American Capital Posts 125% Total Shareholder Return Since IPO, 62% Increase in First Quarter New Investments

Apr 25, 2001, 01:00 ET from American Capital Strategies Ltd.

    BETHESDA, Md., April 25 /PRNewswire/ -- American Capital Strategies Ltd.
 (Nasdaq: ACAS) released today highlights from the first quarter 2001.  Dollar
 volume of first quarter new investments increased 62% over 2000 and total
 shareholder return since the Company's August 1997 IPO stood at 124.5% at the
 end of the quarter.
 
     Growth in First Quarter New Investments, 1998-2001 ($Millions)
         Q1 New
       Investments
     1998      $29.5
     1999      $26.2
     2000      $32.0
     2001      $52.0
 
     For a line graph of this chart, go to
 http://www.americancapital.com/newsletter/report042001.html
 
     *  $20 Million in Kelly Aerospace
 
     In February American Capital invested $20 million in Kelly Aerospace Inc.
 in the form of $10 million of senior notes and $10 million of senior
 subordinated debt with warrants.  Kelly is the leading designer, manufacturer
 and marketer of turbocharger system products and electrical and fuel system
 components for both general aviation OEM airframe manufacturers and the
 general aviation aftermarket with revenues in excess of $40 million.  They
 also manufacture related turbocharger products for the performance automotive
 market.  They are using the investment proceeds to recapitalize outstanding
 debt and to complete the acquisitions of the Garrett aviation turbocharger
 line from Honeywell International (NYSE:   HON) and Spearco Performance
 Products, a leading producer of intercoolers for automotive turbocharger
 applications.
 
     *  $9 Million to Acquire Two Storage Tank Companies
 
     In January American Capital invested $9 million of subordinated debt to
 fund the acquisition of Columbian Steel Tank Company and Engineered Stored
 Products by CST Industries Inc. to create the largest steel bolted tank
 manufacturer in the country.  Equity financing was provided by George K. Baum
 Merchant Banc and Don Wagner, CEO of CST.  The acquired businesses manufacture
 and install storage tanks for municipal, industrial and agricultural markets.
 
     *  $12 Million to Acquire Contract Manufacturers
 
     In January Sunvest Industries LLC, a platform holding company American
 Capital has established to acquire contract manufacturers, completed the
 purchase of Dyna-Fab Inc. and Advanced Fabrication Technologies Inc.  In
 December 2000, American Capital invested $12 million in Sunvest in the form of
 senior term debt, senior subordinated debt with warrants and equity.  LaSalle
 Bank provided a revolving line of credit.  Sunvest management's extensive
 network of industry contacts and M&A experience make them excellent investment
 partners for American Capital.  Dyna-Fab, located in Rockland, Mass.,
 primarily serves the semiconductor and specialty OEM markets.  AFT, of
 Hayward, Calif., primarily serves medical and pharmaceutical customers as well
 as semi-conductor and specialty consumer products OEM markets.  They are
 Sunvest's first acquisitions.
 
     *  $8 Million in Chance Coach New Bus Rollout
 
     Chance Coach is the pre-eminent U.S. manufacturer of heavy-duty vintage
 streetcar replicas and a leader in municipal transit busses under thirty feet
 in length.  We first invested in Chance in 1998.  A new $7.5 million revolving
 line of credit will help Chance roll out the Opus, a transit bus offering
 easier access, lower fuel costs, simplified maintenance and longer service
 life than any other vehicle in its class.  Chance has approximately 15 months
 of production backlog of the new Opus bus.  American Capital's total
 investment in Chance is now $17 million.
 
     *  $3 Million to Roll Out New Technology at Chromas
 
     We invested $3 million in subordinated debt at portfolio company Chromas
 Technologies.  Chromas is a leading supplier of analog flexographic printing
 presses to the global packaging and labeling industry, and has recently
 introduced a unique digital press aimed at the same market.  Our investment
 supported product development and working capital at the company.  Chromas was
 acquired by American Capital in September 2000.  Our total investment now
 stands at $25 million.
 
