Bethesda, MD - December 18, 2001 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that it has exited its investment in BIW Connector Systems LLC, earning an 18% compounded annual return, and has exited its investment in Cornell Companies Inc., earning a 22% compounded annual return. BIW is a manufacturer of specialized electrical connectors primarily for the oil field and aircraft industries. American Capital invested in BIW in December 1997 with a $3.9 million senior note and a $7 million senior subordinated note with warrants. BIW has been purchased by ITT Industries.
These are American Capital's seventh and eighth exits since its August 1997 IPO. Cornell is one of the leading private sector providers of correctional, juvenile detention, pre-release and treatment services in the United States. In July 2000, American Capital invested $30 million in Cornell in the form of seven year senior subordinated debt with warrants. Cornell's recent public offering of its common stock allowed it to repay the remaining principal balance outstanding on the senior subordinated notes, along with accrued interest and prepayment fees and American Capital sold its remaining warrant position.
Since its IPO, American Capital has realized a compounded annual return of 27% on all of its exited investments. American Capital's annual return to its shareholders from its IPO through the end of November is 25% taking into account reinvestment of over $7.00 of dividends paid during that period.
"American Capital's ability to exit investments in current economic conditions demonstrates the strength of our investments and of our investment model," said Chairman, President and CEO Malon Wilkus. "Our exits have met or exceeded the returns we anticipated at the time of our original investments and the valuations at which they were booked prior to the exit. We continue to meet the capital needs of strong middle market companies and earn excellent returns for our shareholders."
8 Gains Totaling $11.7 MM
IPO to date |
|
| Portfolio Company |
Static Pool |
Amount Invested
$MM |
IRR |
Transaction Type |
| BIW |
Pre-1999 |
$11.1 |
18% |
Sold |
| Cornell |
2000 |
$30.0 |
22% |
Recap |
| The L.A. Studios |
Pre-1999 |
$3.3 |
19% |
Recap |
| Centennial Broadcasting |
Pre-1999 |
$15.0 |
24% |
Sold |
| Electrolux |
Pre-1999 |
$7.5 |
22% |
Repayment |
| o2 wireless |
1999 |
$13.0 |
98% |
IPO |
| Specialty Transportation |
Pre-1999 |
$8.5 |
44% |
Recap |
| 4-S Bakery |
Pre-1999 |
$7.3 |
39% |
Sold |
|
| TOTAL |
|
$95.7 |
27% |
|
|
American Capital is a publicly traded buyout and mezzanine fund with capital resources exceeding $1 billion. 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. The Company has paid or declared $7.76 per share in dividends since going public in 1997.
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.
