BETHESDA, Md., June 30 /PRNewswire/ -- American Capital Strategies, Ltd. (Nasdaq:ACAS) today announced it has invested $10 million in subordinated debt with warrants of Erie County Plastics Corporation. Erie Plastics is a nationally recognized leader in the manufacture of custom injection molded plastic packaging components, serving some of the best known names in the consumer products industry including Procter & Gamble, Gillette, Wyeth Pharmaceuticals and Alcoa. For example, Erie is a major supplier of products such as laundry detergent pour spouts to Procter & Gamble for such products as Tide, Dash and Bold. The company, which had $75 million in 1998 revenues, provides superior customer service through its industry-leading design and engineering program and its exceptionally high quality levels.
Erie will use the proceeds to consolidate and expand its manufacturing and warehousing facilities. Capital improvements, equipment updates and increased efficiencies due to the expanded floor space will move Erie one step further in the company's long-range planning. The new facility will expand manufacturing floor space by more than 150%.
American Capital Principal Joe Bute commented, "Erie has a first class management team that is able to take ideas for change and move quickly to implement them. We believe it is well-positioned for rapid growth and look forward to working with such a dynamic team."
Adam Blumenthal, Chief Operating Officer of American Capital, noted, "Erie has achieved success by applying cutting edge manufacturing disciplines to an industry where most players operate at significantly lower standards. We believe this discipline will drive substantial growth, making Erie the kind of company we are delighted to join in partnership. This is our first investment in the packaging industry. It further diversifies American Capital's portfolio of investments. It also represents our second recent investment with a western Pennsylvania company. Yesterday we announced a $16.5 million total commitment and investment in Tube City (based in Glassport, PA), a leading supplier of mill services and raw materials to the steel industry in the United States. This week, we have deployed $34 million in capital in three outstanding companies, which makes a strong ending to our quarter."
Erie has facilities in Pennsylvania, Massachusetts and Ohio. Erie Plastics President Paul "Hoop" Roche added, "Plastics will be an expanding part of packaging for years to come. We are pleased to have American Capital join with us in our expansion plans and as a partner in the plastics industry for a long time to come."
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American Capital is a buyout and specialty finance company with capital resources exceeding $275 million. American Capital invests in senior debt, subordinated debt and equity in middle market companies in need of capital for growth, acquisitions, ESOP buyouts, management buyouts, liquidity and restructurings. Companies interested in learning more about American Capital and its unique and flexible financing should contact John Hoffmire, Vice President of Sales and Marketing, at (800) 248-9340 or visit its Web site at www.American-Capital.com or its shareholder site at www.ACASOnline.com.
