Exits, Repayments, Gains, and Losses Press Release
|American Capital Provides Details of $68 Million of Total Net Portfolio Realized Gains in Fourth Quarter 2006|
Bethesda, MD – March 12, 2007 - American Capital Strategies Ltd. (Nasdaq: ACAS) announced today the details of $68 million of total net realized gains from the disposition of portfolio investments in the fourth quarter of 2006. During the fourth quarter of 2006, American Capital received $1.5 billion of proceeds from exits and repayments from portfolio investments. Through December 31, 2006, American Capital received total proceeds of $4.7 billion from exits and repayments from portfolio investments since its 1997 initial public offering.
Sale of Equity Interests to American Capital Equity I
FMI Holdco I LLC
In April 2003, American Capital and an affiliate of American Capital invested $49 million in FMI in a revolving credit facility, senior term loan, subordinated notes and minority equity in support of a recapitalization led by KRG Capital Partners LLC.
“We are pleased to have supported KRG in their investment in FMI,” said Darin Winn, American Capital Regional Managing Director. “We value our ongoing relationship with KRG and the opportunity to have worked with them as FMI responded to growing market demands.”
For more information on the FMI transaction, please go to www.americancapital.com/our_portfolio/companies/fmi_international.html.
NWCC Acquisitions LLC
In November 2002, American Capital and an affiliate invested $12.5 million in senior subordinated debt and common and preferred equity to support the acquisition of Northwest Coatings by Caltius Equity Partners. In February 2005, American Capital made a subsequent investment in Northwest Coatings, investing $24 million to support an add-on acquisition and to refinance existing debt, including $10 million of American Capital senior subordinated debt. American Capital’s additional investment consisted of a revolving loan facility, senior term loans, subordinated debt and equity. In December 2005, American Capital received full repayment of its senior and subordinated debt investments.
“We are glad we were able to participate in the growth of Northwest Coatings through multiple investments and to work with Caltius, a leading private equity firm,” said Frank Do, American Capital Managing Director.
For more information on the Northwest Coatings transaction, please go to www.americancapital.com/our_portfolio/companies/northwest.html.
Dynisco Parent Inc.
In July 2004, American Capital invested $15 million in senior subordinted debt and junior subordinated debt with warrants in Dynisco, supporting Audax Private Equity's acquisition. In September 2004, American Capital made a subsequent $14 million investment in Dynisco to support the company’s acquisition of Alpha Technologies US LP, the leading global designer and manufacturer of precision instruments and software for the rubber processing industry. American Capital's additional investment took the form of senior subordinated debt, intermediate subordinated debt with warrants and common equity.
In the fourth quarter of 2005, American Capital received full repayment of its $28 million subordinated debt investments in Dynisco, realizing a gain of $0.6 million on the prepayment of the debt.
“It was a pleasure to support Audax’s investment in Dynisco and its expansion strategy,” said David Ehrenfest Steinglass, Senior Vice President of Corporate Development. “We look forward to working with Audax again on future investments.”
For more information on the Dynisco transactions, please go to www.americancapital.com/our_portfolio/companies/dynisco.html.
Flexi-Mat Holding Inc.
For more about the Flexi-Mat transaction, please go to www.americancapital.com/our_portfolio/companies/flexi_mat.html.
For more information on the Precitech transaction, please go to www.americancapital.com/our_portfolio/companies/precitech.html.
Pelican Products Inc.
In October 2004, American Capital invested $15 million in a second term loan to support Behrman Capital’s acquisition of Pelican.
“Working with Behrman Capital provided us with an opportunity to support Pelican’s growth and new product development,” said Natasha Volyanskaya, American Capital Principal.
For more information on the Pelican transaction, please go to www.americancapital.com/our_portfolio/companies/pelican.html.
Nailite International Inc.
In April 2003, American Capital invested $9.3 million in senior subordinated debt with warrants to support the acquisition of Nailite by Graham Partners.
“Our support of Graham’s investment and an innovative, industry leading portfolio company has worked well for all concerned,” said Ken Jones, American Capital Principal.
