|American Capital Invests $44 Million in Recapitalization and Add-on Acquisition for Portfolio Company Nivel|
Bethesda, MD - May 12, 2006 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today the funding of a $44 million facility for its portfolio company Nivel Parts & Manufacturing Co., a leading designer and distributor of a broad range of aftermarket golf car replacement parts and accessories. The proceeds recapitalized Nivel and supported the acquisition of Huntington Investment Corporation, doing business as Intercoastal Manufacturing Company or "IMC". IMC is also a designer and distributor of golf car replacement parts and accessories. American Capital's investment takes the form of a senior term loan and senior subordinated debt. American Capital is also providing a revolving credit facility. Sentinel Capital Partners is the majority owner of Nivel.
"Our one-stop debt financing in support of Nivel's acquisition of IMC not only backs the growth of one of our portfolio companies, but also builds on our relationship with our private equity sponsor Sentinel Capital Partners," said American Capital Regional Managing Director Brian Graff. "We're delighted to be part of the combination of two leaders in the golf car replacement parts industry, both of which have consistently performed well and generated strong cash flows."
American Capital has invested approximately $3.7 billion in the last twelve months, approximately $1.2 billion year to date and $414 million quarter to date. These amounts do not include American Capital's unfunded equity commitment to its affiliate European Capital. For more information about American Capital's portfolio, click here.
"Nivel's strategic acquisition of IMC is a compelling investment opportunity for American Capital," said American Capital Principal Adam Spence. "The acquisition will enable Nivel to become more of a one-stop shop for both golf car replacement parts and accessories, solidify its position as a value-added distributor, increase nationwide distribution capabilities, leverage sourcing relationships and achieve cost synergies. In addition, the combined company has excellent customer, product and geographic diversification. As the shift toward repair and refurbishment of used golf cars for alternative use continues, the combined company will be well-positioned to benefit from the increase in demand for aftermarket replacement parts and golf car accessories."
American Capital first invested in Nivel in February 2004, supporting Sentinel's acquisition. Founded in 1968, Jacksonville, FL headquartered Nivel is a one-stop shop for golf car replacement parts, offering the broadest selection of parts for all major manufacturers' cars. Nivel carries over 3,000 SKUs, including accessories, battery parts, bearings, seals, o-rings, brake parts, chargers, motor and engine parts, gaskets, solenoids, springs, switches and tires. The Company distributes golf car parts exclusively to over 1,800 independent and franchise golf car dealers throughout the U.S. and internationally. In addition to its distribution business, Nivel publishes Golf Car News, a bi-monthly industry magazine targeted at golf car dealers.
Established in 1975, Beaverton, OR headquartered IMC is a designer and distributor of golf car aftermarket parts and accessories, with a focus on golf car accessories. Through its division Pac Rim, IMC also designs and distributes the industry's broadest range of automotive wheel accessories.
"This is our third time working with American Capital and they continue to be a value- added financing partner for us. Their one-stop debt financing, in-depth knowledge of Nivel's business and industry, responsiveness and flexibility were precisely what we needed for the acquisition of IMC," said Jim Coady, a partner at Sentinel. "American Capital played an instrumental role in helping create a true one-stop shop for the maintenance, conversion and improvement of aftermarket golf cars."
ABOUT AMERICAN CAPITAL
As of December 31, 2005, American Capital shareholders have enjoyed a total return of 405% since the Company's IPO - an annualized return of 21%, assuming reinvestment of dividends. American Capital has paid a total of $868 million in dividends and paid$20.73 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.
ABOUT SENTINEL CAPITAL PARTNERS
Sentinel's portfolio includes: MetroDentalcare, a leading regional dental clinic operator and provider of group dental care in the greater Minneapolis/St. Paul metropolitan area, Fasloc Inc., a leading manufacturer of safety products used in underground mines, and Madill Inc., a leading manufacturer of forestry and logging equipment. In 2002, American Capital invested in Sentinel's acquisition of Alemite Corporation, a leading lubrication equipment manufacturer. In January 2006, Alemite was sold resulting in gains for both American Capital and Sentinel. In 2004, Sentinel sold its portfolio company Cottman Transmission Systems LLC, a franchisor of automotive transmission centers, to American Capital. In 2006, American Capital invested in the combination of Cottman with AAMCO Transmissions Inc., resulting in the number one transmission repair chain in the United States.
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