|American Capital Invests $8.5 Million in Leading Branded Food Products Company|
Bethesda, MD - May 2, 2005 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has invested $8.5 million in Milton's Baking Company LLC ("Milton's"), a leading branded food products company in the fresh baked bread, gourmet cracker and frozen dinner entrée categories. American Capital's investment takes the form of senior subordinated debt and supports the recapitalization of Milton's led by Red Diamond Capital Partners LP. NewStar Financial Inc. is providing a revolving credit and term loan facility to the transaction. Milton's founders and management are rolling over a significant portion of their equity and will continue to manage the business.
"Our investment supporting the recapitalization of Milton's by Red Diamond demonstrates our continuing strong record of financing buyouts for leading private equity firms. Red Diamond is our fourth new private equity relationship in 2005 and we have now provided financing to 64 private equity firms since our IPO in 1997 and 29 in the past 12 months," said American Capital COO Ira Wagner. "Milton's strong brand name, scalable, variable low-cost operating platform and experienced management team make it an attractive investment opportunity for American Capital."
American Capital has invested over $2.3 billion in the last twelve months, nearly $650 million year to date and $240 million quarter to date. For more information about American Capital's portfolio, click here.
"We are proud to invest in Milton's, a well-regarded brand noted for its unique formulations and consistent, high quality products," said American Capital Principal Ian Larkin. "Many of Milton's products compete in highly attractive market segments. In particular, the premium grain breads market has gained prominence with the recent release of an updated national food pyramid, which cites the health benefits of regular consumption of high fiber grain breads."
"We have confidence in the executive leadership of Milton's going forward, including founders Barry Robbins and David Levy and the two presidents overseeing the company's principal operating divisions, Bob Obenberger and Craig Schechtman. They will be complemented by the contributions of Ron Danenberg, a seasoned veteran in the branded food industry, who has worked closely with Red Diamond Capital and will serve as Milton's executive chairman. We believe this talented team will continue to expand the distribution of these sensational products as well as develop line extensions and new product categories under the Milton's brand umbrella," said American Capital Vice President John Cannon. "The successful launch of the gourmet cracker product in 2004 is a fine example of the innovative new products the team has brought to market."
Founded in 1996, Del Mar, CA-headquartered Milton's operates through two divisions, Milton's Baking Company and MBR Foods, both formulators and marketers of branded, high quality, healthy food products. Milton's Baking Company products include 99% fat free bread products, including multi-grain, whole-grain, buttermilk, gourmet white, dark and hearty, and potato breads, as well as muffins, bagels, hamburger buns, hot dog rolls and snack and hors d'oeuvre premium crackers, all branded under the Milton's Baking Company label. Through its MBR Foods division, the Company develops and markets frozen dinner entrees, including Chicken & Rice, Meat and Vegetable Lasagnas and Turkey Divan alongside an assortment of seasonal selections, all branded as Milton's Restaurant Classics. Milton's customers include national club, specialty and grocery stores. Pictured above is Milton's Original Healthy Multi-Grain Bread, a nutritious and delicious choice, especially for health conscious consumers.
"American Capital proved to be a reliable financial partner in aiding our efforts to provide capital in support of the company's continued growth ambitions," said Red Diamond Capital Managing Director Peter Pfister. "We and the management of Milton's welcome them as a partner in our collective quest to build a premier nationally branded food company."
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 April 29, 2005, American Capital shareholders have enjoyed a total return of 323% since the Company's IPO - an annualized return of 21%, assuming reinvestment of dividends. American Capital has paid a total of $717 million in dividends and paid $16.76 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.
ABOUT RED DIAMOND CAPITAL PARTNERS
Formed in 2002, Red Diamond Capital is an independent $150 million private equity fund that invests in middle-market manufacturing, distribution and service businesses in North America. With its committed capital provided primarily by Mitsubishi Corporation, Japan's leading trading company, Red Diamond offers a unique mix of strategic resources, industry-focused capital and management expertise to support the growth of its portfolio companies. Portfolio companies include: Hammerhead Distribution, a holding company for distributors of roofing, siding and other specialized building materials used residential and commercial construction; Hi-Tech Rubber, a leading molder of precision elastomeric components principally for the medical industry; Allied Extruders, a leading regional manufacturer of polyethylene plastic films serving the flexible packaging industry; and Nutritional Laboratories International, one of North America's leading manufacturers of quality nutritional supplements.
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