Bethesda, MD - December 12, 2002 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that it has exited its investment in Crosman Corporation, earning a 19% compounded annual return, and exited its investment in JAAGIR LLC, also earning a 19% compounded annual return. Both companies, as a result of refinancings, repaid their original notes and $600,000 of PIK notes and also purchased American Capital's warrants. American Capital earned $441,000 of long-term capital gains on these exits.
"Successful exits are the ultimate measure of American Capital's business model," said American Capital Chairman, President and CEO Malon Wilkus. "Despite the difficult economic environment, American Capital continues to demonstrate its ability to both support excellent middle market companies in need of capital as well as build shareholder value. We look forward to additional exits in the near-term."
"Both of these exits were for values greater than the fair values booked at September 30, 2002," said John Erickson, CFO. "Exits are the absolute data points that confirm valuations. We are pleased that we continue to exit investments at value levels that confirm our valuations."
American Capital invested $4 million in senior subordinated notes with warrants issued by Crosman in October 1999, representing 3.5% of the ownership. Crosman is the world's leading manufacturer of airguns and accessories serving large retailers, sporting goods retail chains and catalog retailers. American Capital earned $363,000 of long-term capital gains on this exit.
American Capital invested $3 million in senior subordinated notes with warrants issued by JAAGIR in June 2000, representing 4.1% of the ownership. This investment supported JAAGIR's diversification into e-commerce development. JAAGIR, through its two subsidiaries, The Adea Group, Inc. and edeagroup.com, is a national provider of information technology and e-commerce staffing and technical services serving Fortune 500 companies. American Capital earned $79,000 of long-term capital gains on this exit.
These transactions are American Capital's seventeenth and eighteenth exits since its August 1997 IPO, bringing the total to approximately $200 million on $1.5 billion of investments. American Capital has realized a compounded annual return of 17% on all of its exits since its IPO.
For a chart detailing all of American Capital's exits click here.
You Can't Restate a Dividend!
American Capital has declared a $.67 per share dividend to be paid on December 31, 2002 to record holders as of December 12, 2002. This dividend is an 18% increase over the fourth quarter 2001 regular dividend of $0.57 per share. American Capital has paid or declared $2.55 in dividends this year and $10.31 in dividends since its August 1997 IPO at $15.00 per share. American Capital's annual return to its shareholders from its IPO through December 11, 2002 is 15.9%, taking into account reinvestment of $9.64 of dividends paid during that period.
American Capital is a publicly traded buyout and mezzanine fund with capital resources approximatley $1.5 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.
