ACAS American Capital, Ltd.

American Capital Receives Total Proceeds of $100 Million From Three Exits BETHESDA, Md., July 20 /PRNewswire-FirstCall/ -- American Capital Strategies Ltd. (NASDAQ:ACAS) announced today that it has received total proceeds of $100 million from exits of three portfolio companies, realizing a total gain of $24 million. CIVCO Holding Inc. American Capital has realized a gain of $12 million in the second quarter of 2005 from the sale of its portfolio company CIVCO Holding Inc., receiving total proceeds of $43 million. Previously in the fourth quarter of 2004, CIVCO redeemed American Capital's redeemable preferred stock for an additional realized gain of $2 million. Over the life of its investment in CIVCO, American Capital has realized a total gain of $14 million, earning a 55% compounded annual rate of return on its investment. The 55% return includes the interest, dividends, fees and realized gain earned over the life of American Capital's investment in the company. The amount realized by American Capital was more than the first quarter 2005 valuation of the investment by $6 million, or 16%. In July 2003, American Capital invested $15 million in CIVCO Holding, a company formed by KRG Capital Partners LLC to take private Colorado MEDTech, a global specialist in the design, manufacture and marketing of specialized medical products for ultrasound and minimally invasive surgical equipment and procedures. American Capital's investment took the form of senior subordinated debt with warrants, redeemable preferred stock and common stock. In October 2004, American Capital invested an additional $15 million in junior subordinated debt with warrants to support KRG's recapitalization of CIVCO. For more information about CIVCO go to http://www.acas.com/our_portfolio/companies/company.cfm?p_comp=106. Automatic Bar Controls Inc. American Capital has realized a gain of $12 million in the second quarter of 2005 from the sale of its portfolio company Automatic Bar Controls Inc. American Capital received total proceeds of $44 million upon the exit, earning a 25% compounded annual rate of return on its investment. The 25% return includes the interest, fees and realized gain earned over the life of American Capital's investment in the company. The amount realized by American Capital was less than the first quarter 2005 valuation of the investment by $2 million, or 5%. In July 2002, American Capital completed the buyout of Automatic Bar Controls Inc., the dominant manufacturer and supplier of hand-held beverage dispensers for the food service industry. In a one-stop shop financing transaction, American Capital invested $35.5 million in the form of a senior term loan, senior and junior subordinated notes and common equity. For more information about Automatic Bar Controls go to http://www.acas.com/our_portfolio/companies/company.cfm?p_comp=65. Interior Specialists Inc. American Capital has received full repayment of its senior subordinated debt investment in Interior Specialists Inc. in the second quarter of 2005. American Capital received $13 million upon the exit, earning a 22% compounded annual rate of return on its investment. The 22% return includes the interest and fees earned over the life of American Capital's investment in the company. In April 2004, American Capital invested $13 million in the senior subordinated debt of Interior Specialists Inc., a leading provider of outsourced interior design and installation services for homebuilders in the Southwestern U.S. The investment supported the acquisition of Interior Specialists by KRG Capital. For more information about Interior Specialists, go to http://www.acas.com/our_portfolio/companies/company.cfm?p_comp=129. 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 realized gains as of the end of the first quarter of 2005 go to http://www.acas.com/investor_relations/realized_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 $5.4 billion. American Capital invests in and sponsors 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 June 30, 2005, American Capital shareholders have enjoyed a total return of 388% since the Company's IPO -- an annualized return of 22%, assuming reinvestment of dividends. American Capital has paid a total of $782 million in dividends and paid $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. 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, or Brian Maney, Director, Corporate Communications of American Capital Strategies Ltd., +1-301-951-6122 Web site: http://www.americancapital.com/

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