FOR IMMEDIATE RELEASE:
May 12, 2005

Contact
Bowen Diehl, Principal (214) 273-6632
John Drennan, Vice President (214) 273-6636
Brian Maney, Director, Corporate Communications (301) 951-6122

AMERICAN CAPITAL INVESTS $57 MILLION IN BUYOUT OF ENGINEERED TEXTILE GROUP

Bethesda, MD - May 12, 2005 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has invested $57 million in the buyout of Engineered Textile Group Inc. ("ETG"), parent company to Southern Weaving Company, a leading global provider of narrow, high tensile strength woven webbings to a wide variety of industries including marine, mining, transportation, construction and energy. American Capital's investment takes the form of senior term loans, senior and junior subordinated debt and preferred equity. American Capital's investment also includes a revolving credit facility. ETG management is rolling over a portion of equity and will continue to manage the company. Post close, American Capital owns a controlling interest in ETG with ETG management maintaining a significant ownership interest.

"Engineered Textile Group is typical of American Capital's investments: an industry leader in an attractive market niche with stable revenue growth and attractive financial performance," said American Capital COO Ira Wagner. "ETG has built a long history of delivering high quality, customized products that meet customers' stringent requirements. We are pleased to be partnering with them in continuing to serve its customers, develop new products and grow the company."

American Capital has invested over $2.4 billion in the last twelve months, nearly $740 million year to date and $330 million quarter to date. For more information about American Capital's portfolio click here.

"In addition to a world class product, ETG is delivering service, quality and performance to its customers," said American Capital Principal Bowen Diehl. "We are impressed with the company's relentless focus on its customers and producing products that meet exacting specifications and are delivered on a frequent and timely basis."

Founded in 1924, Greenville, South Carolina-headquartered, Engineered Textile Group, through its subsidiary Southern Weaving Company, manufactures webbing for lifting slings, fall protection harnesses, hose sleeving and cargo restraints. The Company's products are sold into a broad array of industries, including the construction, marine, mining, transportation, utility and energy industries. The Company has five facilities located in South Carolina, North Carolina and Canada and employs over 250 people. Pictured at left, sling web is used in the hoisting sling segment of the materials handling industry generally as an alternative to wire rope, chain or cable.

For more information about Engineered Textile Group's high quality, customized products click here.

ABOUT AMERICAN CAPITAL

American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $5.2 billion. American Capital is an investor in and sponsor of management and employee buyouts, invests in private equity 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.

As of April 30, 2005, American Capital shareholders have enjoyed a total return of 323% since the Company's IPO - an annualized return of 21%, assuming reinvestment of dividends. American Capital has paid a total of $717 million in dividends and paid or declared $17.51 dividends per share since its August 1997 IPO at $15 per share.

Companies interested in learning more about American Capital's flexible financing should contact Mark Opel, Senior Vice President, Business Development, at (800) 248-9340, or visit our website.

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 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, national or international economic conditions, or changes in the conditions of the industries in which American Capital has made investments.

This announcement is neither an offer to sell nor a solicitation to buy securities.
This announcement appears as a matter of record only.