 |
 |
|
Over $1.5 billion invested, $272 million dividends paid since 1997 IPO
|
|
|
Vol. 4 No. 1
|
(800) 248-9340
|
January 2003
|
|
|
|
|
TOTAL 2002 NEW INVESTMENTS $573 MILLION, UP 47% OVER 2001
$89 MILLION RAISED IN JANUARY 2003 EQUITY OFFERING
$435 MILLION RAISED IN DEBT AND EQUITY IN 2002
CAPITAL RESOURCES OVER $1.5 BILLION
|
|
Table of Contents
|
Total 2002 New Investments $573 Million, Up 47% Over 2001
$89 Million Raised in January 2003 Equity Offering; $435 Million Raised in Debt and Equity in 2002; Capital Resources Over $1.5 Billion
You Cant Restate a Dividend! $2.57 in Dividends Paid or Declared in 2002, $10.33 Since IPO
Fourth Quarter 2002 New Portfolio Investments
$27 Million in Thermal Printing Leader
$15 Million in Defense Contractor
$5 Million in Leading Heavy-Duty Truck and Automotive Parts Supplier
$12.5 Million in Leading Specialty Coatings and Adhesives Manufacturer
$36 Million in Dominant Automotive Water Pump Manufacturer
Click here to see a list of American Capitals investment partners.
Portfolio Companies
$37 Million to Finance the Merger of Dixie Trucking Company Inc.
and Service Transport Inc.
$18 Million to Finance the Acquisition of Coleman Natural Products
and B3R Country Meats by Petaluma Holdings
$14 Million and $11 Million to Recapitalize Senior Debt at Two Portfolio Companies
Exit Events
18% Compounded Annual Return on $250 Million of Exits Since 1997 IPO;
Q1 2003 Exit Earns 21% Return; Three Q4 2002 Exits Earn 19%, 19% and 37%
Corporate News
New Principal in Washington, DC
New Human Resources Head
|
|
Total 2002 New Investments $573 Million, Up 47% Over 2001
|
American Capital New Investments, 1998-2002
($Millions)
Total Since August 1997 IPO: Approximately $1.5 Billion
Back to top
|
|
$89 Million Raised in January 2003 Equity Offering; $435 Million Raised in Debt and Equity in 2002; Capital Resources Over $1.5 Billion
|
American Capitals two equity offerings in 2002 raised approximately $130 million. The July offering was underwritten by Salomon Smith Barney and Wachovia Securities and raised approximately $76.9 million. In November, we raised approximately $53.1 million in an offering underwritten by Wachovia Securities.
In January, the Company raised approximately $89 million. Managing underwriters for the offering were A.G. Edwards & Sons, Inc., BB&T Capital Markets, a division of Scott & Stringfellow, Inc., Legg Mason Wood Walker, Incorporated, and U.S. Bancorp Piper Jaffray Inc.
The net proceeds of these offerings are applied to reduce the borrowings under American Capitals existing revolving credit facility. This creates availability under this facility, which is generally available for funding future American Capital investments.
For more information about our most recent offering click here.
In 2002, American Capital also issued $305 million of investment grade securities in the Companys second and third term securitizations. The Companys first term securitization, an investment grade issuance of $153.9 million, was in December 2000. None of the securitizations have experienced a charge-off or ratings downgrade and all are booked as debt on American Capitals balance sheet.
For more information on American Capitals term securitizations click here.
Back to top
|
You Cant Restate a Dividend!
$2.57 in Dividends Paid or Declared in 2002, $10.33 Since 1997 IPO
|
American Capital paid or declared $2.57 in dividends in 2002, and has paid or declared $10.33 in dividends since our August 1997 IPO. In addition, $10,000 invested in American Capital in August 1997 would have grown to $22,571 on December 31, 2002, a 17% annualized return, including dividend reinvestment.
For more information about American Capitals dividends click here.
Back to top
|
|
$27 Million in Thermal Printing Leader
|
 In December, American Capital invested $27 million in Futurelogic Inc., a leading thermal printing developer, manufacturer and assembler with dominant market share in the gaming industry and serving various other markets. American Capitals investment took the form of a revolving credit facility, senior term loan, senior subordinated debt with warrants, junior subordinated debt and common equity. ClearLight Partners is the equity sponsor. Futurelogic founding management retained significant equity ownership.