     *  $3.6 Million in Confluence to Finance Growth
 
     We invested $3.6 million in subordinated debt at Confluence Holdings
 Corp., holding company for Wilderness Systems, Inc. and Mad River Canoe Co.,
 the 3rd largest kayak and 2nd largest canoe manufacturer in the US.  American
 Capital's subordinated debt was made alongside of $1.75 million in additional
 equity from a group led by Westbury Equity Partners, the original transaction
 sponsors.  The companies manufacture recreational and touring kayaks and
 canoes; the additional capital was used to fund growth and to reduce the
 company's outstanding senior debt in line with current bank market conditions.
 American Capital financed the combination of these two companies in September
 1998 and our total investment is now $16 million.
 
     *  $4.5 Million in Decorative Surfaces International
 
     DSI has entered into an agreement with several parties to sell its under-
 performing Columbus, OH business lines and assets and will use the anticipated
 proceeds to retire over $17 million of its outstanding debt.  DSI will
 continue to manufacture decorative paper and vinyl surfacing material for the
 home and industrial markets in its new St. Louis facility where it enjoys over
 $50 million in revenues.  American Capital provided $1.5 million of senior
 debt secured by the proceeds of the sale of a joint venture asset, which is
 expected to be repaid shortly.  American Capital provided an additional $3.0
 million for working capital financing funded as a junior participation in the
 senior secured facility.  American Capital's total investment in DSI is $22.4
 million.
 
     *  Westwind Restructuring
 
     As part of a restructuring of portfolio company Westwind, American Capital
 collected the accrued interest on our note and then converted our subordinated
 note into preferred and common stock.  Together with other restructuring, this
 diminishes Westwind's debt load, substantially reducing the pressure on its
 cash flow and allowing it more operating flexibility within an improved
 capital structure.
 
     *  $2 Million to Assist Acquisition by TransCore
 
     In February American Capital continued its support of portfolio company
 TransCore, a leading competitor in the toll collection and intelligent
 transportation systems industry.  American Capital invested $2 million in new
 convertible preferred stock in support of TransCore's acquisition of DAT
 Services, a provider of freight-exchange services in North America with
 significant market share in the freight-matching and logistics market.  DAT
 operates an extensive electronic information exchange through which its
 customers match loads in need of shipment and trucks available for hire.  This
 is American Capital's second add-on acquisition investment in TransCore, and
 our third overall, with KRG Capital Partners, LLC as equity sponsor.
 
     *  125% Total Return to Shareholders
 
     $10,000 invested in American Capital on August 30, 1997 would have grown
 to $22,450 on March 31, 2001, assuming reinvestment of dividends, a 124.5%
 return.
 
                              Total Shareholder Return
 
                               Since IPO       3 Years Ended     1 Year Ended
                             (August 1997)    March 31, 2001    March 31, 2001
 
     American Capital*           124.5%             52.2%             32.7%
     S&P 500                      29.0               5.3             -22.6
     Nasdaq Composite             15.9               0.2             -59.8
     Nasdaq Financial 100         10.0             -12.7              21.2
     Russell 2000                  6.4              -6.3             -16.4
     Dow Jones 30 Industrials     29.6              12.3              -9.6
 
     *Data for American Capital assumes reinvestment of all dividends.  Past
 performance does not guarantee future results.
 
     For more information, go to
 http://www.acas1.com/Slide/Q4-2000/html/38.html
 
     Corporate News
 
     *  New Board Member
 
     Kenneth D. Peterson Jr., Chairman and CEO of Columbia Ventures
 Corporation, was elected to the American Capital Board of Directors in
 January.  Ken is also director of the International Aluminum Corporation
 (NYSE:   IAL) and the Washington Institute Foundation, a public policy
 organization advocating free markets.
     "Having resurrected from closure one of the largest aluminum smelters in
 the US, Ken Peterson proceeded to start or acquire 15 additional companies
 over the following 15 years, reaping extraordinary returns as he sold off many
 of his holdings.  He has recently completed the construction of the first
 aluminum smelter in Iceland," said American Capital Chairman and CEO Malon
 Wilkus.  "He has an outstanding track record as an entrepreneur, and we look
 forward to his contribution to our Board."
 
