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American Capital Assigned BBB, Baa2, BBB Ratings By Moody's, Standard & Poor's, Fitch
In December, American Capital announced that Moody's Investors Service assigned a Baa2 long-term issuer rating to American Capital and Standard & Poor's Ratings Services assigned a BBB counterparty credit rating. In addition, Fitch Ratings upgraded American Capital's long-term issuer default rating (IDR) and senior unsecured debt rating to BBB. Fitch, Moody's and Standard & Poor's gave their American Capital ratings a stable outlook.
For the complete Moody's press release, click here.
For the complete Standard & Poor's press release, click here.
For the complete Fitch Ratings press release, click here.
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January Equity Offering Totals $289 Million
In January, American Capital closed a public offering of 6.3 million shares of its common stock at $45.83 per share (the "Offering Price"). Of those shares, 4.3 million shares were sold directly by American Capital for approximately $197 million in gross proceeds. The remaining 2 million shares were borrowed and sold by an affiliate of J.P. Morgan Securities Inc., an affiliate of Morgan Stanley & Co. Incorporated, and an affiliate of UBS Securities LLC (collectively, "the Counter-Parties") for approximately $92 million in gross proceeds in connection with agreements between the Counter-Parties and American Capital (the "Forward Sale Agreements"). The Forward Sale Agreements provide for the purchase by the Counter-Parties of an aggregate 2 million shares of common stock from American Capital at a future date at the Offering Price, less certain adjustments. American Capital will receive the proceeds from the sale of common stock pursuant to the Forward Sale Agreements at a future date upon settlement.
This newsletter is neither an offer to sell nor a solicitation of an offer to buy shares of common stock. The offering of securities can be made only by means of a prospectus and a related prospectus supplement.
For the complete release, click here.
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American Capital Secured Credit Facility Increased to $1.25 Billion
In October, American Capital, through a special purpose subsidiary, completed an amendment to its commercial paper conduit securitization facility administered by Wachovia Capital Markets LLC, which increased the facility amount from $1 billion to $1.25 billion. The amendment also extended the term of the facility for an additional year to October 2007, and increased the number of banks participating in the facility from four to six. New institutional lenders are HSBC Bank USA, National Association, backed by conduit lender Bryant Park Funding LLC, and Credit Suisse, New York Branch, backed by conduit lender Alpine Securitization Corp. The facility is priced at LIBOR plus 75 basis points and is secured by certain senior and subordinated debt assets originated by American Capital.
For the complete press release, click here.
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American Capital Paid or Declared $3.33 in Dividends in 2006, 8% Increase Over 2005
In October, American Capital declared a fourth quarter 2006 regular dividend of $0.88 per share, which was paid on January 18, 2007. This dividend was an 11% increase over the fourth quarter 2005 regular dividend of $0.79 per share. Total dividends declared in 2006 were $3.33 per share, an increase of 8% over 2005. American Capital has paid a total of $1.4 billion in dividends and paid $22.44 per share since its August 1997 IPO at $15.00 per share.
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Investment to Acquire Equity Interest in Explorer Pipeline Company
In January, American Capital and an affiliate acquired a 6.8% equity interest in Explorer Pipeline Company, the owner and operator of the second largest refined liquid petroleum products pipeline in the United States. American Capital's investment took the form of senior subordinated debt and common equity. American Capital Equity Fund I LLC (ACE), a fund managed by American Capital, provided 30% of the American Capital equity investment. The investment funds the buyout of CITGO Pipeline Holding II LLC's, a wholly owned subsidiary of CITGO Petroleum Corporation, minority interest in Explorer.
Explorer was formed by eight oil companies and shipped its first product in 1971. The Company owns and operates a 1,400 mile common-carrier pipeline system that transports gasoline, diesel fuel, jet fuel and other petroleum products for customers from the Gulf Coast to the Midwestern United States. Through connections with other products pipelines, Explorer serves more than 70 major population centers in 16 states. Major tankage and terminals are located at Port Arthur, Greenville and Grapevine, Texas; Glenpool, Oklahoma; Wood River, Illinois; and Hammond, Indiana. There are presently 32 pump stations located throughout the system. It can take as few as 11 days to transport a barrel of product from the Gulf Coast to Chicago on the Company's system. Explorer is headquartered in Tulsa, OK.
