Bethesda, MD - April 16, 2004 - American Capital Strategies Ltd. (Nasdaq:ACAS)announced today its views on new Business Development Companies (BDCs).
"This is an appropriate time to welcome the new BDCs that have recently gone public and those that may follow. They will accelerate the growing investor interest in BDCs," said Malon Wilkus, American Capital Chairman, President and CEO. "We have long thought it inevitable that private equity and mezzanine partnerships would ultimately adopt the BDC structure. Compared to typical private equity and mezzanine partnerships, BDCs can retain their capital, enjoy greater access and lower cost of capital and offer investors greater transparency, control and liquidity. BDCs can also offer debt and equity and longer term capital to companies. In addition, internally managed BDCs, like American Capital, are free of the many conflicts that exist between the general and limited partners of these partnerships. We expect many of the new BDCs to provide capital to larger companies outside the market targeted by American Capital and therefore not be our direct competitors. More importantly, we also expect that the recent creation of new BDCs will accelerate the process of displacing many of the hundreds of traditional private equity and mezzanine partnerships that will no longer have access to capital. Overall, we believe this is a positive development for American Capital."
"In 2003, mezzanine and equity partnerships raised approximately $24 billion of capital, one of the lowest levels in years. The capital raised by BDCs should serve over time to replace, not augment, these levels," said American Capital COO Ira Wagner. "With our most recent announced investment, our 92 portfolio companies now have combined revenues of over $7 billion and about $1 billion of EBITDA. We continue to have a robust pipeline of financing opportunities, which has grown 103% over the past 12 months to over $6 billion."
American Capital Invests $15.6 Million in Premier Provider of Electronic Processing Services
American Capital is also announcing it has invested $15.6 million in TransFirst Holdings Inc. ("TransFirst"), a leading provider of transaction processing services and payment technologies. American Capital's investment takes the form of senior subordinated debt and supports TransFirst's acquisition of the third party and agent bank merchant division of Fifth Third Bank (Nasdaq: FITB) Processing Solutions. Merrill Lynch Capital provided a revolving credit facility and senior term loans; GTCR and management provided senior subordinated debt, while GTCR provided equity financing and is the majority owner.
American Capital has invested approximately $1.1 billion in the last twelve months and over $150 million year to date.
For more information about American Capital's portfolio click here.
"We are pleased to be working again with GTCR, a strong equity sponsor, supporting the expansion of TransFirst, a premier provider of electronic transaction processing services," said American Capital COO Ira Wagner. "We believe that GTCR's familiarity with the payment processing sector and its developed expertise with growing processing-related companies will enable it to assist in maximizing TransFirst's value. This investment illustrates American Capital's ability to build on relationships with many of our private equity partners and assist in their new portfolio investments."
Founded in 1995, Dallas-based TransFirst is a provider of a complete line of merchant credit and debit transaction processing services, including transaction authorization, transaction data capture and transmission, merchant reporting, merchant acceptance, transaction settlement and clearing, real-time transaction monitoring and transaction charge-back solutions. TransFirst's customer base is made up of more than 760 banks and approximately 150,000 merchants throughout the U.S. It includes customers involved in the health care industry, agent banking, card-not-present services (including merchants involved in mail, telephone and internet sales) and independent sales organizations. In addition to its headquarters, TransFirst also has operating facilities in Colorado, Nebraska, Kansas, Wisconsin and California and employs nearly 350. Since 2000, revenue has grown at a CAGR of approximately 50%.
"TransFirst is an extremely attractive investment opportunity: The company shows impressive historical financial performance, employing a compelling business model focused on merchants and agents in high growth, service-intensive markets. TransFirst enjoys distinct competitive advantages -- excellent customer service, a broad service offering allowing for client customization, private labeling of its TransLink reporting system and fully automated risk assessment of transactions and merchants," said American Capital Managing Director Tom Gregory. "TransFirst's strategic acquisition will increase the company's customer base, specifically broadening its focus on the higher margin Independent Service Organization segment, and will also result in significant cost reductions through the company's robust shared services platform. With its strong and deep management team, TransFirst is in an excellent position to capitalize on favorable industry dynamics as credit and debit card purchasing volumes continue to increase, driven by the widespread adoption of card-based payment."
For more information about TransFirst's broad offering of top quality electronic transaction processing services click here.
"Having worked with American Capital on a previous investment, we were familiar with their exceptional investment abilities and professional staff and were confident that they would be capable of providing the necessary support to complete this transaction," said GTCR Principal Barry Dunn. "TransFirst is well-positioned to expand its reach within the electronic transaction processing market and further solidify its leadership position in its niche."
As of March 31, 2003, American Capital shareholders have enjoyed a total return of 296% since the Company's IPO -- an annualized return of 23%, assuming reinvestment of dividends. American Capital has declared a total of $13.82 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 $2.7 billion. American Capital is an investor in and sponsor of 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.
Founded in 1980, GTCR Golder Rauner LLC is a leading private equity investment firm and long-term strategic partner for outstanding management teams. The Chicago-based firm pioneered the investment strategy of identifying and partnering with exceptional executives to build leading companies through a combination of acquisitions and strong internal growth. GTCR currently manages more than $6 billion of equity capital invested in a wide range of companies and industries. Portfolio companies include Transaction Network Services, Inc., a leading provider of data communications services to the credit card and ATM transaction processing industry; Cardinal Logistics Management, Inc., a provider of knowledge-based, integrated logistics solutions; Alliant Resources Group, a leading U.S. distributor of insurance and financial services; and VeriFone, Inc., the leading provider of secure electronic payment solutions for financial institutions, merchants and consumers.
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.
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This announcement is neither an offer to sell nor a solicitation to buy securities.
This announcement appears as a matter of record only.
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