     *  $225 Million Credit Facility Renewed - Advance Rate Increased to 75%
 
     First Union has renewed our $225 million Commercial Paper Conduit credit
 facility for an additional year. Our advance rate has increased from 50% to
 75%, mirroring the advance rate on our $150 million investment grade term debt
 securitization. In addition, First Union reduced the interest rate on the
 facility from LIBOR plus 150 basis points to LIBOR plus 125 basis points.  We
 were able to increase our advance partially due to the fact that the rating
 agencies' coverage of the term debt transaction provides increased
 transparency of our portfolio. The credit facility provides efficient capital
 that enables us to respond quickly to investment opportunities.
 
     *  New York Deal Team Continues to Grow
 
     Leon Potok joined American Capital as a Principal in January, bringing the
 number of New York based Principals to four.  In the prior ten years, Leon has
 served as an investment banker providing financial advisory and restructuring
 services, most recently as a principal and co-founder of a private firm.  He
 focused on advisory services to employee groups on the financial viability and
 competitive position of employers, the restructuring of employer financial
 obligations and their access to capital markets, and employee buyout
 feasibility analyses.  Leon previously worked as Senior Investment Analyst in
 the Risk Capital Group at New York Life Insurance Company.  Over the course of
 nearly four years, he was involved in directing or monitoring more than $400
 million in leveraged buy-out, venture capital and natural resource
 investments.
 
     American Capital is a publicly traded buyout and mezzanine fund.  American
 Capital is an equity partner in management and employee buyouts; invests in
 debt and equity of companies led by private equity firms, and provides capital
 directly to private and small public companies.  American Capital funds
 growth, acquisitions and recapitalizations.
     Companies interested in learning more about American Capital's flexible
 financing and transactional expertise should contact John Hoffmire, Senior
 Investment Officer, at 781-862-4447, or visit the website at
 www.AmericanCapital.com.
 
     This press release contains forward-looking statements that are made
 pursuant to the safe harbor provisions of the Private Securities Litigation
 Reform Act of 1995.  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 or
 national economic conditions, or changes in the conditions of the industries
 in which American Capital has made investments.
     This press release is neither an offer to sell nor a solicitation of an
 offer to buy shares. Such an offer is made by prospectus only.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X95186625
 
 

SOURCE American Capital Strategies Ltd.
    BETHESDA, Md., April 25 /PRNewswire/ -- American Capital Strategies Ltd.
 (Nasdaq: ACAS) released today highlights from the first quarter 2001.  Dollar
 volume of first quarter new investments increased 62% over 2000 and total
 shareholder return since the Company's August 1997 IPO stood at 124.5% at the
 end of the quarter.
 
     Growth in First Quarter New Investments, 1998-2001 ($Millions)
         Q1 New
       Investments
     1998      $29.5
     1999      $26.2
     2000      $32.0
     2001      $52.0
 
     For a line graph of this chart, go to
 http://www.americancapital.com/newsletter/report042001.html
 
     *  $20 Million in Kelly Aerospace
 
     In February American Capital invested $20 million in Kelly Aerospace Inc.
 in the form of $10 million of senior notes and $10 million of senior
 subordinated debt with warrants.  Kelly is the leading designer, manufacturer
 and marketer of turbocharger system products and electrical and fuel system
 components for both general aviation OEM airframe manufacturers and the
 general aviation aftermarket with revenues in excess of $40 million.  They
 also manufacture related turbocharger products for the performance automotive
 market.  They are using the investment proceeds to recapitalize outstanding
 debt and to complete the acquisitions of the Garrett aviation turbocharger
 line from Honeywell International (NYSE:   HON) and Spearco Performance
 Products, a leading producer of intercoolers for automotive turbocharger
 applications.
 
     *  $9 Million to Acquire Two Storage Tank Companies
 
     In January American Capital invested $9 million of subordinated debt to
 fund the acquisition of Columbian Steel Tank Company and Engineered Stored
 Products by CST Industries Inc. to create the largest steel bolted tank
 manufacturer in the country.  Equity financing was provided by George K. Baum
 Merchant Banc and Don Wagner, CEO of CST.  The acquired businesses manufacture
 and install storage tanks for municipal, industrial and agricultural markets.
 
