BETHESDA, Md., Oct. 6 /PRNewswire/ -- American Capital (Nasdaq:ACAS) announced today $18 million of investment and financial commitments to fund the consolidation of the businesses of Wilderness Systems, Inc., the third largest U.S. manufacturer of kayaks, and Mad River Canoe, Inc., the second largest U.S. manufacturer of canoes. A newly created company, Confluence Holdings Corp. will operate the two businesses separately, retaining their well-established brands. American Capital completed the financing on September 30, 1998 and Confluence Holdings completed the business consolidation on October 5, 1998. Westbury Capital Partners, L.P. of Westbury, Long Island served as the lead equity investor. Additional equity sponsors included principals of Lochridge & Company and executives from Mad River Canoe and Wilderness Systems.
Wilderness Systems pioneered the development of the touring and recreational segments of the kayak market. The company continues to be innovative in its designs and development of kayaks featuring composite construction techniques and advanced combinations of materials. Today, Wilderness Systems currently produces more composite kayak designs than any other kayak manufacturer in the United States.
Mad River Canoe, Inc. currently offers canoes in 24 models in four different materials. Their award-winning designs and materials serve the touring, tripping and whitewater market segments.
The consolidation strategy will increase and enhance product development efforts, broaden exposure of both companies' products through the combined distribution system, and expand promotions and merchandising.
``Wilderness Systems has a very strong field-based sales organization. When added to Mad River Canoe's high level of service, the mix will allow both companies to expand the markets for their quality products. This consolidation will create a dominant role for the new company in the paddle sports industry,'' said American Capital Principal John Freal.
``Our two companies paddling in tandem will make us a stronger company,'' said Andy Zimmerman, co-founder of Wilderness and CEO of Confluence. ``We each started our companies as paddling enthusiasts looking to build a better boat and that quest for excellence still drives both companies today. It's a great fit. We are excited about the synergy between the two companies.''
``In planning for Mad River Canoe's growth, I wanted to find a paddle sports partner with a non-competing product line that shared Mad River Canoe's commitment to quality, service and fun,'' explained Kay Henry, founder of Mad River Canoe. ``The joining of these two companies is just what we are looking for. We look forward to sharing our ideas, passion and products with the growing number of paddle sport enthusiasts.''
Malon Wilkus, President and CEO of American Capital said, ``This transaction demonstrates American Capital's flexibility in financing. We moved quickly to meet the borrower's needs, including bridging the revolving credit facility to accelerate the closing. Mad River Canoe and Wilderness Systems are two leaders in their respective markets, and combined, will form a powerful company in an exciting industry.''
American Capital is a buyout and specialty finance company with capital resources exceeding $150 million. American Capital invests $1 to $20 million in the form of senior debt, subordinated debt and equity to middle market companies in need of capital for growth, acquisitions, employee buyouts, management buyouts, liquidity and restructurings. Companies interested in learning more about American Capital and its unique and flexible financing should contact John Hoffmire, Vice President of Sales and Marketing, at 781-862-4447 or visit American Capital's Web site.
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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 or national economic conditions, or changes in the conditions of the industries in which American Capital has made investments.
