Bethesda, MD - December 22, 2003 - American Capital Strategies Ltd. (Nasdaq:ACAS)announced today it has invested $24.2 million in Bankruptcy Management Solutions (BMS), the leading provider of case management software, financial and other services to Chapter 7 bankruptcy trustees. American Capital's investment takes the form of senior term notes, senior and junior subordinated debt with warrants, and common equity. American Capital is also providing a revolving credit facility. Wachovia Securities is also investing in senior term notes. Lincolnshire Management Inc. is the equity sponsor, and is acquiring the business from J.P. Morgan Chase & Co. BMS management is also investing in the equity.
"We're pleased to be working with Lincolnshire Management again and supporting the acquisition of this market leader as it transitions to a stand-alone company," said American Capital COO Ira Wagner. "We particularly like the counter-cyclical aspects of this investment and the company's dominant market share. American Capital has invested approximately $850 million this year and approximately $250 million quarter to date, with this our 25th new portfolio investment of the year."
For more information about American Capital's portfolio click here.
"BMS is a recognized leader in a market with high barriers to entry, able to leverage entrenched relationships and maintain its number one position among Chapter 7 trustees," said American Capital Managing Director Jeri Harman. "Its seasoned management, strong, stable cash flow, diverse customer base and ability to capitalize on the rising rate of corporate and personal bankruptcies bode well for its future as an independent firm."
Chapter 7 is a provision of the federal Bankruptcy Code under which the debtor's assets are liquidated and the resulting cash proceeds used to pay creditors. It accounts for 70% of all bankruptcy filings in the United States. BMS provides Chapter 7 bankruptcy trustees with comprehensive systems, including computer hardware, software, help desk services, financial services and other services. BMS systems allow trustees to manage financial assets and meet fiduciary obligations as well as the extensive administrative requirements associated with the almost 100 different bankruptcy courts in the U.S., each of whom may have different, changing requirements. BMS is headquartered in Irvine, CA.
"In our experience, American Capital has proved itself a steady, flexible and reliable partner," said Lincolnshire Managing Director Allan Weinstein. "Their hard work and institutional capabilities mean that we know we can get the transaction done on time and on appropriate terms."
Click here for more information about BMS.
As of November 30, 2003, American Capital shareholders have enjoyed a total return of 231% since the Company's IPO - an annualized return of 21%, assuming reinvestment of dividends. American Capital has declared a total of $13.12 per share in dividends since its August 1997 IPO.
American Capital is a publicly traded buyout and mezzanine fund with capital resources in excess of $2.5 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 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.
