|American Capital Achieves a Total Gain of $36 Million from Its Investment in SSH Acquisition, Provides $141 Million Financing to Support Lake Capital's Acquisition|
|Provides $141 Million Financing to Support Lake Capital's Acquisition
Bethesda, MD – September 10, 2008 – American Capital Ltd. (Nasdaq: ACAS) announced today that it has realized a gain of $36 million in the third quarter from the sale of its portfolio company SSH Acquisition, Inc. to Lake Capital. Including the investments in SSH Acquisition of American Capital's affiliated funds under management, the gain totals $61 million over the life of the investment. Including inception to date cumulative gains and dividend income, American Capital and its affiliates have realized over $78 million in excess of their invested equity capital over the life of the investment.
SSH Acquisition is a provider of environmental services that include the treatment, recycling and beneficial re-use of lightly contaminated soil for real estate, infrastructure development and industrial customers in the Mid-Atlantic region and California. In support of Lake Capital's acquisition, American Capital invested $141 million in the form of a term loan, junior and senior subordinated debt, holding company PIK notes and a revolving credit facility.
American Capital acquired control of SSH Acquisition in September 2005, investing $137 million in senior term loans, senior and junior subordinated debt and convertible preferred equity and committing $10 million to a revolving credit facility. American Capital has earned a 41% compounded annual rate of return on its debt and equity investments, including interest, dividends and fees earned over the life of its investment. On its equity only investments, American Capital earned a 62% compounded annual rate of return, including dividends and fees earned over the life of its investment. The proceeds received by American Capital were less than its second quarter 2008 valuation of the investment by $4 million, or 5%. For more information about American Capital's original investment, please go to www.americancapital.com/our_portfolio/companies/soil_safe.html.
"We are very pleased with the result of our investment in SSH Acquisition and are excited to support its new partner, Lake Capital," said Brian Graff, American Capital Senior Managing Director. "The company maintains a leading market share with a great capacity for growth. We are pleased to offer our continued support to a top quality company with our additional financing."
"Our investment has produced a great outcome for American Capital," said David Ehrenfest Steinglass, American Capital Managing Director. "SSH Acquisition has been successful at leveraging the company's competitive advantages in an industry with attractive fundamentals and we are delighted to have been a part of the company's growth."
"The successful sale of SSH Acquisition is a testament to the strength and vision of a management team that has built a market leader in soil remediation," said Eugene Krichevsky, American Capital Principal, Buyouts. "Since we invested in the company three years ago, it has experienced rapid organic growth on the East Coast and successfully acquired and strengthened its West Coast presence with its Adelanto, California facility."
American Capital, including its global fund management business, has approximately $20 billion in capital resources under management(1) and over 290 portfolio companies. American Capital has invested directly and through its global asset management business approximately $7.7 billion in the last twelve months, $5.2 billion year to date and $440 million quarter to date. Not including funds under management, American Capital has invested approximately $4.2 billion in the last twelve months, $2.2 billion year to date and $380 million quarter to date. American Capital assisted in the syndication of approximately $1.1 billion of senior debt for its portfolio companies in the last twelve months, $445.6 million year to date and $89.2 million quarter to date. For more information about American Capital's portfolio, please go to www.americancapital.com/our_portfolio/our_portfolio.html.
"SSH Acquisition is well-positioned for growth in the coming years in its existing facilities and in new markets," said Michael Jordan, American Capital Vice President, Sponsor Finance. "We are excited to partner with Lake Capital, a leading Chicago-based private equity firm, in the company's continued success."
Founded in 1989 and headquartered in Columbia, MD, SSH Acquisition, through its subsidiaries, provides environmental services that include the treatment, recycling and beneficial re-use of lightly contaminated soil that would otherwise be sent to landfills. The company accepts soil with low levels of non-hazardous hydrocarbons and transforms it into a safe and usable end-product through micro-encapsulation and thermal desorption processes. Once treated, the company either uses the material to fill sites it operates or sends it to third parties for redevelopment, fill material, road base or other construction projects. The company currently operates three facilities – Logan, NJ, which opened in December 2003; Brandywine, MD, which opened in February 2005; and Adelanto, CA, which was acquired by the company in 2005.
ABOUT AMERICAN CAPITAL
American Capital, with $20 billion in capital resources under management(1), 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 realized 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 http://www.AmericanCapital.com or www.EuropeanCapital.com.
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.
(1) Capital resources under management is internally and externally managed assets and available capital resources as of June 30, 2008.
SOURCE: American Capital Ltd.www.americancapital.com