Bethesda, MD - September 2, 2003 - American Capital Strategies Ltd. (Nasdaq:ACAS)announced today it has invested an additional $7.5 million in its portfolio company Stravina Operating Company LLC to support the acquisition of Hanover Accessories. American Capital's additional investment takes the form of subordinated debt and brings the Company's total current investment in Stravina to $27 million. Blue Capital Management LLC is the majority owner and equity sponsor of Stravina. Union Bank of California provided the original revolving credit facility and senior term loan to Stravina and is increasing the senior debt facility for this acquisition.
"With our additional investment in Stravina, we are helping finance a strategic acquisition of an excellent company in the souvenir, gift and accessories industry," said American Capital COO Ira Wagner. "Stravina has performed well since our original investment, and we are confident Stravina's management team, in conjunction with Blue Capital and Stravina's Board of Directors, will manage this acquisition effectively. American Capital remains on track to invest between $750 million and $850 million this year."
American Capital has invested more than $750 million in middle market companies in the past twelve months and more than $500 million this year. Quarter-to-date, American Capital has invested $150 million.
For more information about American Capital's portfolio click here.
"Hanover, the industry's innovation and style leader, is a complementary addition to Stravina and is expected to result in meaningful revenue and cost synergies," said American Capital Principal and Managing Director Jeri Harman. "Stravina will be able to benefit from Hanover's long-standing customer relationships, product breadth, and competitively advantageous new product design capabilities. This strategic acquisition also allows for cost savings by capitalizing on the consolidation of Asian sourcing and merchandising services."
Hanover Accessories, based in Plymouth, MN, designs and markets children's jewelry and hair accessories, pet accessories and novelty products. The company's ability to offer quality products, excellent delivery accountability and maintain high fill rates has enabled it to serve top mass merchants, pharmacies, theme parks, pet stores and other retailers. Hanover received Vendor of the Year Ward from Target for the Jewelry, Accessory and Cosmetics division in 9 out of the last 19 years, most recently in 1998 and 2001. The company proprietary brands include The Great PretendEars�, ImpawstersTM, City TailsTM, Star Struck�, Star Struck Princess� and Nicolina Accessories�. Pictured at left is an example of the Star Struck� line of traditional girls' dress-up items, allowing every young girl to be a star.
Hanover also operates CRS/Lawrence, a company offering in-store merchandising services for major retailers and manufacturers in over 14,000 retail stores across the country. Hanover and CRS/Lawrence both recorded attractive sales growth rates in the last three years.
American Capital first invested $19.5 million in Stravina in May 2002, supporting Blue Capital's acquisition. Stravina, headquartered in Chatsworth, CA, is a leading designer and supplier of impulse purchase novelty and souvenir items. With over 900 product lines, Stravina's products include personalized key chains, photo frames, pens, pencils, rulers, Post-It notes, as well as souvenir products including magnets, shot glasses and plush toys. The company sells to five of the top ten retailers in the U.S.
For more information about Stravina's personalized products click here
"With American Capital's ongoing support, along with Union Bank and an excellent management team, we look forward to increasing and strengthening Stravina's presence in the novelty products market," said Blue Capital Management Managing Director Robert Taylor. "We know we can count on American Capital as a business partner. They were quick to respond to issues, solve problems, and they delivered for the benefit of all parties."
As of August 31, 2003, American Capital shareholders have enjoyed a total return of 175% since the Company's IPO -- an annualized return of 18%, assuming reinvestment of dividends. American Capital has paid or declared a total of $12.37 per share in dividends since its August 1997 IPO at $15 per share.
American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $1.8 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.
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.
