FOR IMMEDIATE RELEASE:
January 3, 2008

Contact
Todd Wilson, Principal, Buyout Group (212) 213-2009
Robert Klein, Managing Director, Buyout Group (212) 213-2009
Chris Carey, Principal, Sponsor Finance Group (212) 213-2009
Brian Maney, Director, Corporate Communications (301) 951-6122

AMERICAN CAPITAL ACHIEVES A TOTAL GAIN OF $77 MILLION FROM ITS INVESTMENT IN RANPAK
Provides $410 Million to Support Odyssey Investment Partners’ Acquisition

Bethesda, MD – January 3, 2008 – American Capital Strategies Ltd. (Nasdaq: ACAS) announced today that it has realized a gain of $45 million from the sale of its portfolio company Ranpak Inc. to Odyssey Investment Partners LLC in the fourth quarter of 2007.  American Capital’s inception to date total realized gain on its investment in Ranpak is $77 million.  Including the investments in Ranpak of American Capital’s affiliated funds under management, the gain totals $104 million over the life of the investment.

Ranpak is a leading manufacturer and marketer of “in-the-box” paper-based protective packaging in North America, Europe and the Pacific Rim.  In support of Odyssey Investment Partners’ acquisition of Ranpak, American Capital invested $410 million in the form of first and second lien loans and is also providing a revolving credit facility.  Odyssey Investment Partners and Ranpak management invested in the Ranpak equity.

American Capital acquired control of Ranpak in December 2005, investing $284 million in subordinated debt and equity.  American Capital has realized total gains on its investment in Ranpak of $77 million, earning a 31% compounded annual rate of return on its senior debt, subordinated debt and equity investments, including interest, dividends and fees earned over the life of its investment.  On its equity only investments, American Capital earned a 40% compounded annual rate of return, including dividends and fees earned over the life of its investment.  For more information about American Capital’s original investment in Ranpak, click here.

“We are delighted with the result of our equity exit from Ranpak and even happier to be supporting its new partner, Odyssey Investment Partners, with senior debt financing,” said Brian Graff, American Capital Regional Managing Director. “Ranpak, led by an outstanding management team, has grown rapidly since we invested in the buyout two years ago and has proven to be an excellent investment.  Our willingness to provide senior debt financing exemplifies our continued long term commitment to the company.”

“Ranpak is a proven innovator in the protective packaging industry with a history of successful product innovations,” said Robert Klein, American Capital Managing Director, Buyout Group.  “By offering top packaging systems, which are high quality, cost-effective and cost-competitive, Ranpak has established a large and strong global customer base.”

“This is the fourth American Capital sponsored portfolio company sold since the beginning of the credit crunch in early July,” said John Erickson, American Capital Chief Financial Officer.  “Unlike the difficulties that are now apparent in completing billion dollar plus buyout transactions, American Capital continues to experience attractive purchase and exit opportunities in the middle market.  American Capital continues to achieve substantial liquidity in its portfolio, producing net realized gains.  In fact, American Capital achieved approximately $4 billion of liquidity since the start of the credit crunch.”

American Capital invested directly and through its funds under management approximately $11 billion in 2007, approximately $4 billion from June 30, 2007 to December 31, 2007, and over $2 billion in the fourth quarter of 2007.  Not including funds under management, American Capital invested approximately $8 billion in 2007, over $3 billion from June 30, 2007 to December 31, 2007 (representing approximately 31% of its June 30, 2007 investments outstanding at fair value) and approximately $2 billion in the fourth quarter of 2007.  Not including funds under management, American Capital received approximately $5 billion in total amortizations, prepayments and exits in 2007.  American Capital assisted in the refinance or syndication of approximately $2 billion of senior debt for its portfolio companies in 2007 and approximately $1 billion from June 30, 2007 to December 31, 2007.  For more information about American Capital’s portfolio, click here.

“Since our investment in Ranpak, the company has seen steady demand for its products due to robust growth in e-commerce both in North America and Europe as well as the company’s expansion across diverse end markets,” said Todd Wilson, American Capital Principal, Buyout Group.  “Additionally, Ranpak’s growth has been supported by end-users’ environmental concerns, which drive them to opt for Ranpak’s paper-based alternative to competitors’ resin-based products.”

“Ranpak’s extensive network of independent distributors, whose efforts are augmented by the company’s in-house sales team, serves a highly diverse and growing customer base,” said Chris Carey, American Capital Principal, Sponsor Finance Group. 

Ranpak, founded in 1972, manufactures two principal types of paper converter machines—cushioning machines and void-fill machines—that are marketed through distributors to end-users who buy paper from Ranpak.  The company’s end-users include fulfillment and distribution centers and OEMs.  Ranpak is headquartered in Concord Township, OH and has facilities in Reno, NV, Heerlen, The Netherlands and Kansas City, KS.  Ranpak has more than 300 employees worldwide.

“We are pleased to work with the knowledgeable and committed team at American Capital for the first time,” said Brian Kwait, a Managing Director of Odyssey Investment Partners.  “As majority owner for the past two years, American Capital brings significant insight to the business and we welcome its continuing investment in the company as we work together to further build its value.”

ABOUT AMERICAN CAPITAL

American Capital is the only alternative asset management company in the S&P 500. With $20 billion in capital resources under management¹, American Capital is the largest U.S. publicly traded private equity fund and one of the largest publicly traded alternative asset managers.  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 euro 5 million to euro 500 million per company in Europe.

As of December 31, 2007, American Capital shareholders have enjoyed a total return of 452% since the Company's IPO, an annualized return of 18%, assuming reinvestment of dividends.  American Capital has paid a total of $1.9 billion in dividends and paid or declared $26.16 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 ODYSSEY INVESTMENT PARTNERS

Odyssey Investment Partners LLC, based in New York, is a leading middle-market private equity fund with more than $1.2 billion under management. Odyssey makes majority, control investments primarily in established middle-market companies in a variety of industries, including industrial manufacturing, business, financial and healthcare services, aerospace products, and localized and route-based service businesses.

¹Capital resources under management is an estimate of internally and externally managed assets and available capital resources as of November 30, 2007 and does not include any fair value adjustments subsequent to September 30, 2007.

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.