ACAS American Capital, Ltd.

American Capital Realizes $30 Million in Gains From Four Exits BETHESDA, Md., May 3 /PRNewswire-FirstCall/ -- American Capital Strategies Ltd. (NASDAQ:ACAS) announced today that it has received total proceeds of $68 million from exits of four portfolio companies, realizing a total gain of $30 million. Roadrunner Freight Systems Inc. American Capital has realized a gain of $26 million in the second quarter of 2005 from the sale of its portfolio company Roadrunner Freight Systems Inc. to Thayer Capital. American Capital received total proceeds of $47 million upon the exit, earning a 69% compounded annual rate of return on its investment in subordinated notes and common equity interest. The 69% return includes the realized gain, interest and fees received over the life of American Capital's investment in the company. In July 2003, American Capital invested $33 million in the acquisition of Roadrunner Freight Systems Inc., a transportation services company based in Milwaukee, WI. American Capital's investment took the form of senior and junior subordinated debt with warrants and common equity. In 2004, the company prepaid $14 million of American Capital's senior subordinated note, resulting in a gain of $1.7 million. American Capital's total realized gain over the life of its investment in Roadrunner was $28 million. The amount realized by American Capital was more than the first quarter 2005 valuation of the investment by $2 million, or 5%. To assist in Thayer's purchase of Roadrunner, American Capital is providing $24 million of financing in the form of senior and junior subordinated notes. LaSalle Bank provided senior debt. American Capital owns no equity in the newly capitalized company. "Our investment in Roadrunner produced an excellent outcome for American Capital," said American Capital Principal Jon Isaacson. "In addition, we are happy to be partnering with Thayer for the second time and, through our new subordinated debt investment, to continue to be part of the Roadrunner success story." For more information about the Roadrunner transaction, go to: http://www.acas.com/our_portfolio/companies/company.cfm?p_comp=108 The Lion Brewery Inc. American Capital earned a $2 million gain and received full repayment of its senior subordinated note in The Lion Brewery Inc. in the first quarter of 2005. American Capital received total proceeds of $8.8 million upon the exit, earning a 17% compounded annual rate of return on its investment in subordinated notes and warrants. The 17% return includes the realized gain, interest and fees received over the life of American Capital's investment in the company. The amount realized by American Capital was less than the fourth quarter 2004 valuation of the investment by $1.8 million, or 17%. In January 1999, American Capital invested $6.6 million in the management buyout of The Lion Brewery Inc. American Capital's investment took the form of senior subordinated debt with warrants. Lion Brewery is a producer and bottler of non-alcoholic malt products, craft and traditional beers and specialty soft drinks. Established in 1933, it has operated continuously at the same facility. "Lion Brewery was our first going private transaction," said American Capital Principal Ken Jones. "We were very pleased to support Lion's outstanding management as they expanded their business." For more information about The Lion Brewery transaction, go to: http://www.americancapital.com/our_portfolio/companies/company.cfm?p_comp=15 Bumble Bee Seafoods L.P. In May 2003, American Capital and a wholly-owned affiliate invested $15 million of senior subordinated debt with limited partnership interests in Bumble Bee Seafoods LP, a leading global producer and marketer of canned tuna and other seafood and the leader in the premium albacore tuna market. American Capital's investment supported the acquisition of the assets and operations of Bumble Bee from ConAgra Foods Inc. by management and affiliates of Centre Partners Management LLC. In May 2004, in connection with Bumble Bee's merger with Connor Bros. Income Fund, American Capital was repaid its $15 million senior subordinated debt investment and American Capital's affiliate received a partial distribution related to its limited partnership investment in Bumble Bee. American Capital realized a gain of $0.5 million on the repayment of the debt in 2004. In the second quarter of 2005, the affiliate of American Capital received a final distribution related to its limited partnership investment in Bumble Bee, resulting in the recognition of a gain, net of tax, of $1.9 million in the second quarter of 2005. Over the life of its investment in Bumble Bee, American Capital and its affiliate have realized a total gain of $2.4 million, earning a 32% compounded annual rate of return on its investment in subordinated notes and limited