Portfolio Company Press Release
|American Capital Invests $19 Million in Combination of Two Leading Kayak Manufacturers|
Bethesda, MD - May 18, 2005 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has invested an additional $19 million in its portfolio company Confluence Holdings Corp. to support the acquisition of the water sports business assets of Watermark Paddlesports Inc. Confluence is a leading manufacturer and distributor of kayaks, canoes and paddlesports accessories. American Capital's new investment takes the form of a senior term loan and senior subordinated debt. In addition to the new investment, American Capital owns senior subordinated debt, junior subordinated debt, junior unsecured subordinated debt and equity. American Capital's total current investment in Confluence is $61 million. GMAC Commercial Finance LLC is providing a revolving credit facility. Following the transaction, American Capital owns approximately 95% of Confluence on a fully diluted basis.
"Our investment in Confluence Holdings is an excellent example of American Capital's ability to assist in the growth of its portfolio companies," said Gordon O'Brien, American Capital Managing Director, Operations. "The Watermark acquisition is a significant development for our investment in Confluence and we expect to see considerable value created."
American Capital has invested over $2.4 billion in the last twelve months, nearly $760 million year to date and over $350 million quarter to date. For more information about American Capital's portfolio, click here.
"The combination of Confluence and Watermark creates a premier market player in the growing, attractive paddlesports market," said Myung Yi, American Capital Principal, Operations. "By combining Watermark and Confluence's excellent brands, Confluence will have the most comprehensive offering of brands in the paddlesports market, thereby strengthening its market leadership."
"The merged company will leverage the superior molding efficiencies developed by Confluence and the outstanding assembly process at Watermark to drive growth of the combined business," said Bob Sharp, American Capital Principal, Operations.
Headquartered in Easley, SC, Watermark manufactures and distributes the industry's most complete line of whitewater, touring and recreational kayaks as well as complemenatry accessories, including high end specialty paddles. The company's brands include kayak leaders Dagger®, Perception®, and Mainstream®, in addition to Harmony® paddlesports accessories and AT Paddles. Pictured above is the Dagger® Kingpin, a cutting edge performance kayak.
American Capital first invested in Confluence Holdings in September 1998. Headquartered in Trinity, NC, Confluence, is a leading manufacturer of kayaks, canoes, sailing trimarans and water sports accessories. Confluence's products are sold under the Mad River Canoe®, Wilderness Systems®, WindRider®, Voyageur®, and Wave Sport® brand names. Pictured above is the Wilderness Systems® Capehorn 140, a kayak with competetive speed and comforting stability.
Confluence's customers include well-known sporting goods retailers and mass retailers such as Dick's Sporting Goods Inc. (NYSE: DKS) and its subsidiary Galyan's Trading Company, Inc., Recreational Equipment Inc., Eastern Mountain Sports, L.L. Bean Inc. and Bass Pro Shop.
For more information about American Capital's original investment in Confluence Holdings click here.
ABOUT AMERICAN CAPITAL
American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $5.2 billion. American Capital is an investor in and sponsor of management and employee buyouts, invests in private equity buyouts, and provides capital directly to private and small public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations.
As of March 31, 2005, American Capital shareholders have enjoyed a total return of 311% since the Company's IPO - an annualized return of 21%, assuming reinvestment of dividends. As of March 31, 2005, American Capital has outperformed 99% of all public companies based on annual returns in each of the past 1, 3, 5 and 7 year time periods. American Capital has paid a total of $717 million in dividends and paid or declared $17.51 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.
SOURCE: American Capital Ltd.www.americancapital.com
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