BETHESDA, Md., Aug. 18 /PRNewswire/ -- American Capital (Nasdaq: ACAS),today announced the purchase of $8.4 million in subordinated notes issued by Tube City, Inc. This financing coupled with the $9.7 million investment in a subsidiary of Tube City made by American Capital on June 29 brings American Capital's total investment in Tube City to $18.1 million. Heller Financial provided a $93 million senior credit facility to Tube City concurrent with American Capital's investment.
Today's financing reflects the fulfillment of a $6.8 million commitment that was previously announced as part of the June 29th closing along with an incremental $1.6 million investment. These funds will support Tube City's new slag processing contract with a second integrated steel mill, a contract awarded the company in June. The balance of the subordinated debt and the proceeds from the senior notes purchased from Tube City Olympic of Ohio in June financed the company's first slag processing contract at an integrated steel mill.
Tube City is a diversified steel mill service company with sales in excess of $470 million in 1998. The company provides scrap management and slag-processing services under long-term contracts to mini-mills and integrated steel facilities throughout the United States. In addition, Tube City operates a scrap metal brokerage operation serving steel mills in the United States.
Adam Blumenthal, President and Chief Operating Officer of American Capital, said, "We value the opportunity to invest further in the growth of our portfolio companies. The additional funding at Tube City represents the fourth time in three months American Capital has provided additional capital to finance growth in a portfolio company."
CEO of Tube City I Michael Coslov remarked, "American Capital worked closely with our people and Heller Financial to make this refinancing possible. With this closing, we are forging solid working relationships with these financial partners that will help us execute our plans."
American Capital Associate David Ehrenfest Steinglass commented, "This financing, as part of an overall refinancing of the company, strongly positions Tube City to carry out its growth plans. Tube City won a major contract with the second integrated mill immediately before we made our original investment which provides compelling evidence of the growth prospects and competitive success of this organization."
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American Capital is a buyout and specialty finance company with capital resources exceeding $360 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 our flexible financing should contact John Hoffmire, Vice President of Sales and Marketing, at (800) 248-9340 or visit our website at www.AmericanCapitalOnline.com or our shareholder site at www.ACASOnline.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.
