FOR IMMEDIATE RELEASE:
April 12, 2005

Contact
Kimberly Chu, Vice President (310) 806-6280
Brian Maney, Director, Corporate Communications (301) 951-6122

ECA SET FOR NEW OPPORTUNITIES - AND THE BEAT GOES ON

By Maureen Flanagan

Electro-Component Assembly Company (ECA) was established by Henry Garcia in 1979 as a specialized contract manufacturer serving a wide range of industries. In 1983, ECA was enlisted by Pacesetter Systems (now St. Jude Medical, Inc.) to design and produce a torque wrench for use during the surgical installation of pacemakers and defibrillators. These disposable wrenches proved critical for proper tightening of the screws that are used to secure delicate electrical leads connected to a pacemaker or defibrillator inside a patient.

Today, ECA is the primary supplier with a leading share of its global market. The company, headquartered in Newbury Park, CA, sells its products to the world's largest manufacturers of implantable cardiac devices, including Medtronic, Inc. (NYSE: MDT), Guidant Corp. (NYSE: GDT), and St. Jude Medical, Inc. (NYSE: STJ).

"ECA's high standard of quality, ability to quickly fulfill orders and outstanding engineering capabilities allow it to serve nearly all major manufacturers of implantable cardiac devices and enjoy a high degree of customer loyalty," said American Capital Vice President Kimberly Chu.

In an April 2005 transaction, ECA was acquired by American Capital Strategies, Ltd. (Nasdaq: ACAS). American Capital provided $50 million of financing consisting of a revolving line of credit, senior debt, subordinated debt, and common equity. The founders retained a seller note as part of the transaction.

The company's products are essential for the correct insertion leads that are attached to pacemakers and implantable cardioverter defibrillators (ICDs), both of which are used to correct defects in the rhythm of the heart. Defibrillators also have the capability to deliver a small electrical shock to the heart to convert abnormal rhythms back to normal.

Cardiologists consider ECA's torque wrench "mission critical." Before its development, pacemaker insertion procedures had a much lower success rate as screws were often over-tightened or damaged because wrenches could not limit the amount of torque a surgeon would apply. Appropriate attachment is critical for successfully programming the device and enabling the electrical contact that regulates the heart's rhythm.

The company's hexagon keys are used to remove the screws. Its solid wrenches are similar to hexagon keys, but are shaped like small screwdrivers and used in applications where space does not permit the rotation of the L-shaped hexagon key.

The company's products are delivered to manufacturers of implantable cardiac devices who in turn package the appropriate wrench or key with their device. ECA's careful project management ensures that wrenches and keys are built and delivered on time, within budget, and to the customer's specifications.

ECA joins American Capital's portfolio of more than 120 companies in a wide range of industries. Since 1997, American Capital has invested more than $5 billion in middle-market companies. For more information about American Capital's portfolio click here.

The outlook for ECA's products is strong. With annual sales of $8.2 billion, pacemakers and ICDs are 40% of the cardiac rhythm management industry and the largest segment of the medical device industry. Moreover, the global market for cardiac devices is anticipated to expand by 14%-16% a year through 2007, outpacing the overall medical device market.

Fueling the market's expansion will be innovative new products and demographic trends. The aging U.S. population ranks among the most important growth factors. In 2001, people 65 and older represented 40% of total healthcare expenditures and 84% of the people who died as a result of coronary artery disease. Moreover, some 64 million Americans have some form of coronary artery disease, and sudden cardiac death has been the leading cause of death since 1900 (except for one year).

The market for ICDs, which were introduced only five years ago, is showing exceptionally strong growth. In addition to their current use for treating patients with tachycardia, results of clinical studies are leading to increased applications such as patients with congestive heart failure and atrial fibrillation. ICD therapy is also moving toward preventive use, opening up even greater market opportunities. And, as the benefits and cost-effectiveness of preventive ICD therapy become evident, a significant increase in its use is expected.

As the sole supplier of torque wrenches, ECA is positioned to capitalize on these favorable industry dynamics. The company anticipates increased business from existing and new markets. Torque wrenches will be a necessity in the foreseeable future as all current and new implantable cardiac devices require screws to attach leads to the device. Moreover, given the one-time use and disposable features of ECA's products, the company enjoys consistent repeat business, with customers purchasing multiple times per year.

With its sole source market position, high product quality, customer loyalty and superior engineering capabilities, ECA is well positioned to take new opportunities to heart.