Founded in 1983, Glendale, CA based Futurelogic is the dominant supplier for thermal printers found in cashless slot machines. Recent revenue growth has been strong, more than tripling over the last three years. The Companys products are also found in medical devices, to print receipts from drug dispensers; in gasoline pumps, to print credit card receipts; and in developing markets, including vending machines that dispense receipts and promotional coupons, and in produce labeling printers, enabling efficient category management that tracks produce from growers to consumers.
Click here for more information about Futurelogic.
Contact Jeri J. Harman, Principal and Managing Director, or call (818) 676-1222.
Back to top
|
|
$15 Million in Defense Contractor
|
 In November, we invested $15 million in MATCOM International Corporation, a defense contractor and provider of IT and engineering services to various military and civilian agencies of the Federal Government, including the newly formed Department of Homeland Security. Proceeds from American Capitals investment were used to support a strategic add-on acquisition and to refinance a portion of MATCOMs existing debt. American Capital provided senior secured and senior secured subordinated financing, while Citizens Bank, N.A. remained as MATCOMs revolving credit facility provider. The shareholders of MATCOM include DFW Capital Partners, Westbury Equity Partners, and the management of MATCOM. Former shareholders of the acquired company retained an equity interest in the combined company.
Founded in 1983 in Alexandria, VA, MATCOM has experienced steady growth in recent years. Currently operating with over $70 million in annual revenues, 31 offices, and over 600 employees, MATCOMs attention to its strategic plan has enabled it to establish strong and growing relationships with numerous Government agencies, including all the military services, the Department of Agriculture, Federal Retirement Thrift Investment Board, National Institute of Standards and Technology and the US Customs Service.
Click here for more information about MATCOM.
Contact Darin Winn, Principal and Managing Director, or call (214) 273-6630.
Back to top
|
|
$5 Million in Leading Heavy-Duty Truck and Automotive Parts Supplier
|
 In November, we invested $5 million in Phillips & Temro Holdings LLC and its wholly owned subsidiaries, a leading manufacturer of highly engineered cold weather starting and comfort products for the automotive and heavy-duty truck OEM market and aftermarket. American Capitals investment took the form of a senior secured subordinated note and supported the acquisition of Phillips & Temro from the Budd Company by TMB Industries, a private equity firm based in Chicago with a strong track record of investing in middle market industrial companies. LaSalle Bank N.A. provided senior term loans and a revolving credit facility. Chilmark Partners jointly funded the equity.
Phillips & Temro has secured its position as the leading North American supplier and second largest global supplier of cold weather starting and comfort products to the automotive and heavy duty truck OEM market and aftermarket. The companys four manufacturing facilities in Minnesota and Manitoba, Canada have enabled Phillips & Temro to serve notable long-time, top automotive and heavy duty truck customers such as the Ford Motor Company, Cummins Engine Company, General Motors, Daimler-Chrysler, Volvo and John Deere.
Click here for more information about Phillips & Temro.
Contact Tom Gregory, Managing Director, or call (312) 681-7400.
Back to top
|
|
$12.5 Million in Leading Specialty Coatings and Adhesives Manufacturer
|
 In November, we invested $12.5 million in Northwest Coatings Corp., a leading developer and manufacturer of customized specialty energy-curable (UV/EB, ultraviolet and electron beam) and water-based coatings and adhesives servicing the tag and label, packaging, printing and other industries. American Capitals investment took the form of senior subordinated debt and common and preferred equity. The investment supported the acquisition of Northwest Coatings by Caltius Capital Management from a group of private investors. Antares Capital Corporation provided the senior financing and invested in the common and preferred equity. Northwest Coatings management also invested in the equity.
Northwest Coatings was founded in 1970 to manufacture customized water-based adhesives and coatings for regional industrial customers. The company now manufactures a wide range of primarily energy-curable adhesives and coatings for customers worldwide. Northwest Coatings has experienced exceptional success in the tag and label market, where it has secured the position of market leader with its energy-curable adhesives and coatings. The companys product customization, new product development and excellent service have won it the 2001 Frost & Sullivan Customer Service Leadership Award.
Click here for more information about Northwest Coatings.
Contact Jeri J. Harman, Principal and Managing Director, or call (818) 676-1222.
Back to top
|
|
$36 Million in Dominant Automotive Water Pump Manufacturer
|
 In October, we invested $36 million in the recapitalization of ASC Industries Incorporated. ASC is a manufacturer of water pumps for automotive and light truck vehicles for the replacement market. American Capitals investment took the form of a senior term loan, senior and junior subordinated debt and preferred equity. GMAC Business Credit provided a revolving credit facility and a senior term loan. Existing ASC management retained a majority equity investment.
