Bethesda, MD - May 5, 2003 - American Capital Strategies Ltd. (Nasdaq:ACAS)announced today it has invested $7.5 million in its portfolio company, MBT International, Inc. ("MBT"), for the acquisition of Midwest Musical Instrument, Inc. ("Midco"). American Capital's investment takes the form of junior and senior subordinated debt with warrants. LaSalle Bank continues to provide a revolving credit facility to MBT. Following the transaction, Midco will become a wholly-owned subsidiary of MBT Holdings Corporation, and American Capital will own a majority of MBT Holdings Corporation.
"Our investment in MBT's strategic acquisition of Midco is an example of American Capital's ability to assist in the growth of its portfolio companies," said American Capital COO Ira Wagner. "In this transaction, American Capital is creating value by supporting MBT's expansion strategy in acquiring a complementary partner. This is our third new portfolio transaction of the second quarter, bringing total 2003 investments to $247 million."
American Capital has invested more than $700 million in the past twelve months.
For more information about American Capital's portfolio click here.
"Midco is a perfect fit with MBT, and we expect the combination to result in significant synergies in terms of cost savings and revenue growth," said American Capital Principal John Thornton. "Both companies have large, broadly diversified and complementary customer bases, thereby creating cross selling opportunities. We are confident in the future growth and success of the combined entity under the leadership of strong and talented CEO Dan Mahoney, who has extensive experience in acquisitions, successfully integrating company cultures, operations and practices."
American Capital first invested in MBT, headquartered in Charleston, SC, in July 1999. The company was founded in 1979 and is one of the largest national distributors of musical instruments and accessories. Founded in 1949, Midco, headquartered in Effingham, IL, is a major distributor of guitars, percussion products, electronic music equipment and a wide variety of music accessories. The combined companies will have over 150 employees. Customers include national, regional and local distributors such as The Guitar Center, The Musicland Group Inc., Hermes Trading Co. Inc., Sam Ash Music Corp., Brook Mays Music Co. and George's Music Group. Pictured at left are examples of Midco's proprietary guitars.
"Our ongoing relationship with American Capital has enabled MBT to add value, enhancing its strong position within the musical instrument and accessories distribution industry," said MBT CEO Dan Mahoney. "With this acquisition, we will have a significantly larger distribution infrastructure, allowing us to reach more customers with greater speed and efficiency, and providing them with improved service to meet their demands."
For more information about the combined companies click here.
American Capital paid $2.55 in regular dividends in 2002, a 15% increase over 2001, and including the bonus dividend declared in 2002, paid or declared a total of $2.57 in dividends in 2002. American Capital has paid or declared a total of $11.68 in dividends since its August 1997 IPO at $15 per share, including $.68 per share dividend declared for the second quarter of 2003.
American Capital is a publicly traded buyout and mezzanine fund with capital resources exceeding $1.7 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 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.
