Bethesda, MD -- American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that it has entered in to a strategic relationship with Gladstone Capital Corporation (Nasdaq: GLAD). Separately, the company also announced that it closed two weeks ago on its sale of 1.8 million shares of common stock at $28.25 per share for a total gross proceeds of approximately $50.9 million. The sale was underwritten by First Union Securities Inc., a subsidiary of Wachovia Corporation (NYSE: WB).
"As senior lenders continue to pull back, having a relationship with a cash flow financing source such as Gladstone Capital will allow us to better serve the financing needs of strong middle market companies," said Malon Wilkus, American Capital Chairman, President and CEO. "In addition, considering our complementary business plans, we believe there can be substantial mutual benefit to referrals of investment opportunities and other cooperative activities between American Capital and Gladstone Capital."
American Capital and Gladstone Capital, a newly formed business development company, have agreed to refer middle market investment opportunities to each other. In addition, American Capital purchased 3 percent of Gladstone Capital's common stock at its IPO.
"With respect to our overnight offering of 1.8 million shares of common stock, we were able to close the transaction on September 12, a day after the terrible atrocities in New York, Washington and Pennsylvania, thanks to the outstanding work of First Union Securities," said Wilkus. "As a result, American Capital reduced the outstanding balance on our $225 million credit facility to approximately $7 million, further positioning ourselves to provide critical capital to growing middle market companies. We would also like to extend our heartfelt sympathies to the injured and the friends and families of the innocent people who gave their lives."
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.This press release contains forward-looking statements. 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.