Founded in 1976, ASCs world headquarters and main assembly and distribution facility is located in a new 130,000 square foot, state-of-the-art facility in North Canton, Ohio. ASC also operates foundry, machining and sourcing operations in China, through ASC Tianjin and ASC Liancheng, a majority-owned joint venture with a local partner. Now with over 800 employees, ASC has seen strong sales growth over the past two years. Customers include most of the leading retailers in the automotive aftermarket and a select number of distributors focused on independent mechanics
Click here for more information about ASC Industries.
Contact Robert Klein, Principal, or call (212) 213-2009.
Back to top
|
|
AMERICAN CAPITAL INVESTMENT PARTNERS
|
For more information about American Capitals investments click here.
| Senior |
Mezzanine |
Equity |
| AmSouth Capital Corporation |
Albion Alliance |
Antares Capital |
| Antares Capital |
Churchill ESOP Partners |
Bain Capital |
| Bank of America |
Citizens |
Blue Capital Management, LLC |
| Deutsche Bank |
IBJ Whitehall |
Brentwood Associates |
| JP Morgan Chase |
John Hancock |
Caltius Capital Management |
| Comerica Bank |
Reliastar |
Cambridge Capital Partners |
| CS First Boston |
Stratford Capital Partners |
Celerity Partners, LP |
| Fleet |
TIAA-CREF |
Charles River Capital Partners |
| GE Capital |
|
ClearLight Partners |
| Gladstone Capital |
|
Demuth, Folger & Wetherill |
| GMAC Business Credit |
|
DFW Equity Partners |
| Harris Bank |
|
Dimeling, Schriber &Park |
| ING |
|
Forest, Binkely, Brown |
| Key Bank |
|
George K. Baum Capital Partners |
| LaSalle Bank |
|
Growth Capital Partners |
| PNC Bank |
|
Keystone Holdings, Inc. |
| Provident Bank |
|
KRG Capital Partners |
| Union Bank of California |
|
Lincolnshire Management, Inc. |
| Wachovia/First Union |
|
Mellon Ventures |
| |
|
Monterey Capital Partners |
| |
|
Morgenthaler Buyout Group |
| |
|
RFE Investment |
| |
|
Sentinel Capital Partners, LLC |
| |
|
Sterling Ventures |
| |
|
Stratford Capital Partners |
| |
|
Westbury Equity Partners |
Back to top
|
|
$37 Million to Finance the Merger of Dixie Trucking Company Inc. and Service Transport Inc.
|
 In December, we invested $37 million to fund the combination of our portfolio company Dixie Trucking Company Inc. with Service Transport Inc. American Capitals investment took the form of a senior secured bridge, senior secured subordinated notes and preferred equity. American Capital's senior bridge facility is anticipated to be repaid from a third party lender shortly. Dixie Trucking management retained an equity interest in the combined company.
American Capital first invested in Dixie Trucking in August 1999 to support a management buyout. Service Transport was founded in 1979 and has grown to become one of the fifty largest regional LTL carriers in the U.S. The combined companies, to be based in Cookeville, TN, will have over 900 employees and serve thousands of customers representing a broad array of industries
Click here for more information about Service and Dixie Trucking.
Contact Jeff MacDowell, Principal, or call (214) 273-6630.
Back to top
|
|
$18 Million to Finance the Acquisition of Coleman Natural Products and B3R Country Meats by Petaluma Holdings
|
 In October, we invested $18 million in support of the acquisition of Coleman Natural Products and B3R Country Meats by Petaluma Holdings, an existing American Capital portfolio company and the parent company of Petaluma Poultry. American Capitals investment took the form of senior notes and senior subordinated debt, with Booth Creek Management Corp. providing equity for the deal.
American Capital first invested in Petaluma, based in Sonoma County, Calif., in January of 2002. The company was founded in 1969, and has seen sales grow consistent with the growth of the overall natural and organic food markets. Petaluma was the first company to sell chicken with the U.S. Department of Agriculture certification for organic poultry. Coleman Natural Products was formed in Colorado in 1979 to market natural beef. In 1980, Coleman became the first USDA certified natural beef processor. B3R Country Meats was founded in 1986 in Texas as a natural beef processor
Click here for more information about Petaluma Holdings.
Contact John Thornton, Principal, or call (415) 591-0120.
