ACAS American Capital, Ltd.

American Capital Invests $21 Million in BPWest Announces Expansion of Investment Activities in Energy Sector BETHESDA, Md., July 21 /PRNewswire-FirstCall/ -- American Capital Strategies Ltd. (NASDAQ:ACAS) announced today it has invested $21 million in BPWest Inc., an entity formed to acquire Jordan Drilling Fluids Inc., parent company of Anchor Drilling Fluids USA Inc. Anchor is a leading provider of drilling fluid products and services for oil and gas drilling. American Capital's investment takes the form of a senior term B loan, senior subordinated debt and preferred and common equity. PNC Business Credit is providing a revolving credit facility and a senior term A loan. Post close, American Capital owns approximately 69% of Anchor Drilling Fluids, on a fully diluted basis. "We're pleased to add Anchor to our broadly diversified portfolio of leading middle market companies," said American Capital COO Ira Wagner. "Anchor is exactly the type of company in the energy sector we are looking to invest in: a leading company with strong cash flows as well as growth opportunities." American Capital also announced today its plans to expand its investment activities in the energy sector. "Over the past eight years, American Capital has invested in six energy related companies totaling $126 million. Now, American Capital is targeting $500 million of investment in the energy sector over the next three years," said American Capital Chairman, President and CEO Malon Wilkus. "We believe American Capital has developed the appropriate personnel and necessary portfolio diversification to support additional, systematic investments in the energy sector, which require specialized expertise and relationships. Our low cost capital and middle market investing expertise, including our ability to provide one-stop financing by funding senior debt, subordinated debt and equity, allows us to be highly competitive for energy investing opportunities. As American Capital grows, we are pleased to expand our business into a sector that currently comprises over 8.0% of both U.S. GDP and the market capitalization of the S&P 500." American Capital has invested over $2.5 billion in the last twelve months, over $1.3 billion year to date and $60 million quarter to date. For more information about American Capital's portfolio, go to http://www.acas.com/our_portfolio/our_portfolio.cfm. "Anchor has a strong niche position in its targeted geographical regions. In addition, Anchor's long-standing relationships and experienced management team, led by Robert West and Phil West, will allow it to capitalize on the rapidly expanding drilling sector as well as realize other significant growth opportunities," said American Capital Principal Kevin Kuykendall. "I am very excited about American Capital's energy investing initiative. We have expanded our energy related investment opportunities and expect this deal flow to increase markedly as investment professionals and energy firms alike become aware of American Capital's dedication to the sector, which is evidenced by our recent investment in Anchor, among other things. Our targeted investment size will continue to be $10 million to $150 million. We seek opportunities across all segments of the energy sector, including equipment manufacturing, production, transportation, distribution, and services in oil, gas and power." Founded in 1984, Anchor Drilling Fluids is a leading provider of drilling fluid products and services for oil and gas drilling in the Rockies, the Mid- Continent and the Permian Basin. Drilling fluids are utilized to control formation pressures, remove cuttings, and cool and lubricate the drillbit. Anchor's products include weight materials and clays, thinners, fluid loss control agents, oil mud products, lost circulation materials, chemicals and specialty products and corrosion control products. The Company also provides engineering, trucking and rental equipment services. Anchor is headquartered in Tulsa, OK and has operating facilities in Oklahoma, Wyoming, Colorado, Texas, Montana and Utah. "American Capital is just the right fit for BPWest and Anchor," said BPWest CEO Robert West. "They are the best investment partner we could have as we grow and build on Anchor's history of quality, customized drilling fluid products and services." American Capital has invested in six energy related portfolio companies, totaling $126 million over the past eight years. In addition to BPWest, American Capital has invested $10 million in Consolidated Utility Services, a combination of two regionally focused utility locating service providers; $16 million in Corrpro Companies Inc., the leading single-source solution provider of corrosion protection related services, systems, equipment and materials for use in oil and gas pipelines and electric power equipment; and $45 million in Imaging and Sensing Technology Corporation, a leading designer and assembler of equipment for use in nuclear power plants. Past American Capital energy related investments include $11 million in BIW Connector Systems, a supplier of electrical connectors and cable assemblies for use in harsh environments to industrial, military, and commercial markets; and $23 million in Lubricating Specialties Co., the largest independent manufacturer, blender, and marketer of grease and lubricants on the West Coast. For more information about American Capital's portfolio, go to http://www.acas.com/our_portfolio/our_portfolio.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 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: Kevin Kuykendall, Principal, +1-214-273-6634, 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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