Bethesda, MD - December 23, 2002 - American Capital Strategies Ltd.
(Nasdaq:ACAS)announced today that it has exited its $25 million investment in The Middleby Corporation (Nasdaq: MIDD), earning $2.4 million in long-term capital gains, achieving a 37% compounded annual return. Middleby repaid its original note and $500,000 of PIK notes and also purchased American Capital's warrants. The exit realized 7% more than the most recent quarterly valuation of these assets.
This is American Capital's third exit this quarter, its eleventh exit this year and nineteenth exit since its August 1997 IPO, bringing total exits to approximately $220 million on $1.5 billion of investments. American Capital has realized a compounded annual return of 18% on all of its exits since its IPO.
For a chart detailing all of American Capital's exits click here.
"Our exit from Middleby is a great example of the wonderful investment opportunities available in the market today," said Chairman, President and CEO Malon Wilkus. "We invested in Middleby about one year ago, so our ability to realize a 37% cash on cash return this quickly during a difficult economic environment demonstrates the quality of the company and our investment. Middleby, like our two other exits this quarter, used their own internally generated funds and third party financing to repay our loans and redeem our warrants."
"In the aggregate, our nineteen exits realized $20.6 million, or 11% more than the most recent quarterly valuation, and only two were slightly less than their most recent quarterly valuation. At the end of the third quarter, we had over $270 million of equity interest in middle market companies, and as we climb out of this troubled economy we believe we will enjoy more frequent exits from this pool of assets," said John Erickson, Chief Financial Officer.
"We were very impressed with the quality of the management team -- Selim A. Bassoul, Middleby's President and CEO, is doing an excellent job," said American Capital Principal and Managing Director Gordon O'Brien. "We were pleased to have won the competition to help Middleby make an outstanding acquisition, and we hope to work with them again."
American Capital invested $25 million in senior and junior subordinated notes with warrants issued by Middleby in December 2001, representing 6% of the company's ownership. The investment funded, in part, Middleby's acquisition of G.S. Blodgett Corporation from Maytag Corporation (NYSE: MYG). Middleby has been a leading designer, manufacturer, marketer and distributor of cooking and warming equipment for over 100 years. Blodgett manufactured commercial cooking products under the Blodgett, Pitco Frialator, MagiKitch'n and Blodgett Combi brands. Middleby used financing from its new senior bank facility led by Bank of America (NYSE: BAC) to repay American Capital's debt and redeem warrants.
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. The Company has also declared an extra dividend of $0.02 per share to be paid on January 10, 2003 to record holders as of December 31, 2002. American Capital has declared a total of $10.33 in dividends since its August 1997 IPO at $15 per share.
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.
