FOR IMMEDIATE RELEASE:
February 26, 2007

Contact
Frank Do, Managing Director (310) 806-6280
Shaun Park, Vice President (310) 806-6280
Brian Maney, Director, Corporate Communications (301) 951-6122

AMERICAN CAPITAL INVESTS $31 MILLION IN J-PAC

Bethesda, MD – February 26, 2007 – American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that it and an affiliate invested $31 million in J-Pac LLC, a leading supplier of medical contract manufacturing, assembly and packaging services.  American Capital’s one stop debt financing solution takes the form of senior term unirate loans and common equity and supports Riverside Partners LLC’s buyout of J-Pac.  American Capital is also providing a revolving credit facility.  American Capital Equity Fund I LLC (“ACE”), a fund managed by American Capital, provided 30% of the American Capital equity investment.  J-Pac’s owner and management team are investing in J-Pac’s equity, along with Riverside Partners.

“We are delighted that this is our fourth investment with Riverside Partners,” said Darin Winn, American Capital Regional Managing Director.  “We believe that our ability to formulate a one stop financing package consisting of a unirate debt facility, as well as a revolving credit facility and equity, made us, yet again, an attractive investment partner for Riverside.”

American Capital invested directly and through its funds under management $6.7 billion in 2006 and $2.2 billion in the fourth quarter of 2006 and has invested $962 million in 2007 year to date.  Not including funds under management, American Capital invested $5.1 billion in 2006 and $1.7 billion in the fourth quarter of 2006 and has invested $710 million in 2007 year to date.  For more information about American Capital’s portfolio, click here.

“As an FDA registered and ISO certified organization, J-Pac is able to help its clients cost-effectively produce and package low volume kits and devices and bring new products to market quickly,” ”said Frank Do, American Capital Managing Director. “Given the extreme sterile conditions and the stringent FDA approvals required to switch contract manufacturers and the consequential risk to patients, OEMs are trending towards longer and deeper relationships with their manufacturing partners. J-Pac’s engineers work directly with the OEM and therefore gain a deep knowledge and understanding of the customers’ needs and processes.”

“Building on its 23 year history, J-Pac continues to grow revenues and consistently exhibits strong financial characteristics.  The senior management team has an average of 15 years industry experience and has built long standing relationships with multiple contacts within various layers of its customer organizations,” said Shaun Park, American Capital Vice President.  “J-Pac’s focus on providing superior service and demonstrating high levels of responsiveness in the long-term has enabled the Company to evolve its relationships with its customers into strategic partnerships, often leading to exclusive contracts with many of its blue-chip clients.”

Founded in 1983, J-Pac provides medical device and pharmaceutical OEMs with the equipment and value added contracted services required to meet the rigorous regulatory and safety requirements of medicines and medical devices.  The Company’s products are used in growing medical device markets such as cardiovascular, orthopedics, general surgery, minimally invasive procedures, wound care and medicine delivery systems.  J-Pac specializes in contract manufacturing, contract packaging, clean room processing and implantable textiles. The Company operates out of two divisions, J-Pac and Doyen Medipharm.  Headquartered in Somersworth, New Hampshire, J-Pac maintains a manufacturing facility in Florida and the United Kingdom and a sales office in Malaysia.

“We are delighted to partner with American Capital once again.  They were able to provide an integral piece to the financing puzzle,” said David Belluck, Riverside Partners’ General Partner.  “We look forward to a continuing a long running relationship with American Capital and its dedicated team of professionals.”

ABOUT AMERICAN CAPITAL

American Capital is the second largest U.S. publicly traded alternative asset manager with approximately $10 billion in assets under management (second to Fortress (NYSE: FIG)).  American Capital, both directly and through its global asset management business, is an investor in management and employee buyouts, private equity buyouts, and early stage and mature private and public companies.  American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations.  American Capital and its affiliates invest from $5 million to $750 million per company in North America and €5 million to €400 million per company in Europe.

As of January 31, 2007, American Capital shareholders have enjoyed a total return of 655% since the Company's IPO - an annualized return of 24%, assuming reinvestment of dividends.  American Capital has paid a total of $1.4 billion in dividends and paid or declared $23.33 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 www.AmericanCapital.com or www.EuropeanCapital.com.

ABOUT RIVERSIDE PARTNERS LLC

Founded in 1989, Riverside Partners invests in leading healthcare and technology companies based in North America, with a particular focus on companies that are founder- and family-owned. Riverside targets companies with revenues between $20 million and $200 million and with EBITDA from $5 million to $25 million. In addition to J-Pac, American Capital supported  Riverside Partners’ and Stone Creek Capital’s September 2004 acquisition of BarrierSafe Solutions International, a leading developer and marketer of disposable gloves and related products.

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 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.