NEWS

BETHESDA, Md., Oct. 14 /PRNewswire/ -- American Capital Strategies, Ltd. (Nasdaq:ACAS) announced today that it has funded $6.1 million in senior debt, subordinated debt and preferred equity for Four-S Baking Company of Los Angeles, Calif., as part of a $19.8 million total financing.

The funds will be used by Four-S to finance a portion of the acquisition of the Los Angeles region Weber brand pan white bread business from Interstate Brands Corp. Weber is the number one market share white bread in Southern California. The total financing includes senior credit facilities from LaSalle National Bank, a seller note, and an equity investment by Four-S management.

American Capital Strategies is a merchant banking and specialty finance company which makes senior debt, subordinated debt and equity investments in management and employee buyouts, and in growth and liquidity financings of existing companies. ACAS is prepared to invest $1 to $20 million in businesses that typically have sales of $10 to $200 million, and is able to source substantial additional capital for much larger transactions.

Harlan Rimer, President and CEO of Four-S Baking Company, said: ``This acquisition dramatically strengthens our business by bringing us into the retail marketplace with the strongest brand in our region. Los Angeles consumers can be sure that we will maintain the quality, value, and taste which have made Weber's the number one brand in Southern California for many years. And, they can look forward to a variety of fine new breads in our markets over the next year, as we show how local employee owners can take on a major project like Weber's and be successful.''

The acquisition will almost double the size of Four-S, a well-established, rapidly growing company which was already the largest player in the Los Angeles market for restaurant and institutional bread products. A subsidiary of ACAS made an initial investment in Four-S (then known as Good Stuff Food Company, Inc.) in 1994. Four-S is majority-owned by its employees through an Employee Stock Ownership Plan (``ESOP'').

Malon Wilkus, President and CEO of ACAS, said: ``This is the first investment ACAS has made since our public offering in late August. We are proud to be able to increase our investment in this fast growing company, and we look forward to a long association with Four-S and its employee-owners.''

Adam Blumenthal, Executive Vice President of ACAS and Four-S board chairman, said: ``Three years ago, when we joined with a new management team and the employees of Four-S to purchase their company out of bankruptcy, few outside the company believed a turnaround of this magnitude was possible. We are excited that the management and employee-owners at Four-S have made their company the industry leader in this short period.''

ACAS and its affiliates, which are substantial minority stockholders in Four-S, initiated the transaction, acted as financial advisor to Four-S in the negotiations, and sourced additional financing from LaSalle National Bank.