Bethesda, MD - March 8, 2006 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has invested in the combination of AAMCO Transmissions Inc. with its portfolio company Cottman Transmission Systems LLC. AAMCO and Cottman are two leading U.S. transmission repair chains. The combined entity will eventually operate under the AAMCO Transmissions name. American Capital's investment takes the form of senior term loans, senior and junior subordinated debt and preferred and common equity. American Capital is also providing a revolving credit facility. Management will have significant investments in the equity. Post close, American Capital owns 83% of the combined entity, on a fully diluted basis.
"This is a good example of American Capital's ability to work closely with a portfolio company to grow the business into an industry leader," said American Capital Regional Managing Director Brian S. Graff. "Cottman's combination with AAMCO will result in the number one transmission repair chain in the United States with over 1,100 units and system wide sales of more than $600 million."
American Capital invested approximately $3.4 billion in the last twelve months and nearly $500 million year 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.
"AAMCO's dominant brand position provides it with a sustainable competitive advantage, as most transmission competitors lack the resources to raise their brand profile to a comparable level," said American Capital Principal Dale Stohr. "Cottman and AAMCO complement each other well and offer franchisees a strong value proposition."
In April, 2004 American Capital invested $46 million in the acquisition of Cottman Transmission, the second largest franchisor of automotive transmission repair centers in North America. Founded in 1962 and headquartered in Horsham, PA, the Company has a network of approximately 400 independent franchise centers that offer automotive diagnosis and minor and major transmission repairs, ranging from fluid flushing and replacement to transmission rebuilding services. AAMCO is a leading franchisor and one of the most recognized brand names in the automotive repair and service industry. It is the nation's largest transmission repair specialist, comprised of over 730 franchised repair centers across 47 states, Puerto Rico and Canada. In addition to transmission repair, AAMCO has recently expanded into more comprehensive diagnostic and repair services. The combined entity will have over 1,100 repair centers.
"This combination represents an industry changing event which will be a significant step forward for Cottman and AAMCO," said Cottman President Todd Leff. "We are extremely excited about executing on our strategic vision for the combined company, which will create significant value for franchisees and consumers. As the world's largest transmission repair specialist and the nation's second largest automotive repair chain, AAMCO will meet consumer demand for branded aftermarket specialists who can provide an alternative to the high priced repairs and maintenance services found at car dealers."
ABOUT AMERICAN CAPITAL
American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $7 billion. 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 and commercial loan obligations. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital can invest up to $300 million per transaction.
As of February 28, 2006, American Capital shareholders have enjoyed a total return of 404% since the Company's IPO - an annualized return of 21%, assuming reinvestment of dividends. American Capital has paid a total of $961 million in dividends and paid or declared $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 our website.
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.
This announcement appears as a matter of record only.
Brian S. Graff, Regional Managing Director (212) 213-2009
Dale Stohr, Principal (212) 213-2009
Brian Maney, Director, Corporate Communications (301) 951-6122
SOURCE: American Capital Ltd.