FOR IMMEDIATE RELEASE:
March 3, 2006

Contact
Bowen Diehl, Principal (214) 273-6632
Kyle Bradford, Vice President (214) 273-6637
Brian Maney, Director, Corporate Communications (301) 951-6122

American Capital Invests $79 Million in One Stop BuyoutTM of the Meadows of Wickenburg

Bethesda, MD - March 3, 2006 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has invested $79 million in the One Stop Buyout^TM of The Meadows of Wickenburg L.P., a premier multi-disorder inpatient facility specializing in the treatment of a broad range of addictions. American Capital's investment takes the form of senior debt, senior and junior subordinated debt and preferred and common equity. American Capital is also providing a revolving credit facility. Senior members of the management and clinical teams are also investing in the equity. Post close, American Capital owns approximately 88% of the Company, on a fully diluted basis.

"We are pleased to announce our One Stop Buyout^TM of The Meadows of Wickenburg. Our ability to fund throughout the entire capital structure of a transaction makes us an excellent partner for management teams seeking support for their growth initiatives," said American Capital Regional Managing Director Darin Winn. "We're supporting world-class management and clinical teams who have developed a well-respected treatment model providing high quality care to patients from around the world."

American Capital invested approximately $3.2 billion in the last twelve months and $312 million year to date. These amounts do not include American Capital's unfunded equity commitment and debt funded to its portfolio company European Capital. For more information about American Capital's portfolio, click here.

"The treatment provided by The Meadows and the world renowned work of its staff and Senior Fellows has established The Meadows as a premier treatment program," said American Capital Principal Bowen Diehl. "The Meadows is dedicated to providing its patients with holistic care through treating emotions, body, mind and spirit."

"We find The Meadows' treatment programs intriguing as they not only treat the symptoms of addiction, but they focus on the root causes of the patients' disorders in a non-threatening environment," said American Capital Vice President Kyle Bradford. "At The Meadows many of the members of the staff offer their own recovery experiences to further provide a comfortable and understanding environment in which individuals can work with the staff to identify and address the core patterns that have caused the continual return to self-destructive behaviors."

Founded in 1976, The Meadows is a multi-disorder treatment facility offering treatment for psychological conditions, compulsive and addictive behaviors, and affective disorders, such as post-traumatic stress, alcoholism, drug addiction, sexual compulsivity/aversion, major depression and bipolar disorders. Located on a 10 acre campus in Wickenburg, Arizona, The Meadows consists of an inpatient facility and an extended care facility. Treatment at The Meadows is personalized to meet individual needs. A multidisciplinary team of psychiatrists, psychologists and professional counselors work cooperatively and consistently with dedication to the best interest of each patient. The Meadows' intensive treatment program is 12 step-based and enhanced by a comprehensive program (The Meadows Model) created by Pia Mellody and Pat Mellody, pioneers in the field of recovery. The Meadows also offers workshops on its campus, as well as around the country, which are conducted by its professional staff. At these workshops, alumni can progress on their road to recovery and counseling professionals can receive training on the treatment principles of The Meadows Model.

"With the strong financial backing of American Capital, The Meadows is primed to expand its programs to meet the demands of the treatment community while maintaining the crucial integrity of The Meadows' treatment model," said The Meadows Executive Director Bob Fulton.

"American Capital appreciates the growing need for treatment that extends beyond the outward addictive behavior and addresses the underlying issues that often lead to the addiction and prevent many people from leading happy, productive lives. They respect the importance of effective patient care and our treatment model here at The Meadows," said Clinical Consultant and Senior Fellow to The Meadows Pia Mellody. "We are excited to have such a partner that will support us in expanding our work in reaching people in need around the world."

"I am pleased with American Capital's interest in our program here at The Meadows and their desire to support the team in continuing our traditions of intensive patient treatment and strict confidentiality," said The Meadows Senior Executive Director Pat Mellody.

ABOUT AMERICAN CAPITAL
American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $7 billion. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, provides capital directly to early stage and mature private and small public companies and through its asset management business is a manager of debt and equity investments in private companies and commercial loan obligations. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital can invest up to $300 million per transaction.

As of February 28, 2006, American Capital shareholders have enjoyed a total return of 404% since the Company's IPO - an annualized return of 21%, assuming reinvestment of dividends. American Capital has paid a total of $961 million in dividends and paid or declared $19.11 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.