Bethesda, MD - April 2, 2003 - American Capital Strategies Ltd. (Nasdaq:ACAS)announced today it has invested $40 million to recapitalize ACE Cash Express, Inc. (Nasdaq: AACE), one of the nation's largest owners, operators and franchisors of retail financial services stores. American Capital's investment takes the form of senior secured subordinated notes, with proceeds being used to refinance a portion of ACE's existing debt. A bank group led by Wells Fargo Bank Texas, JP Morgan Chase Bank, Bank of America and US Bank remains as the company's revolving credit facility provider. New lenders in the company's revolving credit facility include US Bank and Southwest Bank of Texas.
"With this transaction, American Capital is investing in the senior secured subordinated debt of a 35 year old company with a growing national franchise and a specific niche in the financial services industry," said American Capital COO Ira Wagner.
American Capital has invested more than $600 million in the last twelve months.
For more information about American Capital's portfolio click here.
"This is a perfect example of the senior lender pull back that we have been describing for the past two years," said American Capital CFO John Erickson. "Our loan is replacing a senior term loan that was originated during a period when senior lenders were pricing this type of risk at a couple hundred basis points over LIBOR. Our loan has a second lien on all the assets of the company including large amounts of cash and receivables and we believe we are well positioned in Ace's capital structure. Banks have pressured numerous performing companies to recapitalize and repay senior loans."
"American Capital is backing a nationally well-established company with excellent potential for continued future growth and profitability," said American Capital Principal Jeff MacDowell. "With ACE's already proven ability to grow and satisfy customers' needs, as seen with its exceptionally high rate of repeat customers, the company is prepared to meet the market's continuously rising demands for retail financial services."
ACE Cash Express, Inc. is headquartered in Irving, Texas and is the largest owner, operator and franchiser of check-cashing stores in the United States. Founded in 1968, the Company has a total network of 1,170 stores, consisting of 974 company-owned stores and 196 franchised stores in 35 states and the District of Columbia. ACE also maintains automatic check-cashing machines, which provide financial services without the need for a service associate, at 22 company-owned store locations and, during the tax season, at more than 240 H&R Block retail offices. ACE offers a broad range of check- cashing and other consumer financial services and is one of the largest providers of MoneyGram wire transfer transactions. In addition, ACE offers money orders, bill payment services, and prepaid local and long distance telecommunication services. Small, short-term consumer loans are also available to customers at various ACE company-owned stores. Pictured at left is one of ACE's many conveniently located stores. The company's website is found at www.acecashexpress.com.
"American Capital's investment allows us to capitalize on the increasing demand for retail financial services by penetrating existing markets and expanding into new markets, while maintaining both an intense focus on customer service, and a broad suite of products and services that conveniently meet our customer's needs," ACE Cash Express President & COO, Jay Shipowitz.
For more information on ACE Cash Express and its variety of retail financial services click here.
American Capital is a publicly traded buyout and mezzanine fund with capital resources exceeding $1.5 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 should contact Mark Opel, Principal, at (800) 248-9340, or visit our website.
American Capital paid $2.55 in regular dividends in 2002, a 15% increase over 2001, and including the bonus dividend declared in 2002, paid or declared a total of $2.57 in dividends in 2002. American Capital has paid or declared a total of $11.00 per share in dividends since its August 1997 IPO at $15 per share.
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.
