|American Capital Realizes a Gain of $19 Million from Sale of PaR Systems|
Bethesda, MD – August 25, 2008 – American Capital Ltd. (Nasdaq: ACAS) announced today that in the third quarter of 2008 it realized a gain of $19 million from the sale of its portfolio company PaR Systems Inc. to MML Capital Partners ("MML"). American Capital's inception to date total realized gain on its investment in PaR Systems was $37 million, representing a 42% compounded annual rate of return, including interest, dividends and fees earned over the life of its investment. Including investments in PaR Systems by American Capital affiliated funds under management, the gain totals $48 million. The proceeds received by American Capital were less than the second quarter 2008 valuation of the investment by $0.6 million, or 3%.
PaR Systems is a leading provider of specialized material handling and automation equipment. PaR Systems serves a diverse group of Fortune 500 customers in the aerospace, defense, food and beverage, hazardous material management, industrial manufacturing and life sciences industries. In support of MML's acquisition, American Capital and its affiliated funds under management invested $8.5 million in a senior debt facility led by M&I Marshall & Ilsley Bank.
"Following our initial investment in PaR Systems in 2002, the company's management team successfully executed a systematic acquisition strategy, acquiring the assets of six businesses," said Justin DuFour, Vice President, Buyouts Group. "This strategy allowed the company to combine newly acquired products and market presence with its deep technical expertise and business processes in order to expand market penetration and improve performance."
American Capital acquired control of PaR Systems in March 2002, investing $36 million in the form of a revolving credit facility, senior term loan, senior and junior subordinated notes with warrants and common equity. In a series of transactions from 2004 to 2006, American Capital partially exited its investment in PaR Systems from the sale of PaR's nuclear equipment and services business, realizing a total gain of $15 million.
"The PaR Systems management team and employees look forward to the next phase of the company's growth with MML," said Mark Wrightsman, PaR Systems CEO. "American Capital's flexible capital base made them an ideal financial partner to support our acquisition strategy and has allowed us to form a solid platform from which PaR Systems will continue to grow."
Since its August 1997 IPO through the second quarter of 2008, American Capital has earned a 17% compounded annual return, including interest, dividends, fees and net gains, on 239 realizations of senior debt, subordinated debt and equity investments, totaling $11 billion of committed capital. These realizations represent 46% of all amounts invested by American Capital since its August 1997 IPO. Proceeds from these realizations exceeded the total associated prior quarter valuation of the investments by less than 1%. American Capital earned a 30% compounded annual return on the exit of its equity investments, including dividends, fees and net gains.
American Capital and its funds under management have received $5 billion in total amortizations, prepayments and exits in the past four quarters, $3 billion year to date and $0.9 billion quarter to date. Not including funds under management, American Capital has received $4 billion in total amortizations, prepayments and exits in the past four quarters, approximately $2 billion year to date and approximately $0.4 billion quarter to date.
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For more information on American Capital's investment in PaR Systems, please go to www.americancapital.com/our_portfolio/companies/par_systems.html.
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, with $20 billion in capital resources under management, is the only private equity fund and the largest alternative asset management company in the S&P 500. American Capital, both directly and through its global asset management business, originates, underwrites and manages investments in private equity, leveraged finance, real estate and structured products. American Capital and its affiliates invest from $5 million to $800 million per company in North America and €5 million to €500 million per company in Europe. American Capital was founded in 1986 and currently has 12 offices in the U.S. and Europe.
As of July 31, 2008, American Capital shareholders have enjoyed a total return of 266% since the Company's IPO—an annualized return of 13%, assuming reinvestment of dividends. American Capital has paid a total of $2.5 billion in dividends and paid $29.25 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.
ABOUT MML CAPITAL PARTNERS
MML Capital Partners is an independent private equity firm providing all levels of junior capital, from equity to mezzanine, in both control and minority investments. With offices in London, Paris, Frankfurt and Stamford, Connecticut, MML has invested over €1.5 billion in over 80 companies across 11 countries.
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.
SOURCE: American Capital Ltd.www.americancapital.com