FOR IMMEDIATE RELEASE:
January 25, 2007

Contact
Natasha Volyanskaya, Principal (415) 591-0120
Eric Heith, Vice President (415) 591-0120
Brian Maney, Director, Corporate Communications (301) 951-6122

AMERICAN CAPITAL INVESTS IN VISION SOLUTIONS AND ITERA MERGER

Bethesda, MD - January 25, 2007- American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that in the fourth quarter of 2006 it and an affiliate invested in support of Thoma Cressey Equity Partners’ acquisition and merger of Vision Solutions and iTera Inc., leading developers of high availability (HA) software.  HA software creates and maintains copies of all computer system elements, providing an efficient backup system in response to power outages, disasters and other unplanned as well as planned computer system downtimes, such as hardware and software upgrades.

“This is our first transaction with Thoma Cressey Equity Partners.  We are delighted to collaborate with one of the most experienced private equity firms in the United States with a focus on investing in software companies,” said American Capital Regional Managing Director Darin Winn.  “American Capital is investing in a company that can meet the business need for software that ensures that mission-critical applications and data remain continually available, even in times of unplanned events.”

American Capital invested directly and through its funds under management $6.7 billion in 2006 and $2.2 billion in the fourth quarter of 2006 and has invested $467 million in  2007 year to date.  Not including funds under management, American Capital invested $5.1 billion in 2006 and $1.7 billion in the fourth quarter of 2006 and has invested $430 million in 2007 year to date.  For more information about American Capital’s portfolio, click here.

“The merger of Vision Solutions and iTera creates the leading industry player with significant market share and a diversified global customer base of over 2,700 clients,” said Natasha Volyanskaya, American Capital Principal. “The combined company will serve a global customer base ranging from small companies to top-tier Fortune 500 companies across a diverse range of industries, including financial services, telecommunications, manufacturing, distribution, transportation and healthcare.”

“As companies strive to stay competitive, the demand increases for software that keeps systems running twenty-four hours a day, seven days a week, every day of the year.  Vision Solutions and iTera combined are in a strong position to meet this demand,” said Eric Heith, American Capital Vice President.

Recently merged with iTera, Vision Solutions is the leading provider of high availability, disaster recovery and data management solutions for the System i market.  As IBM Corporation’s largest high availability Premier Business Partner, Vision Solutions is a recognized System i solutions leader with more than 2,700 customers and 12,000 licenses worldwide.  The Company works closely with an international network of channel partners and IBM to deliver its industry-leading software, along with a powerful portfolio of services and support for protecting mission-critical applications and information from planned and unplanned downtime.  Privately held by Thoma Cressey Equity Partners, Vision Solutions has corporate offices in Irvine and Salt Lake City, with offices worldwide.

“American Capital shares our excitement and vision for the combined company’s future,” said Seth J. Boro, a Thoma Cressey Equity Partners Vice President.  “We are pleased with their ability to deliver their financing commitment within a quick transaction timeline.”

ABOUT AMERICAN CAPITAL

American Capital is the largest U.S. publicly traded alternative asset manager with $12 billion in capital resources under management.  American Capital, both directly and through its global asset management business, is an investor in management and employee buyouts, private equity buyouts, and early stage and mature private and public companies.  American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations.  American Capital invests from $5 million to $500 million in North America and €5 million to €400 million in Europe.

As of December 31, 2006, American Capital shareholders have enjoyed a total return of 617% since the Company's IPO - an annualized return of 23%, assuming reinvestment of dividends.  American Capital has paid a total of $1.4 billion in dividends and paid $22.44 in dividends per share since going public in August 1997 at $15 per share.

Companies interested in learning more about American Capital's flexible financing should contact Mark Opel, Senior Vice President, Business Development, at (800) 248-9340, or visit www.AmericanCapital.com or www.EuropeanCapital.com.

ABOUT THOMA CRESSEY PARTNERS

Thoma Cressey Equity Partners is a leading private equity investment firm that has been providing equity and strategic support to management teams building companies for more than 25 years.  In the software industry, Thoma Cressey has amassed a portfolio of software companies with combined earnings in excess of $300 million. Thoma Cressey's investment focus is on companies in the software, healthcare, business services and consumer products industries. Thoma Cressey currently manages approximately $2 billion of equity capital.

Performance data quoted above represents past performance of American Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in American Capital will likely fluctuate. Consequently, an investor's shares, when sold, may be worth more or less than their original cost. Additionally, American Capital's current performance may be lower or higher than the performance data quoted above.

This press release contains forward-looking statements. The statements regarding expected results of American Capital 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, national or international economic conditions, or changes in the conditions of the industries in which American Capital has made investments.

This announcement is neither an offer to sell nor a solicitation to buy securities.
This announcement appears as a matter of record only.