|American Capital Invests $29 Million in Buyout of the Algoma Group|
Bethesda, MD - April 18, 2006 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has invested $29 million in the buyout of The Algoma Group. The Algoma Group is a manufacturer and distributor of high-end customized architectural wood doors for the commercial and institutional building markets. American Capital's investment takes the form of a senior term loan, senior subordinated debt and convertible preferred equity. American Capital is also providing a revolving credit facility. Industrial Opportunity Partners ("IOP"), a co-sponsor of the buyout, is investing in Algoma's convertible preferred and common equity.
"Our Special Situations Group provides critical capital and a wealth of operating experience to middle market companies with the potential to grow their businesses," said Gordon O'Brien, American Capital Managing Director. "Our buyout of Algoma, one of the largest manufacturers and distributors of architectural wood doors, is an excellent opportunity for the Special Situations Group and our partner IOP to assist a company with great potential to accelerate its growth and improve its earnings."
American Capital has invested approximately $3.7 billion in the last twelve months, approximately $800 million year to date and $35 million quarter to date. These amounts do not include American Capital's unfunded equity commitment and debt funded to its portfolio company European Capital. For more information about American Capital's portfolio, click here.
"Algoma has developed a strong reputation for high quality products and superior customer service, which has enabled it to establish long-standing customer relationships, " said Myung Yi, American Capital Principal, Special Situations Group. "We're excited about Algoma's positive industry outlook, growth opportunities and potential to expand its market share. In addition, we anticipate that through a carefully developed operating plan Algoma will capture significant cost savings."
Founded in 1892, Algoma, WI-headquartered Algoma manufactures high-quality commercial wood doors that are made to exact architectural specifications. The Company's products include 5-ply doors, 7-ply doors, stile and rail doors and other specialty doors and components. Algoma primarily sells its finished commercial doors to contractors, subcontractors and architectural millworkers, which then supply the products to end customers for new building construction and renovation purposes. The Company's products serve a wide range of end users including hospitals, schools, offices and stadiums. Algoma has worked on projects such as the FBI headquarters, Titan Stadium, Ohio State University buildings, Disney's Fort Wilderness Hotel and Home Depot's headquarters. Algoma employs nearly 450 people in its manufacturing facilities at its headquarters and in Jefferson City, TN, as well as in its seven distribution centers.
"American Capital's financial support, experience in growing middle market companies in a variety of industries and operating expertise, make them a great investment partner for us and Algoma," said Ken Tallering, Senior Managing Director of IOP. "We're looking forward to working with them as we position Algoma for growth."
ABOUT AMERICAN CAPITAL
As of March 31, 2006, American Capital shareholders have enjoyed a total return of 410% since the Company's IPO - an annualized return of 21%, assuming reinvestment of dividends. American Capital has paid a total of $1 billion in dividends and paid $19.91 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 www.AmericanCapital.com.
American Capital Special Situations Group
ABOUT INDUSTRIAL OPPORTUNITY PARTNERS
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 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 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.
SOURCE: American Capital Ltd.www.americancapital.com
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