|American Capital Invests $255 Million to Support Combination of Severn Trent Laboratories and TestAmerica|
Bethesda, MD - January 25, 2007 - American Capital Strategies Ltd. (Nasdaq: ACAS) announced today that in the fourth quarter of 2006 it and an affiliate invested $255 million in TestAmerica Holdings Inc., the second largest operator of environmental testing laboratories in the United States. The investment supported TestAmerica’s combination with Severn Trent Laboratories (STL), a division of Severn Trent plc and the largest operator of environmental testing laboratories in the United States. American Capital’s one stop financing took the form of a senior term loans, senior subordinated debt and preferred equit. American Capital is also providing a revolving credit facility. American Capital Equity Fund I LLC (“ACE”), a fund managed by American Capital, provided 30% of the American Capital equity investment. H.I.G. Capital LLC is the majority owner of TestAmerica-STL.
“In our second partnership with H.I.G. Capital, American Capital is pleased to support TestAmerica’s combination with Severn Trent Laboratories, the largest environmental testing laboratory in the United States,” said American Capital Regional Managing Director Darin Winn. “The merger of Severn Trent Laboratories and TestAmerica will combine the two leading providers of environmental testing services in the United States. Our team of investment professionals has assembled a one stop debt financing solution that enables the Company’s experienced management team, in conjunction with H.I.G., to successfully integrate and operate the two companies going forward.”
American Capital invested directly and through its funds under management $6.7 billion in 2006 and $2.2 billion in the fourth quarter of 2006 and has invested $467 million in 2007 year to date. Not including funds under management, American Capital invested $5.1 billion in 2006 and $1.7 billion in the fourth quarter of 2006 and has invested $430 million in 2007 year to date. For more information about American Capital’s portfolio, please go to www.americancapital.com/our_portfolio/our_portfolio.html.
“The new TestAmerica-STL is the largest provider of environmental testing services in the United States and the only fully integrated, nationwide operator with a complete offering of testing services and related products,” said American Capital Managing Director Bowen Diehl. “By combining the national presence of the two companies, TestAmerica-STL will be able to deliver the advantages of large-scale national operations while providing the personalized attention of a local service provider.”
“The Company’s outstanding reputation, market position and management team ensures a successful future for the Company,” said American Capital Vice President John Drennan. “This combination makes strategic and financial sense, and we are excited to support H.I.G. and the management team in this fantastic opportunity.”
TestAmerica-STL provides a full spectrum of environmental testing services, including the complete range of analyses of soil, water waste and air samples for trace levels of organic, inorganic and metal contaminants; and air quality and emissions testing, including analyses of mold, food microbiology and allergens. The Company also develops and supplies sampling and remediation pumping systems for landfills and ground water contamination sites and other environmental testing products. TestAmerica-STL serves its customer base of over 12,000 clients, including major industrial companies, engineering and consulting firms and government entities, through over 100 laboratories and service centers in the United States.
“We are delighted to again be working with American Capital,” said H.I.G. Capital Managing Director Anthony DiSimone. “American Capital’s flexible capital, its ability to provide a one stop debt financing solution and the broad expertise of its professionals will help TestAmerica-STL maintain its leading position in this steadily growing industry.”
ABOUT AMERICAN CAPITAL
American Capital is the largest U.S. publicly traded alternative asset manager with $12 billion in capital resources under management. 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 invests from $5 million to $500 million in North America and €5 million to €400 million in Europe.
As of December 31, 2006, American Capital shareholders have enjoyed a total return of 617% 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 $22.44 in 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 H.I.G. CAPITAL LLC
H.I.G. Capital LLC (“H.I.G.”) is a leading private equity and venture capital investment firm with more than $3 billion of equity capital under management. Based in Miami, and with offices in Atlanta, Boston, and San Francisco, H.I.G. specializes in providing capital to small and medium-sized companies. H.I.G. invests in management-led buyouts and recapitalizations of profitable and well managed manufacturing or service businesses. H.I.G. also has extensive experience with financial restructurings and operational turnarounds. Since its founding, H.I.G. has completed in excess of 70 transactions. The firm currently manages a portfolio of more than 50 companies with combined revenues in excess of $5 billion.
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.
This announcement is neither an offer to sell nor a solicitation to buy securities.
SOURCE: American Capital Ltd.www.americancapital.com