Bethesda, MD -- American Capital Strategies, Ltd. (Nasdaq:ACAS) today announced that First Union Corporation (NYSE: FTU) has invested $15 million in American Capital's online investment bank, www.Capital.com. Launched in July as a financial portal for small and mid-size companies, AmericanCapitalOnline was renamed www.Capital.com and contributed to a newly formed portfolio company, Capital.com, Inc.
In exchange for the $15 million investment, First Union received a 15% equity stake and warrants to acquire up to an additional 5% under certain conditions. Proceeds from the investment will be used to accelerate the development of the site and fund a targeted marketing program aimed at creating brand awareness.
First Union has signed an agreement with Capital.com to be a featured provider of commercial real estate financing. Additionally, Congress Financial will be a featured provider of accounts receivable financing and American Capital will be a featured provider of subordinated debt and equity. Capital.com plans to rapidly add other leading providers of financial products and services for small and mid-size companies.
"First Union's investment in Capital.com is a major milestone for advancing our strategy to create the premier online destination for private companies to access capital," said Malon Wilkus, Chairman and Chief Executive Officer of American Capital. "Capital.com will transform the capital-raising process for private companies, making it dramatically more efficient and cost effective. We intend to brand Capital.com as the leading online provider of business finance and to rationalize one of the most fragmented industries in America."
Capital.com will serve the needs of the fastest-growing segment of the economy, comprised of over 20 million small and mid-size companies, by providing these companies with the ability to raise debt and equity directly from a wide spectrum of some of the finest capital sources in America. Capital.com reduces companies' cost to acquire capital and enhances overall market liquidity and efficiency. Capital.com also adds value to providers by enabling them to establish direct relationships with companies seeking capital and financial services, increasing their deal flow and reducing their transaction costs.
"We are excited to partner with American Capital to provide innovative online financing solutions to small and mid-size companies," said David Carroll, Executive Vice President and Chief E-Commerce Officer of First Union. "Our decision to invest in Capital.com is a direct result of American Capital's leadership in middle market finance and success in utilizing its online investment banking site to generate financing opportunities and to provide value-added services. American Capital has built an industry leading Internet presence, which has the potential to revolutionize business finance and create enormous value." Mr. Carroll will serve on the Board of Directors of Capital.com, Inc.
Mr. Wilkus concluded, "Our Internet strategy has already proven highly effective. Over the past year, 16% of our new financings have found us via our websites. It is already evident that Capital.com will provide American Capital a valuable online asset and a channel to significantly expand our portfolio of quality companies."
American Capital invites its shareholders and analysts to attend the American Capital Analyst Conference Call on Friday, December 17th at 2 p.m. EST. Malon Wilkus and David Carroll will host the call. The dial-in number is (800) 288-8960. Please advise the operator you are dialing in for the American Capital Analyst Call. A digitized replay of the call will be available from December 17, 1999 at 8:00 p.m. to December 27, 1999 at 11:59 p.m. EST. The replay number is 800-475-6701. The access code is 491128. International calls may dial 320-365-3844 and enter the same access code.
During the Analyst Call, we would like to invite you to turn to www.Capital.com and click on the prominent Analyst Call banner in the upper right corner to view slides displaying information concerning some of the issues that will be discussed during the conference call. The slide presentation will be made available on the morning of December 17th. We hope that you will take the time to review the slides in advance of the Analyst Call. We do not intend to review all the slides during the Analyst Call so that we can devote more time to questions and answers.
American Capital is a publicly traded buyout and specialty finance company with capital resources exceeding $460 million. Capital.com provides receivable and inventory financing, machinery and equipment loans and leasing, real estate and construction financing, subordinated debt and equity financing and financing for growth, acquisition, buyouts, ESOPs, Internet development, liquidity and restructurings. Capital.com offers owners and managers access to information and analysis previously available primarily through painstaking research and expensive intermediaries. The site enables users to learn about corporate finance, value their company, build financial models, develop financing memoranda, locate experienced financial professionals and, most critically, source the capital they need, when they need it.
First Union is a leading provider of financial services to more than 16 million customers throughout the East Coast and the nation. At September 30, 1999, First Union had assets of $235 billion. The company operates full-service banking offices in Connecticut, Delaware, Florida, Georgia, Maryland, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Virginia and Washington, D.C. and brokerage offices in 41 states nationwide.
Firstunion.com provides individuals and businesses comprehensive information on financial products, services and planning tools to meet a broad spectrum of needs. The website also contains company information for customers, shareholders and site visitors. First Union offers a wide range of customer-focused online banking services that cater to more than one million online banking and online brokerage customers. Firstunion.com is a key, integrated delivery channel that complements First Union's ATM, First Union Direct, and extensive financial center and brokerage network, allowing customers to bank when, where and how they choose.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.
