FOR IMMEDIATE RELEASE:
November 5, 2007

Contact
Jeff MacDowell, Managing Director(214) 273-6633
Adam Stern, Vice President(214) 273-6660
Brian Maney, Director, Corporate Communications (301) 951-6122

AMERICAN CAPITAL INVESTS IN ONE STOP BUYOUT™ OF RUG DOCTOR

Bethesda, MD – November 5, 2007 – American Capital Strategies Ltd. (Nasdaq: ACAS) announced today that it has invested in the One Stop Buyout™ of Rug Doctor, L.P., the largest manufacturer and marketer of premium steam cleaning carpet care machines rented and sold to consumers. American Capital’s investment takes the form of a revolving credit facility, first lien senior term loan, senior and junior subordinated debt, holding company notes and preferred and common equity. Rug Doctor’s management team is also investing equity in the business.

“We are pleased to be investing in Rug Doctor to support its domestic and international growth. Our One Stop Buyout™ capability enabled us to secure this attractive investment opportunity,” said Darin Winn, American Capital Regional Managing Director. “Rug Doctor’s experienced and committed management team is a significant asset as the Company continues to expand and innovate and we are excited to work with them.”

American Capital has invested directly and through its funds under management approximately $10.9 billion in the last twelve months, over $9.5 billion year to date and approximately $1.6 billion quarter to date. Not including funds under management, American Capital has invested approximately $8.2 billion in the last twelve months, approximately $7.1 billion year to date and over $1.1 billion quarter to date. For more information about American Capital’s portfolio, click here.

“Since its founding over 35 years ago, Rug Doctor has pioneered the expansion of the steam cleaning machine rental market with the development of its professional-grade products and sophisticated nationwide servicing model,” said Jeff MacDowell, American Capital Managing Director. “The Company’s success is supported by an attractive product offering of effective, affordable and easy to use carpet care and cleaning equipment and products and strong and long-standing relationships with the leading grocery, mass and Do-It-Yourself retailers.”

“We are happy to partner with management to continue the Company’s international expansion,” said Adam Stern, American Capital Vice President. “In addition, the Company has strong momentum in premium machine sales through expanding retail channels, which augment its direct-to-consumer infomercial and online presence.”

Rug Doctor was founded in 1972 by Roger Kent, who built the first machine in his garage. Since then, Rug Doctor has grown to become a household name and continues as the leading carpet care rental system with innovative products. Rug Doctor now rents machines to over six million consumers annually through approximately 42,000 retails outlets. Additionally, there are over 40 licensees of Rug Doctor products. In 2006, Rug Doctor was recognized by the Carpet and Rug Institute (CRI) and awarded its prestigious Gold standard as the only consumer-operated system to pass CRI’s rigorous standards in removing dirt particles from carpet fibers. Rug Doctor is located in Plano, Texas and currently has over 700 employees worldwide.

“The American Capital team recognized the quality products, systems and people that make Rug Doctor the leading player in the at-home carpet care machine rental and sales markets,” said Tim Wall, President and CEO of Rug Doctor. “Management partnered with American Capital due to their ability to fund the entire transaction, their local Dallas presence and access to American Capital's worldwide resources. We look forward to working with American Capital as we continue to expand and grow.”

“Together with the resources of American Capital, we believe the Rug Doctor brand will continue to grow both domestically and overseas,” said Steve Wahl, Vice President of Marketing for Rug Doctor. “This is great news for consumers, as we continue the vision of our founder, Roger Kent—to put the power of the professional in the hands of the consumer. Both with our innovative equipment design and with our expanding line of powerful cleaning products, Rug Doctor makes everyone a professional.”

ABOUT AMERICAN CAPITAL

American Capital is the only alternative asset management company in the S&P 500. With $19 billion in capital resources under management, American Capital is the largest U.S. publicly traded private equity fund and one of the largest publicly traded alternative asset managers. 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 $800 million per company in North America and €5 million to €500 million per company in Europe.

As of September 30, 2007, American Capital shareholders have enjoyed a total return of 596% since the Company's IPO, an annualized return of 21%, assuming reinvestment of dividends. American Capital has paid a total of $1.9 billion in dividends and paid or declared $26.16 dividends per share since going public in August 1997 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.

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.