FOR IMMEDIATE RELEASE:
June 20, 2007

Contact
Tom McHale, Senior Vice President, Finance (301) 951-6122
Brian Maney, Director, Corporate Communications (301) 951-6122

AMERICAN CAPITAL PROVIDES DETAILS OF $10 MILLION OF TOTAL NET PORTFOLIO REALIZED GAINS IN FIRST QUARTER 2007

Bethesda, MD – June 20, 2007 – American Capital Strategies Ltd. (Nasdaq:ACAS) announced today the details of its $10 million of total net realized gains from the disposition of portfolio investments in the first quarter of 2007.  During the first quarter of 2007, American Capital received $570 million of proceeds from the realization of portfolio investments.

Consolidated Utility Services Inc.
In the first quarter of 2007, American Capital realized a gain of $7 million from the sale of its portfolio company Consolidated Utility Services Inc. to Tricor Pacific Capital Inc.  Consolidated Utility Services is a provider of outsourced underground utility locating, marking and related services for telephone, power, cable, gas, water and sewer utility companies, subsurface utility engineering services and one call services.  American Capital recognized total proceeds of $17 million upon the exit, earning a 47% compounded annual rate of return on its total investment, including interest, dividends and fees earned over the life of American Capital’s investment.  American Capital’s compounded annual rate of return was 84% on its equity investment and 19% on its debt investment in Consolidated Utility Services. The proceeds received by American Capital were greater than the fourth quarter 2006 valuation of the investment by $0.4 million, or 2%.

In November 2004, American Capital invested $5 million in senior subordinated debt and equity in Consolidated Utility Services to support its acquisition of ProMark Utility Locators Inc.  In January 2005, American Capital made a subsequent $5 million investment in senior subordinated debt and equity in Consolidated Utility Services to support its acquisition of Great Plains Locating Service Inc.  River Associates Investments LLC was the co-equity sponsor in both investments.

“We are very pleased with the success of our investment in Consolidated Utility Services. We and our partners at River Associates Investments, along with what we believe to be the strongest management team in the industry, created the company in late 2004 through the acquisition and subsequent integration of two of the most respected midsize firms in the industry,” said Kevin Kuykendall, Managing Director, American Capital Energy Group.  “Our financial support, industry expertise, and historical relationship with the management team of Consolidated Utility Services combined to assist us in achieving this attractive return on our investment.”

For more information about the Consolidated Utility Services transactions, click here.  

HP Evenflo Acquisition Co.
In the first quarter of 2007, American Capital realized a gain through an affiliate of $2 million, net of tax, from the exit of its portfolio company HP Evenflo Acquistion Co. ("Evenflo"). Evenflo is a leading manufacturer and supplier of juvenile products for children ranging from infants to preschoolers.  American Capital recognized total proceeds of $22 million upon the exit, earning an 16% compounded annual rate of return on its total investment, including interest, dividends and fees earned over the life of American Capital’s investment.  The proceeds received by American Capital were less than the fourth quarter 2006 valuation of the investment by $0.6 million, or 3%.

In August 2004, American Capital invested $25.5 million in second lien and equity financing to support Harvest Partners LLC’s acquisition of Evenflo.  American Capital served as administrative agent of the $55 million second lien facility.

“We are delighted that we had the opportunity to support Harvest Partners and invest in Evenflo, whose portfolio of well-known juvenile products make it one of the most recognized brand names in the United States and internationally,”  said Brian Graff, American Capital Regional Managing Director.  “This was a successful investment for American Capital, Harvest Partners and Evenflo.”

For more information about the Evenflo transaction, click here.

Beacon Hospice Inc.
In the first quarter of 2007, American Capital received full repayment of its $10 million subordinated debt investment in Beacon Hospice, Inc.  Beacon is leading provider of hospice services in New England. 

In February 2005, American Capital invested $34 million in the revolving credit facility, senior term loan A, senior term loan B and senior subordinated debt of Beacon, supporting Halpern Denny & Co.’s acquisition.  Subsequent to the initial financing, American Capital syndicated the $10 million senior term A loan.  In the first quarter of 2006, American Capital received proceeds of $11 million for its full repayment of its senior term B and outstanding revolving credit facility investments in Beacon.  American Capital earned an 18% compounded annual rate of return, including interest and fees earned over the life of American Capital’s investment in Beacon. 

“American Capital’s investment in Beacon has been an excellent opportunity to invest with Halpern Denny, a new private equity relationship for American Capital, and support a leading hospice provider in the New England region," said Jon Isaacson, American Capital Managing Director.

For more information about the Beacon transaction, click here.

EuroCaribe Packing Company
In the first quarter of 2007, American Capital realized an additional loss of $4 million from the sale of its portfolio company EuroCaribe Packing Company to Matasantos Commercial Corp.  EuroCaribe is a producer of processed pork products in Puerto Rico.  American Capital recognized total proceeds of $11 million upon the sale, earning a 3% compounded annual rate of return on its investment, including interest and fees earned over the life of American Capital’s investment.  American Capital’s inception to date realized loss on its investment in EuroCaribe totaled $11 million.  The proceeds received by American Capital were less than the fourth quarter 2006 valuation of the investment by $0.3 million, or 2%.

In November 1998, American Capital invested $18 million in a revolving credit facility, senior debt and subordinated debt with warrants to support EuroCaribe’s acquisition of Federal Packing Company Inc. 

For more information about the EuroCaribe transaction, click here.

Exited Portfolio Company
In the first quarter of 2007, American Capital realized an additional loss of $3 million from the sale of a portfolio company.  As part of the sale in the first quarter of 2007, American Capital received $19 million of proceeds for the partial repayment of its outstanding senior and subordinated debt investments in the portfolio company and could receive up to $4 million of additional sale proceeds held in escrow.  Prior to the transaction, American Capital and the other equity owners of the portfolio company transferred their equity ownership interests in the portfolio company to a holding company.  As a result of the transaction, American Capital wrote off its common equity investment, realizing the $3 million loss.  As of March 31, 2007, American Capital continues to own preferred stock and subordinated debt investments in the holding company with a cost basis of $12 million.

Other Company Exits and Repayments
American Capital also recognized a net realized gain of $8 million from the realization of various other portfolio investments during the first quarter of 2007.

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From its IPO through the first quarter of 2007, American Capital has earned an 16% compounded annual return on 186 exits and repayments of senior debt, subordinated debt and equity investments, totaling $5.3 billion of invested capital, including interest, dividends, fees and net gains on these investments.  These exits and prepayments represent 36% of all amounts invested by American Capital since its August 1997 IPO. 

For a chart showing American Capital’s exited portfolio companies, click here.

ABOUT AMERICAN CAPITAL

American Capital is the second largest U.S. publicly traded alternative asset manager with $12 billion in assets under management (second to Fortress (NYSE: FIG)).  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 and its affiliates invest from $5 million to $800 million per company in North America and €5 million to €500 million per company in Europe.

As of May 31, 2007, American Capital shareholders have enjoyed a total return of 656% since the Company's IPO - an annualized return of 23%, assuming reinvestment of dividends.  American Capital has paid a total of $1.6 billion in dividends and paid and declared $24.24 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.

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.