Bethesda, MD -- American Capital Strategies, Ltd. (Nasdaq:ACAS), a buyout and mezzanine fund, announced today it has purchased $30 million of senior subordinated notes with warrants from Goldman Industrial Group of Boston, MA and its affiliates. Goldman owns a group of machine tool companies that have set standards for quality within their respective industries and technologies. American Capital's investment will provide permanent financing and refinance an existing bridge loan put in place for the acquisition of Bridgeport Machines, Inc. in August, 1999.
Bridgeport Machines is a leading manufacturer of vertical machining centers (VMCs) and manual milling machines. VMCs are automated machine tools that make one or multiple machine parts according to computerized instructions. Bridgeport's manual milling machines have attained a status known only to a few essential products — its name is synonymous with its function. "To Bridgeport" means to employ the manual milling machine manufactured by the company to shape a piece of metal.
Other major Goldman companies include Bryant Grinder Corporation and Fellows Corporation. Bryant is the leading U.S. company in precision grinding technology and Fellows is a leader in producing gear shaping machines. The two make large, customized, automated manufacturing systems used in the manufacture of capital goods and consumer durables. Both companies have a strong presence in the automobile industry and in precision bearings manufacturing. Customers include the big three auto companies, major auto industry suppliers and other major industrial companies.
"An investment in Goldman is an investment in a vital component of American industry," said American Capital President and COO Adam Blumenthal. "This investment came to us because conventional equity and debt markets have been turning their backs on companies with good assets, strong brands, high market shares and real cash flow. We hope to see substantial long term value realized from this investment, and we expect to see other, similar opportunities this year."
"The Goldman companies are well positioned to capitalize on their technologies and brand names as well as their extensive installed base of machine tools," said Ira Wagner, American Capital Principal and Senior Investment Officer. "The new owners and new management at Bridgeport will be able to take Bridgeport forward with a retooled domestic product line. In particular, they are poised to expand within the important and growing market for vertical machining centers." Industry forecasts point to a growing market for VMCs, which have
higher precision cutting capabilities and greater capacity for mass production than other machine tools.
"American Capital's investment provides us with a long term financing partner," said Gregory I. Goldman, the President and CEO of the Goldman Industrial Group. "We are now fully focused on an aggressive sales and marketing strategy for Bridgeport and Bridgeport's new VMC products, and Fellows and Bryant continue to be leaders in the U.S. in their respective technologies. We are now able to build on our cost reduction efforts and the reengineering of our production process to position ourselves for the future."
American Capital is a publicly traded buyout and mezzanine fund. American Capital is an equity partner in management and employee buyouts; invests in debt and equity of companies led by private equity firms, and provides capital directly to private and small public companies. American Capital funds growth, acquisitions and recapitalizations.
Companies interested in learning more about American Capital's flexible financing and ability to provide senior debt, subordinated debt and equity should contact Mark Opel, Principal, at (800) 248-9340, or visit our website.
Capital.com, Inc., a portfolio company of American Capital Strategies, Ltd. (Nasdaq:ACAS), is a business finance portal where premier financing sources compete to provide receivable and inventory financing, machinery and equipment loans and leasing, real estate and construction financing, subordinated debt and equity financing for growth, acquisitions, management buyouts, liquidity, recapitalizations, ESOP transactions and SBA loans. 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 (646) 935-1100.
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.
