Bethesda, MD - September 26, 2002 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has invested $15 million to fund the combination of its portfolio company Inca Metal Products with the Kingway Material Handling Company Inc. Kingway is a leading designer and manufacturer of storage, handling and order selection systems for the material handling industry, and was sold by Reunion Industries Inc. American Capital's investment takes the form of subordinated notes with warrants and equity. This is the second strategic transaction that American Capital has financed for Inca. Both Kingway and Inca management are investing in the transaction, and Fleet Capital is the senior lender.
"This is an excellent example of American Capital's ability to assist in the ongoing growth of a portfolio company," said COO Ira Wagner. "In this transaction, Inca is combining with one of its largest competitors. The combined Inca/Kingway is now the third largest rack manufacturer in the US, with a substantial presence in each of the industry's product categories. This transaction brings our new investment total for 2002 to approximately $350 million, which is on track to meet our forecast of $475 to $550 million for the year."
American Capital has invested more than $500 million in the past twelve months.
Click here for more information about American Capital's portfolio.
"Inca's combination with Kingway will allow the companies to serve their customers and material handling distributors from three manufacturing locations - Texas, Georgia and Ohio - with a full breadth of roll form, structural and cantilever rack," said Kingway President Tony Stewart, who will become Chief Executive Officer of the combined companies. "In addition, the combined entity is a leading provider of pick-to-lights systems, gravity flow racks and material handling accessories."
American Capital Principal and Managing Director Gordon O'Brien commented, "We are very pleased to have consummated this combination in an extremely difficult senior debt market. This transaction is a great example of how we can add value to portfolio companies during the current economic environment."
American Capital initially invested in Inca in September 1999 and acquired Clymer Enterprises in June 2000. Inca is a leading manufacturer of steel products for the construction, distribution and manufacturing industries. Existing facilities, operating near Dallas, TX and Lima, OH, produce steel storage racks, shelving products, mechanical and structural steel tubes, agricultural equipment and provide toll processing services for customers. The Kingway combination adds a rack manufacturing and engineering facility in Acworth, GA and a computer assisted picking system, or CAPS, facility in Exeter, NH. Employment for the combined companies is approximately 550. Customers include Walmart, K-Mart, Staples and L'Oreal.
"Our relationship with American Capital is critical to Inca's growth, allowing us to increase market share, enhance internal systems, and better serve our customers," said current Inca CEO David Rosenfield. "With the Kingway combination, Tony Stewart, the current President of Kingway, will assume responsibility for the operations of the combined companies as I assume the Chairman's role. This will help to speed the implementation of synergies between the two organizations while adding depth to our management team."
Click here for more information about the synergies of the Inca/Kingway combination.
American Capital has a declared a $.66 per share dividend to be paid on October 1, 2002 to record holders as of September 12, 2002. This dividend is an 18% increase over the third quarter 2001 regular dividend of $0.56 per share. American Capital has paid or declared $9.64 in dividends since its August 1997 IPO at $15.00 per share. American Capital forecast $2.54 to $2.62 of net operating income per share for 2002.
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 private equity sponsored buyouts, and provides capital directly to private and small public companies. American Capital provides senior debt, mezzanine debt and equity to fund 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.
