Bethesda, MD - August 16, 2002 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that its portfolio company Weston Solutions Inc. has prepaid $10 million in junior subordinated notes. American Capital has earned a 59 percent annualized return on the note including a realized gain of $2.4 million. WESTON is a leading environmental remediation, redevelopment and management and compliance firm, delivering comprehensive solutions to complex problems for industry and government worldwide.
American Capital invested $30 million in a going-private acquisition of Weston Solutions in June 2001. That initial investment took the form of $17 million in senior subordinated notes, $10 million in junior subordinated notes and $3 million in preferred equity and common stock. American Capital also received detachable warrants to purchase up to 27.6 percent of Weston's common stock as part of the investment in the subordinated debt. The refinancing of the junior subordinated notes was made possible by the company's ahead-of-plan performance. In accordance with GAAP, the $10 million junior subordinated notes were carried at a discount to face value as a result of the value assigned to the associated detachable warrants.
"American Capital's gain on this transaction is a result of Weston's great performance," said American Capital Principal and Managing Director David Ehrenfest Steinglass. "American Capital's ability to invest in and harvest gains from companies like Weston allows us to continue to build shareholder value."
"Prepaying $10 million of our acquisition debt is evidence of our successful start as a private company," said Bill Robertson, Weston Solutions CEO. "Our reduced debt service will enhance our equity returns, making this transaction a win-win for all parties."
This is American Capital's fifteenth exit or partial exit since its August 1997 IPO. Since its IPO, American Capital has realized a compounded annual return of 28 percent on all of its exited investments.
For more information about American Capital's portfolio gains click here.
For more information about WESTON click here.
American Capital has a declared a $.66 per share dividend to be paid on October 1, 2002 to record holders as of September 12, 2002. This dividend is an 18% increase over the third quarter 2001 regular dividend of $0.56 per share. American Capital has paid or declared $9.64 in dividends since its August 1997 IPO at $15.00 per share.
American Capital is a publicly traded buyout and mezzanine fund with capital resources exceeding $1 billion. American Capital is an equity partner in management and employee buyouts; invests in private equity sponsored buyouts, and provides capital directly to private and small public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations.
Companies interested in learning more about American Capital's flexible financing and ability to provide senior debt, subordinated debt and equity should contact Mark Opel, Principal, at (800) 248-9340, or visit our website.
This press release 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.
