FOR IMMEDIATE RELEASE:
August 20, 2008
Contact
Jon Isaacson, Managing Director, Buyouts(301) 951-6122
Adam Spence, Managing Director, Sponsor Finance(212) 213-2009
Eugene Krichevsky, Principal, Buyouts(301) 951-6122
Tim Robinson, Principal, Sponsor Finance(617) 217-2075
Brian Maney, Director, Corporate Communications(301) 951-6122
AMERICAN CAPITAL REALIZES $57 MILLION GAIN FROM SALE OF CONTEC
Provides Financing to Support Acquisition by Bain Capital with Contec Management
Bethesda, MD – August 20, 2008 – American Capital Ltd. (Nasdaq: ACAS) announced today that it realized a gain of $57 million from the sale of Contec Holdings, Ltd. in the third quarter of 2008. Including the investments in Contec of American Capital's affiliated funds under management, the gain totals $98 million over the life of the investment. Cumulative gains and dividend income realized by American Capital and its affiliates totaled over $120 million over the life of the investment.
American Capital has completed the sale of Contec to an affiliate of Bain Capital Partners, LLC together with the company's management. American Capital is also supporting the acquisition by investing in Contec's subordinated debt.
American Capital originally invested in Contec in June 2006 via a revolving credit facility, term loan, senior and junior subordinated debt and convertible preferred and common equity. American Capital has realized a 26% compounded annual rate of return on its debt and equity investments, including interest, dividends and fees earned over the life of its investment. On its equity only investments, American Capital earned a 30% compounded annual rate of return, including dividends and fees earned over the life of its investment. American Capital and its affiliates earned a 33% compounded annual rate of return on its equity only investments, including dividends and fees earned over the life of the investment. The proceeds received by American Capital were less than its second quarter 2008 valuation of the investment by $1 million, or less than 1%. For more information about American Capital's original investment in Contec, click here.
"Since our initial investment in Contec two years ago, the company has performed well, exceeding our expectations," said Brian Graff, American Capital Senior Managing Director. "We look forward to supporting the acquisition by Bain Capital and continuing our relationship with the Contec management team through this additional investment in the company's debt."
"It has been a pleasure working with Contec CEO Gary Stein and the rest of the Contec team," said Jon Isaacson, American Capital Managing Director, Buyouts. "Contec's continual improvements, efficiency and quality have set the standards for the industry."
"Contec will continue to play a critical role in the communication and entertainment value chain," said Eugene Krichevsky, American Capital Principal, Buyouts. "As the market continues to grow and become more and more complex, Contec is well positioned for future success."
American Capital, including its global fund management business, has approximately $20 billion in capital resources under management and over 290 portfolio companies. American Capital has invested directly and through its global asset management business approximately $8 billion in the last twelve months, $5.1 billion year to date and $310 million quarter to date. Not including funds under management, American Capital has invested approximately $4.4 billion in the last twelve months, $2.1 billion year to date and $300 million quarter to date. American Capital assisted in the syndication of approximately $1.3 billion of senior debt for its portfolio companies in the last twelve months and over $452.6 million year to date. For more information about American Capital's portfolio, click here.
"We are very pleased to have the opportunity to work with Bain Capital, one of the world's leading private equity firms, for the first time on this transaction," said Adam Spence, American Capital Managing Director, Sponsor Finance.
"Our willingness to provide subordinated debt exemplifies our long term commitment to supporting Contec's growth," said Tim Robinson, American Capital Principal, Sponsor Finance.
ABOUT AMERICAN CAPITAL
American Capital, with $20 billion in capital resources under management, is the only private equity fund and the largest alternative asset management company in the S&P 500. American Capital, both directly and through its global asset management business, originates, underwrites and manages investments in private equity, leveraged finance, real estate and structured products. 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. American Capital was founded in 1986 and currently has 12 offices in the U.S. and Europe.
As of July 31, 2008, American Capital shareholders have enjoyed a total return of 266% since the Company's IPO—an annualized return of 13%, assuming reinvestment of dividends. American Capital has paid a total of $2.5 billion in dividends and paid $29.25 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.
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