     *  $12 Million to Acquire Contract Manufacturers
 
     In January Sunvest Industries LLC, a platform holding company American
 Capital has established to acquire contract manufacturers, completed the
 purchase of Dyna-Fab Inc. and Advanced Fabrication Technologies Inc.  In
 December 2000, American Capital invested $12 million in Sunvest in the form of
 senior term debt, senior subordinated debt with warrants and equity.  LaSalle
 Bank provided a revolving line of credit.  Sunvest management's extensive
 network of industry contacts and M&A experience make them excellent investment
 partners for American Capital.  Dyna-Fab, located in Rockland, Mass.,
 primarily serves the semiconductor and specialty OEM markets.  AFT, of
 Hayward, Calif., primarily serves medical and pharmaceutical customers as well
 as semi-conductor and specialty consumer products OEM markets.  They are
 Sunvest's first acquisitions.
 
     *  $8 Million in Chance Coach New Bus Rollout
 
     Chance Coach is the pre-eminent U.S. manufacturer of heavy-duty vintage
 streetcar replicas and a leader in municipal transit busses under thirty feet
 in length.  We first invested in Chance in 1998.  A new $7.5 million revolving
 line of credit will help Chance roll out the Opus, a transit bus offering
 easier access, lower fuel costs, simplified maintenance and longer service
 life than any other vehicle in its class.  Chance has approximately 15 months
 of production backlog of the new Opus bus.  American Capital's total
 investment in Chance is now $17 million.
 
     *  $3 Million to Roll Out New Technology at Chromas
 
     We invested $3 million in subordinated debt at portfolio company Chromas
 Technologies.  Chromas is a leading supplier of analog flexographic printing
 presses to the global packaging and labeling industry, and has recently
 introduced a unique digital press aimed at the same market.  Our investment
 supported product development and working capital at the company.  Chromas was
 acquired by American Capital in September 2000.  Our total investment now
 stands at $25 million.
 
     *  $3.6 Million in Confluence to Finance Growth
 
     We invested $3.6 million in subordinated debt at Confluence Holdings
 Corp., holding company for Wilderness Systems, Inc. and Mad River Canoe Co.,
 the 3rd largest kayak and 2nd largest canoe manufacturer in the US.  American
 Capital's subordinated debt was made alongside of $1.75 million in additional
 equity from a group led by Westbury Equity Partners, the original transaction
 sponsors.  The companies manufacture recreational and touring kayaks and
 canoes; the additional capital was used to fund growth and to reduce the
 company's outstanding senior debt in line with current bank market conditions.
 American Capital financed the combination of these two companies in September
 1998 and our total investment is now $16 million.
 
     *  $4.5 Million in Decorative Surfaces International
 
     DSI has entered into an agreement with several parties to sell its under-
 performing Columbus, OH business lines and assets and will use the anticipated
 proceeds to retire over $17 million of its outstanding debt.  DSI will
 continue to manufacture decorative paper and vinyl surfacing material for the
 home and industrial markets in its new St. Louis facility where it enjoys over
 $50 million in revenues.  American Capital provided $1.5 million of senior
 debt secured by the proceeds of the sale of a joint venture asset, which is
 expected to be repaid shortly.  American Capital provided an additional $3.0
 million for working capital financing funded as a junior participation in the
 senior secured facility.  American Capital's total investment in DSI is $22.4
 million.
 
     *  Westwind Restructuring
 
     As part of a restructuring of portfolio company Westwind, American Capital
 collected the accrued interest on our note and then converted our subordinated
 note into preferred and common stock.  Together with other restructuring, this
 diminishes Westwind's debt load, substantially reducing the pressure on its
 cash flow and allowing it more operating flexibility within an improved
 capital structure.
 
     *  $2 Million to Assist Acquisition by TransCore
 
     In February American Capital continued its support of portfolio company
 TransCore, a leading competitor in the toll collection and intelligent
 transportation systems industry.  American Capital invested $2 million in new
 convertible preferred stock in support of TransCore's acquisition of DAT
 Services, a provider of freight-exchange services in North America with
 significant market share in the freight-matching and logistics market.  DAT
 operates an extensive electronic information exchange through which its
 customers match loads in need of shipment and trucks available for hire.  This
 is American Capital's second add-on acquisition investment in TransCore, and
 our third overall, with KRG Capital Partners, LLC as equity sponsor.
 