For the complete press release, click here.
Contact Michael Gee, Principal, Energy Group, at (214) 273-6667.
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$255 Million Investment in Combination of TestAmerica Holdings and Severn Trent Laboratories
In December, American Capital and an affiliate invested $255 million in TestAmerica Holdings, Inc., the second largest operator of environmental testing laboratories in the United States. The investment supported TestAmerica's combination with Severn Trent Laboratories (STL), a division of Severn Trent plc and the largest operator of environmental testing laboratories in the United States. American Capital's one stop financing took the form of senior term loans, senior subordinated debt and preferred equity. American Capital is also providing a revolving credit facility. American Capital Equity Fund I LLC (ACE), a fund managed by American Capital, provided 30% of the American Capital equity investment. H.I.G. Capital LLC is the majority owner of TestAmerica-STL.
TestAmerica-STL provides a full spectrum of environmental testing services, including the complete range of analyses of soil, water waste and air samples for trace levels of organic, inorganic and metal contaminants; and air quality and emissions testing, including analyses of mold, food microbiology and allergens. The Company also develops and supplies sampling and remediation pumping systems for landfills and ground water contamination sites and other environmental testing products. TestAmerica-STL serves its customer base of over 12,000 clients, including major industrial companies, engineering and consulting firms and government entities, through over 100 laboratories and service centers in the United States.
For the complete press release, click here.
Contact Bowen Diehl, Managing Director, Sponsor Finance, at (214) 273-6630.
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Investment in the Acquisition and Merger of Vision Solutions and iTera
In October, American Capital and an affiliate invested in support of Thoma Cressey Equity Partners' acquisition and merger of Vision Solutions, Inc. 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.
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.
For more information about Vision Solutions, click here.
Contact Natasha Volyanskaya, Principal, at (415) 591-0120.
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One Stop Financing Investment to Support the Acquisition of CreditCards.com
In October, American Capital and an affiliate invested in support of the acquisition of CreditCards.com. CreditCards.com is an Internet lead generation and marketing organization that operates a top-ranked website where consumers can search for, compare and apply for credit cards. American Capital's one stop debt financing solution took the form of a senior term A unirate loan and convertible preferred equity and supported Austin Ventures' buyout of CreditCards.com. American Capital also provided a revolving credit facility. American Capital Equity Fund I LLC (ACE), a fund managed by American Capital, provided 30% of the American Capital equity investment. Austin Ventures, new CreditCards.com CEO Elisabeth DeMarse and existing shareholders invested in the equity.
Founded in 2003, CreditCards.com is an Internet lead generation and marketing organization that operates the premier website where consumers can search for, compare and apply for credit cards. After comparing offers at CreditCards.com, visitors wishing to submit applications are redirected to card issuers' websites. CreditCards.com serves most of the major credit card issuers in the U.S., including Citibank, Chase, Discover, American Express and HSBC/Orchard. The Company is headquartered in Austin, TX.
For more information about CreditCards.com, click here.
Contact Bowen Diehl, Managing Director, Sponsor Finance, at (214) 273-6630.
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One Stop Financing to Support the Acquisition of Haband Company, Inc.
In October, American Capital and an affiliate provided one stop financing to Haband Company, Inc., one of America's oldest direct mail-order houses. American Capital's financing supported the acquisition of Haband by Golden Gate Capital.
Haband, founded in 1925, is one of America's oldest direct mail-order houses. The Company sells a wide variety of low-priced casual apparel, shoes and accessories in basic styles and colors that are sourced internationally. Haband markets its products through weekly mailings, magazine and newspaper advertisements, catalogs, its website and three retail stores. Its customers are largely moderate and middle income seniors over 60 years old. Haband is headquartered in Oakland, NJ, and has a call center in Athens, GA, a warehouse and fulfillment center in Eatonton, GA and a data processing center in Peckville, PA.
For more information about Haband, click here.
Contact Natasha Volyanskaya, Principal, at (415) 591-0120.
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$12.5 Million Investment in Narus, Inc.
