. and the Company’s senior management. A syndicate led by CIT Group Inc. (NYSE: CIT) has arranged a revolving credit facility and a senior term loan. The Company’s management team and private investors are investing in the equity of Small Smiles.

“This is our second time partnering with Arcapita, a proven equity sponsor,” said American Capital Regional Managing Director Darin Winn. “Through our flexible financing package, we are joining with Arcapita to support a highly successful healthcare management team. We believe in the team and feel confident in their knowledge of the business and their operational and strategic expertise to implement improvements and execute the growth strategy.”

American Capital has invested directly and through its funds under management $6.5 billion in the last twelve months, $5.7 billion year to date and $1.2 billion quarter to date. Not including funds under management, American Capital has invested $5.1 billion in the last twelve months, approximately $4.4 billion year to date and $925 million quarter to date.

“We are extremely delighted to support the acquisition of Sanus, a leading dental practice management company,” said American Capital Managing Director Jeff MacDowell. “Sanus’ unique business model is driven by a strong management team and experienced and talented employees, dentists and dental staff.”

“Sanus has experienced growth in new markets over the last few years and is positioned to continue this growth going forward,” said American Capital Vice President Adam Stern. “The Company continues to be successful in opening new clinics in underserved markets.”

Sanus’ affiliated dental practices provide dental procedures including X-rays, the administration of tooth sealants, tooth extractions, fillings, crowns and general teeth cleanings. The Company is headquartered in Nashville, Tennessee and has 49 clinics across 16 states.

“We are pleased to be working with American Capital again,” said Arcapita Principal Jack Draughon. “American Capital has once again proven to be a supportive and value-added investment partner and we look forward to continuing our relationship with them in the future.”


American Capital is a publicly traded buyout and mezzanine fund with $11.5 billion in capital resources under management. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, provides capital directly to early stage and mature private and small public companies and through its asset management business is a manager of debt and equity investments in private companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital invests from $5 million to to $500 million per company.

As of October 31, 2006, American Capital shareholders have enjoyed a total return of 556% since the Company's IPO - an annualized return of 23%, assuming reinvestment of dividends. American Capital has paid a total of $1.3 billion in dividends and paid or declared $22.44 dividends per share since its August 1997 IPO at $15 per share.

Companies interested in learning more about American Capital's flexible financing should contact Mark Opel, Senior Vice President, Business Development, at (800) 248-9340, or visit


Arcapita is an international investment firm with offices in Atlanta, London and Bahrain. Arcapita's four principal lines of business are corporate investment, venture capital, real estate investment and infrastructure and energy investment. Arcapita's private equity line of business was founded in 1997 and operates out of Atlanta and London. Since 1998, Arcapita's private equity professionals have arranged for equity investments of more than $1.7 billion in 23 transactions with an aggregate enterprise value of $4 billion. Arcapita healthcare related portfolio companies include Meridian Surgical Partners LLC, an ambulatory surgery center company developing multiple centers in key United States markets; TLC Health Care Services Inc., one of the largest home healthcare and hospice services providers and one of the largest Medicare home care service providers in the United States; and Working Rx, the leading provider of workers’ compensation claims management services to retail pharmacy providers throughout the United States. In 2005, American Capital supported the acquisition by affiliates of Arcapita of American Capital’s portfolio company The Tensar Corporation, a full-service provider of specialty products and engineering services used for site development and transportation and environmental infrastructure.

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.

This announcement is neither an offer to sell nor a solicitation to buy securities. This announcement appears as a matter of record only.

Jeff MacDowell, Managing Director (214) 273-6630
Adam Stern , Vice President (214) 273-6630
Brian Maney, Director, Corporate Communications (301) 951-6122

SOURCE: American Capital Ltd.