European Capital Portfolio Company Metall Technologie Holding Establishes Sino-Foreign Joint Venture

ST. PETER PORT, Guernsey, Jan. 5 /PRNewswire/ -- European Capital Limited ("European Capital") announced today that its portfolio company Metall Technologie Holding ("Metall Technologie"), a leading European manufacturer of high-end heat treatment industrial furnaces, has established a sino-foreign joint venture with Shanghai Huisen Industrial Furnaces Company Limited, one of the fastest growing manufacturers of heat treatment industrial furnaces in the People's Republic of China ("China"). Post-closing, Metall Technologie holds a 70% stake in newly established Shanghai Huisen-MTH Industrial Furnaces Company Limited (the "JV").

"The managers of Metall Technologie, one of our portfolio companies with the largest geographical footprints, chose to partner with European Capital back in 2006 primarily because of our willingness and capability to deal with international external growth," said Etienne Haubold, Director of European Capital Financial Services. "We now expect Metall Technologie to further consolidate an already long-established leading position in the Chinese heat treatment furnaces market."

"The Chinese market has been the third largest market of Metall Technologie over the recent years, as long-time European clients have been setting up or supporting operations in China," said Olivier Meline, Manager, European Capital Financial Services. "Metall Technologie -- through the establishment of the JV and a wider product offering -- will now be in a position to better address the extremely dynamic domestic market in China."

European Capital originally invested euro 104 million in the One Stop Buyout(TM) of Metall Technologie in December 2006. With main offices in France and Germany, and headquartered in Menden, Germany, Metall Technologie consists of four operating entities all trading under their own brand names: BMI in France and IVA, Mahler, and Schmetz in Germany. Metall Technologie focuses exclusively on high-end furnaces requiring an advanced level of technology to meet strict specifications such as high temperatures, control accuracy and consistent heat application in all areas of the furnace chambers. Industrial heat treatment furnaces are used by a broad range of industries to modify a material's surface or physical characteristics in order to increase flexibility, wear-resistance or hardness. Metall Technologie designs, assembles and markets furnaces and also performs after-market services to its installed base of approximately 4,000 units. In addition to its four main European subsidiaries, the Company also operates a joint-venture in Poland. Its products are sold to blue-chip customers in more than 35 industries, including heat treatment service, aerospace, automotive, machinery and energy.

For more information about European Capital's investment in Metall Technologie, please go to http://www.europeancapital.com/our_portfolio/companies/metall_technologie.html.

Founded in 2006, Shanghai Huisen Industrial Furnaces Company Limited designs, manufactures and distributes atmospheric heat-treatment furnaces primarily in China and is one of the fastest growing heat-treatment furnace manufacturers in China. Shanghai Huisen Industrial Furnaces Company Limited operates a modern, recently extended 4,400 square meter production site located in the Minhang district of Shanghai.

"We are confident that we have chosen the best possible partner for our initiative," said Stefan Blum, Metall Technologie Managing Director. "Dr Zeng, founder of Shanghai Huisen Industrial Furnaces Company Limited, is not only a successful entrepreneur and manager, he also has a significant experience of working with Europe -- he holds a German PhD in Engineering and headed the Chinese subsidiary of a Germany-based international company for 9 years -- and he is perfectly trilingual."

"In addition to the expected growth in the Chinese market, we are delighted that the JV will enable us to offer a closer and more efficient service center to our long-time clients in China," said Luigi Dall'o, Metall Technologie Managing Director. "Among other items, we're in the process of starting to stock spare parts on the JV's premises to dramatically reduce lead-time for our clients who have maintenance needs."

"Shanghai Huisen Industrial Furnaces Company Limited's integration with Metall Technologie will further help to strengthen our position in China," said Dr. Aiqun Zeng, Managing Director of Shanghai Huisen-MTH Industrial Furnaces Company Limited. "We are confident that our partnership has been very carefully prepared prior to the establishment of the JV, as our teams took the time to get to know each other and review all potential commercial and technical opportunities to develop. As a result, the synergies between both Chinese and European teams have been effective from day one."

ABOUT EUROPEAN CAPITAL

European Capital is an investment company for pan-European equity, mezzanine and senior debt investments with euro 1.3 billion in assets under management. It is managed by European Capital Financial Services (Guernsey) Limited ("ECFSG" or the "Investment Manager"), a wholly-owned affiliate of American Capital, Ltd.

ABOUT AMERICAN CAPITAL

American Capital is a publicly traded private equity firm and global asset manager with $12 billion in capital resources under management. American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate and structured products. Founded in 1986, American Capital currently has eight offices in the U.S., Europe and Asia. For further information, please refer to www.AmericanCapital.com.

This press release contains forward-looking statements. The statements regarding expected results of European Capital and/or 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 European Capital and/or American Capital has made investments.

    Contact:  European Capital Financial Services Limited, Tel: + 33
     (0)1-40-68-06-66
    Etienne Haubold, Director
    Olivier Meline, Manager

SOURCE European Capital Limited