partnership units. The 32% return includes the realized gain, interest and fees received over the life of American Capital's investment in the company. "American Capital is glad to have been able to support Centre Partners as it worked with Bumble Bee management to create the largest branded seafood company in North America," said American Capital Managing Director Frank Do. Bumble Bee, with world headquarters in San Diego, CA, in addition to its leading position in the canned albacore tuna market, has established the second leading position in the overall canned tuna U.S. market and leading positions in other major canned seafood markets such as salmon and specialty canned seafood. The company sells its broad range of products under the well- known brands Bumble Bee, Clover Leaf, Brunswick and Beach Cliff. For more information about the Bumble Bee transaction, go to: http://www.acas.com/our_portfolio/companies/company.cfm?p_comp=99 Valley Proteins Inc. American Capital received full repayment of its subordinated note investment in Valley Proteins Inc. in the second quarter of 2005. American Capital received total proceeds of $10 million upon the exit, earning a 22% compounded annual rate of return on its investment in subordinated notes. The 22% includes the interest and fees received over the life of American Capital's investment in the company. In June 2004 American Capital invested $10 million in the senior subordinated debt of Valley Proteins Inc., a leading independent recycler and renderer of food processing by-products. The company procures its raw materials from over 40,000 suppliers, ranging from small restaurants, butcher shops and grocery stores to some of the world's largest poultry and beef processors. The company sells fats, proteins and related products to over 170 customers, including producers of livestock feed and pet food. Valley Proteins employs over 1,000 in 20 operating facilities, including rendering plants, pet food product plants, grease processing plants and transfer stations located in Pennsylvania, Maryland, Virginia, North Carolina, South Carolina, Tennessee, West Virginia, Texas, Oklahoma, and New Mexico. "Valley Proteins is an exceptional company led by a strong management team," said American Capital Principal Jeff MacDowell. "We are delighted to have been able to support its growth." For more information about the Valley Proteins transaction, go to: http://www.acas.com/our_portfolio/companies/company.cfm?p_comp=142 Since its August 1997 IPO through first quarter 2005, American Capital has earned a 16% compounded annual return on 93 exits and prepayments of senior debt, subordinated debt and equity investments, totaling $1.5 billion of invested capital, including interest payments, dividends and fees on these investments. These exits and prepayments represent 29% of all amounts invested by American Capital since its August 1997 IPO. Proceeds from these exits and prepayments exceeded the associated prior quarter valuation of the investments by $41 million in aggregate, or 4%. Eighteen percent of these exits and prepayments were from portfolio companies that had at one time been either a loan grade 1 or 2 in American Capital's four point loan grading system, with 1 being the lowest loan grade. Since its IPO through the fourth quarter of 2004, $45 million of American Capital's PIK interest and dividends and accreted OID have been repaid, representing 23% of all PIK and OID. For a chart detailing American Capital capital gains and losses as of the end of the fourth quarter of 2004, go to: http://www.acas.com/investor_relations/capital_gains.cfm. For a chart listing American Capital's exited portfolio companies go to: http://www.acas.com/our_portfolio/exited_companies.cfm. ABOUT AMERICAN CAPITAL American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $5.2 billion. American Capital is an investor in and sponsor of management and employee buyouts, invests in private equity buyouts, and provides capital directly to private and small public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations. As of April 29, 2005, American Capital shareholders have enjoyed a total return of 323% since the Company's IPO -- an annualized return of 21%, assuming reinvestment of dividends. American Capital has paid a total of $708 million in dividends and paid $16.76 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 at http://www.americancapital.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 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. DATASOURCE: American Capital Strategies Ltd. CONTACT: Tom McHale, Vice President, Finance and Investor Relations, +1-301-951-6122, or Brian Maney, Director, Corporate Communications, +1-301-951-6122, both of American Capital Strategies Ltd. Web site: http://www.americancapital.com/

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