Bethesda, MD - March 30, 2006 - American Capital Strategies Ltd. ("American Capital" or the "Company") (Nasdaq:ACAS) announced today it has priced its public offering of 12 million shares of its common stock at $35.31 per share. Of those shares, 8 million shares are being offered directly by the Company and 4 million shares are being offered by the Counter-Parties (as defined below) in connection with agreements to purchase common stock from American Capital at a future date (the "Forward Sale Agreements"), as discussed below. American Capital has granted the underwriters an option to purchase up to an additional 1,800,000 shares of common stock to cover over-allotments. The offering is subject to customary closing conditions and is expected to close on Tuesday, April 4, 2006. Citigroup Corporate and Investment Banking, Wachovia Capital Markets, LLC, J.P. Morgan Securities Inc., UBS Securities LLC, A.G. Edwards & Sons, Inc., Bear, Stearns & Co. Inc., BB&T Capital Markets, a division of Scott and Stringfellow, Inc., Piper Jaffray & Co., BNP Paribas Securities Corp., Calyon Securities (USA) Inc. and RBC Capital Markets Corporation are the underwriters for the offering. Citigroup Corporate and Investment Banking and Wachovia Capital Markets, LLC are joint book running managers for the offering. The offering will be made under American Capital's existing shelf registration statement filed with the Securities and Exchange Commission. In connection with the offering, American Capital will enter into an agreement (each, a "Forward Sale Agreement") with each of Citigroup Global Markets Inc. and an affiliate of Wachovia Capital Markets, LLC (the "Counter-Parties" and each, a "Counter-Party"), under which the Counter-Parties will agree to borrow and sell to retail and institutional investors in the aggregate 4 million of the offered shares of the Company's common stock at the close of this offering at the same offering price (the "Offering Price") as the 8 million shares being offered directly by American Capital. Under the Forward Sale Agreements, American Capital will agree with the Counter-Parties that American Capital must sell to them in the aggregate 4 million shares of common stock at the Offering Price per share, subject to certain adjustments. The timing of these sales, which must occur within the next year, will generally be determined by American Capital. The Company will physically settle each Forward Sale Agreement by delivering shares of common stock to the Counter-Party under the relevant Forward Sale Agreement and such Counter-Party will deliver the Offering Price subject to certain adjustments to the Company upon each settlement. American Capital expects to use substantially all of the net proceeds of approximately $271 million from the direct sale of 8 million shares of common stock to reduce the borrowings under the Company's existing revolving credit facilities and to fund investments. American Capital expects to use substantially all of the net proceeds from the shares of common stock being offered pursuant to the Forward Sale Agreements, which initially are valued at approximately $136 million, subject to certain adjustments, primarily to reduce the borrowings under the Company's existing revolving credit facilities and to fund investments. Reducing borrowings under the revolving credit facilities will create availability under the facilities, which will generally be used for funding future American Capital investments and general corporate purposes. This press release is neither an offer to sell nor a solicitation of an offer to buy shares of common stock. The offering of these securities will be made only by means of a prospectus and a related prospectus supplement. When available, copies of the prospectus and prospectus supplement may be obtained from Citigroup Corporate and Investment Banking, 140 58th Street, 8th Floor, Brooklyn, New York 11220 (telephone number: 718-765-6732) or Wachovia Capital Markets, LLC, 375 Park Avenue, New York, New York 10152-4077, Attn: Equity Syndicate,equity.syndicate@wachovia.com. 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 invests up to $300 million per transaction. 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. |
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