BETHESDA, Md., -- American Capital Strategies, Ltd. (Nasdaq:ACAS) announced today its financing of the acquisition of the business of J.A.G. Industries, Inc. by JAG Acquisition, Inc. ("JAG"). American Capital purchased from JAG $4,000,000 in Senior and Subordinated Notes with warrants.
JAG is a unique firm for its size, having two primary lines of business: fabrication of precision metal components used by OEM's in high precision, high cost products as well as in production lines, and the manufacture of tablets and pills for non-human consumption and testing applications. The company is based in Baltimore, Maryland and its business dates to 1960. It intends to establish an employee stock ownership plan ("ESOP") so that JAG employees will participate in the upside of the company.
John Freal, Principal of American Capital, said: "This transaction clearly demonstrates the particular capabilities of ACAS. We were able to fund all of the senior and subordinated debt for our client, including a working capital loan that will be replaced by a traditional line of credit after closing. In addition, we responded rapidly to JAG's need for a strong financial partner, after an initial equity source dropped out two weeks prior to a closing they had previously scheduled for last December."
ACAS is backing a seasoned manufacturing executive, Gene Stluka, who is replacing the selling shareholders. Mr. Stluka has experience leading a 600 employee manufacturing operation at General Electric. "I am excited about the potential to expand this business and look forward to significant growth in both of JAG's product lines. With the growth financing provided by ACAS we can pursue many opportunities that have in the past been ignored," says Mr. Stluka.
With this transaction, American Capital has invested a total of $24.6 million since its initial public offering in August of 1997. "Having completed our first financing of 1998, we believe that this is an early start on a busy, exciting year for ACAS," said Malon Wilkus, President of American Capital Strategies.
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