Bethesda, MD -- American
Capital Strategies, Ltd. (NASDAQ: ACAS), a buyout and specialty finance company, today announced
it has provided $7 million in financing to partially fund the buyout
of A&M Cleaning Products. The American Capital investment, part
of a $19 million financing package, which includes senior debt from
Wachovia Bank and an equity investment arranged by Business Growth
Partners, a southern-California-based private equity firm, was used
to purchase A&M from family owners, and to provide capital for
the expansion of the company's sales beyond its core markets in
the Southeastern US. The prior owners will retain a minority equity
stake in A&M.
A&M manufactures
and markets a dynamic line of multipurpose cleaners under the brand
name Greased Lighting. The Company has captured a significant market
position in the Southeast, and enjoys distribution in the Southwest
and New England. It is also implementing a national rollout of this
successful brand through leading retailers. In addition to providing
the family shareholders partial liquidity, proceeds of the financing
will support this growth. The market expansion will be further accelerated
by the addition of a new, extremely experienced management team
that has joined the Company and co-invested with American Capital
in the acquisition.
American Capital's
investment in A&M consists of $6 million of senior subordinated
debt and $1 million of preferred stock. Wachovia Bank is providing
a senior term loan and a revolving credit facility to the Company.
Business Growth Partners identified the acquisition opportunity
and provided $3 million of preferred stock through an affiliated
investment partner.
"Our investment
in A&M reflects the company's proven strength in its market,
and in the talents of the exceptional management team that Business
Growth Partners assembled to lead this company," said American
Capital President and Chief Operating Officer Adam Blumenthal. "It's
another example of American Capital's ability to form effective
partnerships with other private equity firms and traditional lenders
to assist a business in need of growth capital."
"The new management
team has hit the ground running," said John Thornton, American
Capital Principal. "This team of highly incentivized industry
veterans, with many decades of directly relevant sales, marketing,
manufacturing and merchandising experience from competitive and
comparable brands, brings extensive industry knowledge, contacts
and experience and puts the company in a great position for future
growth and acquisitions. They recognized an opportunity to bring
professional management skills to a company which has a great product
and great growth opportunities."
Greased Lightning
has achieved considerable brand awareness in the Southeast through
its association with stock car racing as well as in depth consumer
sampling. Its web site, www.greased-lightning.com, offers an extensive menu of cleaning tips and instructions as well
as consumer testimonials.
As a result
of this transaction, A&M will be able to go national with a
highly successful consumer product line-up that we feel has only
begun to realize its potential," said Jerry Peters, A&M's
new CEO and President. "Because American Capital has the ability
to act as a long term partner and to provide additional funding
in the future, they were the best partner for our plans for product
line extensions, acquisitions, and expansion of the brand beyond
the Southeast."
American Capital
is a buyout and specialty finance company. ACAS acts as an equity
partner in management and employee buyout transactions; invests
debt and equity in support of companies led by sophisticated private
equity firms, and makes strategic investments in private and small
public companies. American Capital funds growth, acquisitions and
recapitalizations.
Companies interested
in learning more about American Capital's flexible financing should
contact John Hoffmire, Vice President of Sales and Marketing, at
(800) 248-9340, or visit our website at www.AmericanCapital.com.
Capital.com, Inc.,
the source for business finance, a portfolio company of American
Capital, provides access to 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. Companies in need of financing or information
about financial services should contact Capital.com at Info@Capital.com, or call Harry Kelly, Vice President, at (212) 213-2009.
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.
For more information about A&M Cleaning Products, visit the American
Capital website.
