ACAS American Capital, Ltd.

American Capital Invests $13 Million in Acquisition by Montana Silversmiths BETHESDA, Md., June 29 /PRNewswire-FirstCall/ -- American Capital Strategies Ltd. (NASDAQ:ACAS) announced today it has invested an additional $13 million in its portfolio company Montana Silversmiths Inc. to support its acquisition of Big Sky Carvers LLC ("BSC"), a manufacturer and distributor of outdoor and lodge-themed woodcarvings, home accents and collectibles. Montana is a leading designer, manufacturer and distributor of accessories, jewelry and lifestyle products for the western industry. American Capital's investment takes the form of a senior term loan, senior subordinated debt and LLC membership units. American Capital has also committed additional debt financing to support anticipated growth and for other corporate purposes. Thompson Street Capital Partners is the majority owner. BSC management is rolling over their equity investment. "Since our original investment in October 2004, Montana has exceeded our financial expectations and demonstrated attractive growth," said American Capital COO Ira Wagner. "We are pleased to again provide a one-stop debt solution to Thompson Street Capital for this acquisition as they and the Montana management team build this leading consumer products company." American Capital has invested over $2.5 billion in the last twelve months, over $1.2 billion year to date and over $870 million quarter to date. For more information about American Capital's portfolio, go to http://www.acas.com/our_portfolio/our_portfolio.cfm. "This is an exciting opportunity for us to support the joining of two strong performing, complementary businesses. Montana is already ahead of our planned performance and BSC has also performed extremely well, in part due to its core base of customers," said American Capital Principal Jon Isaacson. "Montana's acquisition of BSC is an attractive move for the Company and we expect it to result in significant opportunities for customer introductions, cross-selling and operational synergies. BSC already designs products for Montana's Lifestyles line, and Montana will be able to continue to leverage BSC's design and sourcing expertise. In addition, we are confident in the leadership of Thompson Street Capital and Montana's management team. They have substantial acquisition, integration and operating experience." Founded in 1980, Manhattan, MT-based Big Sky Carvers offers lodge and outdoor-themed wood and plastic sculptures, ornaments, home accents and other collectibles. BSC's products are sold through independent retailers, large retail outlets and mail-order catalogs. In addition, the Company sells private-labeled products to conservation and fundraising organizations, which use the products as giveaways and prizes. BSC also currently provides design and sourcing services for Montana's Lifestyles brand. BSC customers include Ducks Unlimited, Cabela's, Orvis and L.L. Bean. The Company has approximately 1,500 SKUs and designs and launches more than 400 products annually. American Capital first invested $26 million in Montana Silversmiths in October 2004, supporting Thompson Street Capital's and management's acquisition. American Capital's investment took the form of a senior term loan, senior subordinated debt and a revolving credit facility. Founded in 1973, Columbus, MT-headquartered Montana holds one of the most recognizable brand names in the western accessories market. The Company's wide selection of over 10,000 SKUs of premium and aesthetically appealing products include buckles, jewelry, watches, accent trim and home decor sold under three brand names: Montana Silversmiths, Montana Lifestyles and Reflexions. Customers include western specialty stores such as Corral West, Sheplers, Cavender's, Boot Barn and Western Warehouse. "Our relationship with American Capital, its familiarity with Montana's business, management team and industry, and its ability to provide the one- stop debt financing we required made them a natural investment partner for the BSC acquisition," said Thompson Street Capital Principal Pete Villhard. "American Capital dedicated not only the financial resources we needed for the transaction, but they also worked quickly and efficiently to make sure we closed the deal on schedule." For more information about Montana's premium western-style accessories, go to http://www.acas.com/our_portfolio/companies/company.cfm?p_comp=167. ABOUT AMERICAN CAPITAL American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $5.4 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 May 31, 2005, American Capital shareholders have enjoyed a total return of 364% since the Company's IPO -- an annualized return of 22%, assuming reinvestment of dividends. American Capital outperformed 86%, 72%, 85% and 91% of all U.S. public companies with a current market capitalization greater than $1 billion in the one-year, three-years, five-years and the approximately seven and a half years since the IPO, in each case ending May 31, 2005. American Capital has paid a total of $717 million in dividends and paid or declared $17.51 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/. ABOUT THOMPSON STREET CAPITAL PARTNERS Thompson Street Capital Partners is a $145 million private equity fund headquartered in St. Louis, MO. The firm makes investments in leveraged acquisitions, recapitalizations and going-private transactions in middle- market companies in the United States and Canada. Its current portfolio includes investments in nine companies across a range of industries, including HVAC control products distribution, specialty packaging, upholstered furniture, disposable food service products and radio transmission equipment. 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: Jon Isaacson, Principal, +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/ http://www.acas.com/our_portfolio/our_portfolio.cfm

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