Back to top
|
|
$14 Million and $11 Million to Recapitalize Senior Debt at Two Portfolio Companies
|
In December American Capital recapitalized the senior debt of two portfolio companies, Auxi Health, Inc. and Confluence Holdings Corp., investing $14 million and $11 million, respectively. At both companies, American Capital expects to be replaced, in whole or in part, by third party lenders shortly.
The refinancing enhances the cash position of Auxi, enabling management to focus on optimizing performance throughout the Company. American Capital originally invested in Auxi, a home health care provider in the South and Midwest, in 1999.
The Confluence refinancing helps to fund short-term working capital needs. Confluence is the holding company for Wilderness Systems, Inc. and Mad River Canoe Co., the 3rd largest kayak and 2nd largest canoe manufacturer in the US. American Capital financed the combination of these two companies in September 1998.
Back to top
|
18% Compounded Annual Return on $250 Million of Exits Since 1997 IPO;
Q1 2003 Exit Earns 21% Return; Three Q4 2002 Exits Earn 19%, 19% and 37%
|
Since our IPO, American Capital has realized a compounded annual return of 18% on senior debt, subordinated debt and equity in all of our exited investments, including fees. We exited 11 investments in 2002, and have exited 20 investments IPO to date.
Click here for a chart detailing all of American Capital's exits.
This month, we exited our investment in senior secured debt issued by Numatics Inc., earning a 21% compounded annual return. The exit was at the most recent quarterly valuation of these assets. In November 2001, American Capital invested $31 million in the senior debt of Numatics Inc., a leading manufacturer of pneumatic valves, air filters, regulators, lubricators and motion control products. Numatics used the proceeds of the loan to repay senior bank facilities.
For more information about the Numatics exit click here.
In the fourth quarter, we exited our investment in Crosman Corporation, earning a 19% compounded annual return, JAAGIR LLC, earning a 19% compounded annual return, and The Middleby Corporation, earning a 37% compounded annual return.
Crosman is the worlds leading manufacturer of airguns and accessories serving large retailers, sporting goods retail chains and catalog retailers. American Capital invested $4 million in senior subordinated notes with warrants issued by Crosman in October 1999, representing 3.5% of the ownership. American Capital earned $363,000 of long-term capital gains on this exit.
JAAGIR, through its subsidiary, Adeasolutions, is a national provider of information technology and consulting services serving primarily the Fortune 500 companies. In June 2000, American Capital invested $3 million in senior subordinated notes with warrants issued by JAAGIR, representing 4.1% of the ownership. American Capital earned $79,000 of long-term capital gains on this exit.
For more information about the Crosman and JAAGIR exits click here.
The Middleby Corporation has been a leading designer, manufacturer, marketer and distributor of cooking and warming equipment for over 100 years. American Capital invested $25 million in senior and junior subordinated notes with warrants issued by Middleby in December 2001, representing 6% of the companys ownership. American Capital earned $2.4 million in long-term capital gains on this exit.
For more information about the Middelby exit click here.
Back to top
|
|
New Principal in Washington, DC
|
Jon Isaacson has joined American Capital as a Principal in the Washington, DC office. Prior to joining American Capital, he was a Managing Director at Thayer Capital Partners, a Washington, DC-based private equity firm, where he focused on outsourced business services investments. Before that, he was with GTCR Golder Rauner LLC, a Chicago-based private equity firm. He previously worked at Morgan Stanley & Co. and McKinsey & Co., where he was a Financial Analyst and Management Consultant, respectively. Jon has extensive experience and expertise in investing in information technology services, installed base software, distribution and logistics, transaction processing, education and training and marketing services companies. He also serves as the Founder and Co-Head of the Late Stage Capital Committee for the Northern Virginia Technology Council (NVTC).
Email Jon or call him at (301) 951-6122.
Back to top
|
|
New Human Resources Head
|
Lionel Ferguson joins American Capital as Senior Vice President, Human Resources, a new position at the company. Lionel comes to ACAS from Lehman Brothers, where he ran Human Resources in the Fixed Income Division. He has spent the bulk of his career at General Electric, where he directed human resources in the Structured Finance Group after stints in GEs Commercial Finance and Equity Capital Groups.
Email Lionel or call him at (301) 951-6122.
Back to top
|
|
This newsletter 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.
|
|
Click
here to learn more about American Capital transactions or
here to contact someone at American Capital.
|
AmericanCapital.com |
|
|
|