For more information on the Nalite transaction, please go to please go to www.americancapital.com/our_portfolio/companies/nailite.html.
Zenta Global Ltd.
In May 2005, American Capital invested $28.5 million in a senior term loan and equity in Zenta, supporting H-Cube LLC’s acquisition of Zenta. H-Cube was formed by GTCR Golder Rauner LLC and is a business process outsourcing company focused on acquiring and operating business process and technology-based outsourcing companies. In December 2005, American Capital invested an additional $20.2 million in Zenta for the add-on acquisition of Global Realty Outsourcing, a leading real estate outsourcing partner to the commercial and residential real estate markets. In March 2006, American Capital invested an additional $16.7 million in Zenta for the add-on acquisition of Blackheath Financial LLC, a real estate finance consulting and staff augmentation firm that provides outsourcing services to financial institutions that participate in the CMBS market.
“Our optimism concerning Zenta was well justified,” said Demian Kircher, American Capital Principal. “We are also pleased to continue our solid working partnership with GTCR.”
For more information on the Zenta transaction, please go to please go to www.americancapital.com/our_portfolio/companies/hcube.html.
The Hilsinger Company
In May 2004, American Capital invested $60 million in a revolving credit facility, senior term debt, a senior secured acquisition line and senior and junior subordinated debt supporting the recapitalization of Hilsinger by ICV Capital Partners and Palladium Equity Partners LLC. In May 2004, American Capital syndicated $20 million of the senior term debt.
“We were able to support ICV and Palladium by providing a cost effective one-stop debt facility,” said Robert Klein, American Capital Managing Director. “In addition, we are gratified to see Hilsinger’s growth during the time of our investment.”
For more information on the Hilsinger transaction, please go to www.americancapital.com/our_portfolio/companies/hilsinger.html.
Gibson Guitar Corp.
In August 2004, American Capital provided financing facilities of up to $52.2 million to Gibson. American Capital’s investment took the form of second lien notes and a second lien committed acquisition line.
“We are delighted that our association with a music industry icon has worked well for all parties and that our financing allowed Gibson the flexibility it required to manage its growth,” said Jeff MacDowell, American Capital Managing Director.
For more information on the Gibson Guitar Corp. transaction, please go to www.americancapital.com/our_portfolio/companies/gibson.html.
“American Capital’s support of an employee stock ownership plan has been especially rewarding for us,” said Greg Long, American Capital Vice President. “We wish the employee owners of SmithBuklin well.”
For more information on the SmithBucklin transaction, please go to www.americancapital.com/our_portfolio/companies/smithbucklin.html.
A.H. Harris & Sons Inc.
“A.H. Harris has grown significantly during our seven year investment and we look forward to remaining a minority investor in the company,” said Darin Winn, American Capital Regional Managing Director.
For more information on the A.H. Harris & Sons transaction, please go to www.americancapital.com/our_portfolio/companies/ah_harris.html.
Other Company Exit and Repayments
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From its IPO through the fourth quarter of 2006, American Capital has earned an 17% compounded annual return on 164 exits and repayments of senior debt, subordinated debt and equity investments, totaling $4.7 billion of invested capital, including interest, dividends, fees and net gains on these investments. These exits and repayments represent 35% of all amounts invested by American Capital since its August 1997 IPO.
For a chart showing American Capital’s exited portfolio companies, please go to www.americancapital.com/our_portfolio/exited.html.
ABOUT AMERICAN CAPITAL
American Capital is the second largest U.S. publicly traded alternative asset manager with approximately $11 billion in assets under management (second to Fortress (NYSE: FIG)). American Capital, both directly and through its global asset management business, is an investor in management and employee buyouts, private equity buyouts, and early stage and mature private and public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital and its affiliates invest from $5 million to $750 million per company in North America and €5 million to €400 million per company in Europe.
As of February 28, 2007, American Capital shareholders have enjoyed a total return of 590% since the Company's IPO - an annualized return of 23%, assuming reinvestment of dividends. American Capital has paid a total of $1.4 billion in dividends and paid or declared $23.33 dividends per share since going public in August 1997 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 or www.EuropeanCapital.com.
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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