     *  125% Total Return to Shareholders
 
     $10,000 invested in American Capital on August 30, 1997 would have grown
 to $22,450 on March 31, 2001, assuming reinvestment of dividends, a 124.5%
 return.
 
                              Total Shareholder Return
 
                               Since IPO       3 Years Ended     1 Year Ended
                             (August 1997)    March 31, 2001    March 31, 2001
 
     American Capital*           124.5%             52.2%             32.7%
     S&P 500                      29.0               5.3             -22.6
     Nasdaq Composite             15.9               0.2             -59.8
     Nasdaq Financial 100         10.0             -12.7              21.2
     Russell 2000                  6.4              -6.3             -16.4
     Dow Jones 30 Industrials     29.6              12.3              -9.6
 
     *Data for American Capital assumes reinvestment of all dividends.  Past
 performance does not guarantee future results.
 
     For more information, go to
 http://www.acas1.com/Slide/Q4-2000/html/38.html
 
     Corporate News
 
     *  New Board Member
 
     Kenneth D. Peterson Jr., Chairman and CEO of Columbia Ventures
 Corporation, was elected to the American Capital Board of Directors in
 January.  Ken is also director of the International Aluminum Corporation
 (NYSE:   IAL) and the Washington Institute Foundation, a public policy
 organization advocating free markets.
     "Having resurrected from closure one of the largest aluminum smelters in
 the US, Ken Peterson proceeded to start or acquire 15 additional companies
 over the following 15 years, reaping extraordinary returns as he sold off many
 of his holdings.  He has recently completed the construction of the first
 aluminum smelter in Iceland," said American Capital Chairman and CEO Malon
 Wilkus.  "He has an outstanding track record as an entrepreneur, and we look
 forward to his contribution to our Board."
 
     *  $225 Million Credit Facility Renewed - Advance Rate Increased to 75%
 
     First Union has renewed our $225 million Commercial Paper Conduit credit
 facility for an additional year. Our advance rate has increased from 50% to
 75%, mirroring the advance rate on our $150 million investment grade term debt
 securitization. In addition, First Union reduced the interest rate on the
 facility from LIBOR plus 150 basis points to LIBOR plus 125 basis points.  We
 were able to increase our advance partially due to the fact that the rating
 agencies' coverage of the term debt transaction provides increased
 transparency of our portfolio. The credit facility provides efficient capital
 that enables us to respond quickly to investment opportunities.
 
     *  New York Deal Team Continues to Grow
 
     Leon Potok joined American Capital as a Principal in January, bringing the
 number of New York based Principals to four.  In the prior ten years, Leon has
 served as an investment banker providing financial advisory and restructuring
 services, most recently as a principal and co-founder of a private firm.  He
 focused on advisory services to employee groups on the financial viability and
 competitive position of employers, the restructuring of employer financial
 obligations and their access to capital markets, and employee buyout
 feasibility analyses.  Leon previously worked as Senior Investment Analyst in
 the Risk Capital Group at New York Life Insurance Company.  Over the course of
 nearly four years, he was involved in directing or monitoring more than $400
 million in leveraged buy-out, venture capital and natural resource
 investments.
 
     American Capital is a publicly traded buyout and mezzanine fund.  American
 Capital is an equity partner in management and employee buyouts; invests in
 debt and equity of companies led by private equity firms, and provides capital
 directly to private and small public companies.  American Capital funds
 growth, acquisitions and recapitalizations.
     Companies interested in learning more about American Capital's flexible
 financing and transactional expertise should contact John Hoffmire, Senior
 Investment Officer, at 781-862-4447, or visit the website at
 www.AmericanCapital.com.
 
     This press release contains forward-looking statements that are made
 pursuant to the safe harbor provisions of the Private Securities Litigation
 Reform Act of 1995.  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 or
 national economic conditions, or changes in the conditions of the industries
 in which American Capital has made investments.
     This press release is neither an offer to sell nor a solicitation of an
 offer to buy shares. Such an offer is made by prospectus only.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X95186625
 
 SOURCE  American Capital Strategies Ltd.