In October, American Capital and an affiliate invested $12.5 million in convertible preferred equity issued by Narus, Inc., a provider of the only carrier-class, real-time Internet Protocol (IP) traffic analysis system essential to manage, secure and deliver services over IP. American Capital is also providing a revolving credit facility. American Capital Equity Fund I LLC (ACE), a fund managed by American Capital, provided 30% of the American Capital equity investment. Existing Narus investors J.P. Morgan Partners, NeoCarta Ventures Inc., Walden International and Mayfield Fund also participated in the American Capital-led financing, which totaled $20 million.
Narus, founded in 1997, is a leading provider of security, classification and government compliance solutions for carrier-class networks. NarusInsight™ provides customers with network protection through detection of anomalous events including worms and viruses; usage and content-based billing for any form of IP data; and analysis of traffic for network planning, marketing or real-time management. NarusInsight™ has garnered several awards over the last two years including the Red Herring Top 100, the AlwaysOn AO100 Private Company award, and the 2006 Tomorrow's Technology Today award. The Company's customers include leading landline and wireless carriers such as at&t Inc., KDDI Corporation, Telecom Egypt, Saudi Telecom, Brasil Telecom, US Cellular and T-Mobile. Narus is headquartered in Mountain View, CA and has subsidiaries in India and China. Narus also has sales offices in Washington, DC, China, Japan, Singapore, Hong Kong, Brazil, the United Kingdom and France.
For more information about Narus, click here.
Contact Virginia M. Turezyn, Managing Director, Technology Group or Greg Smitherman, Managing Director, Technology Group, at (650) 289-4560.
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$411 Million in One Stop Buyout™ of WIS International, Inc.
In January, American Capital invested $411 million in the One Stop Buyout™ of WIS International, Inc., a leading global provider of outsourced inventory management services. American Capital's investment took the form of a senior term B loan, senior subordinated debt, holding company PIK notes and common and redeemable preferred equity. American Capital is also providing a revolving credit facility. American Capital Equity Fund I LLC (ACE), a fund managed by American Capital, provided 30% of the American Capital equity investment. WIS management invested in equity. American Capital and ACE now own 81% of WIS, on a fully diluted basis.
WIS International was founded in 1967. The Company's core business is to provide the systems, technology and staff for third-party inventory verification services. WIS has U.S. headquarters in San Diego, CA and Canadian headquarters in Toronto, Ontario. The Company has over 200 offices across the U.S., Canada and internationally with operations based in the U.K., China, Japan, Mexico, Brazil and Argentina. Annually WIS provides over 135,000 counts or approximately 370 counts per day for retail clients such as Wal-Mart, Home Depot, Rite Aid, Lowe's, Walgreen's and Dollar General.
For the complete press release, click here.
Contact Robert Klein, Managing Director, at (212) 213-2009.
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$41 Million in One Stop Buyout™ of Pacific Handy Cutter, Inc.
In December, American Capital and an affiliate invested $41 million in the One Stop Buyout™ of Pacific Handy Cutter, Inc. (PHC), a leading designer, manufacturer and marketer of branded razor cutting tools with enhanced safety features for the store supply and safety market. American Capital's investment took the form of a senior term A loan, senior and junior subordinated debt and equity. American Capital is also providing a revolving credit facility. American Capital Equity Fund I LLC (ACE), a fund managed by American Capital, provided 30% of the American Capital equity investment. American Capital and ACE now own approximately 78% of PHC, on a fully diluted basis.
Founded in 1950, Pacific Handy Cutter is based in Costa Mesa, CA and has presence in England. Along with the Company's patented flagship product the Safety Cutter (S-Series), PHC manufactures other popular brands including the original Pacific Handy Cutter™, QuickBlade™ Utility Knife Series, and the RZ3 Safety utility knife. Customers include well-known retailers and grocers Wal-Mart, Safeway, Kroger, Albertson, Office Depot, Ace Hardware and Snap-On.
For more information about Pacific Handy Cutter, click here.
Contact Frank Do, Managing Director, at (310) 806-6280.
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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 newsletter 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 and international economic conditions, and changes in the conditions of the industries in which American Capital has made investments. This newsletter is neither an offer to sell nor a solicitation of an offer to buy shares of common stock. The offering of securities can be made only by means of a prospectus and a related prospectus supplement.
Two Bethesda Metro Center
14th Floor
Bethesda, MD 20814
Phone: (301) 951-6122
Fax: (301) 654-6714
Info@AmericanCapital.com
Nasdaq: ACAS
www.AmericanCapital.com
(800) 248-9340
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