BETHESDA, Md., July 1 /PRNewswire/ -- American Capital Strategies, Ltd. (Nasdaq:ACAS) today announced that Specialty Transportation Services, Inc. (STS), has repaid $7.5 million of subordinated debt. The repayment by STS is part of a recapitalization of the company to strengthen the value of the retained equity interest. As a result of the repayment, American Capital recorded a gain of $550,000 from the realization of the unamortized loan discount. STS operates a national network of solid waste hauling services for both municipalities and commercial clients.
CFO John Erickson stated, "We have had a great week and a strong second quarter. We made several new investments in familiar industries such as the Tube City transaction, a metals industry company, and in new industries such as packaged gas. We made three add-on acquisition financings to further the plans of existing portfolio companies, and we increased our credit facility with First Union by $25 million, a sign of their continued confidence in our business plan."
American Capital's investments this quarter totaled $44 million, consisting of:
- A $16.5 million total commitment and investment in Tube City, a leading supplier of mill services and raw materials to the steel industry in the United States.
- A $10 million investment in subordinated debt with warrants of Erie County Plastics Corporation. Erie Plastics is a nationally recognized leader in the manufacture of custom injection molded plastic packaging components, serving some of the best known names in the consumer products industry including Procter & Gamble, Gillette, Wyeth Pharmaceuticals and Alcoa.
- A $7.5 million investment in senior subordinated debt at Aeriform Corporation. Aeriform, an employee-owned firm headquartered in Houston, is the largest independent distributor of packaged industrial and specialty gases in Texas.
- A $6.5 million add-on investment in Starcom Holdings,
- A $3.1 million add-on investment in ACAS portfolio company Confluence Holdings,
- A $0.5 add-on investment in ACAS portfolio company Auxi Health.
Each of these three add-on financings were to support excellent acquisitions.
Chief Operating Officer Adam Blumenthal commented, "The quarter ended with a bang. This is the second consecutive quarter that we have demonstrated our liquidity. The first came in the form of the sale of Four-S and now a realized gain from STS. We made an investment in an ESOP company and proved our flexibility in structuring large complex transactions."
For more information about American Capital's portfolio click here.
American Capital is a buyout and specialty finance company with capital resources exceeding $275 million. American Capital invests in senior debt, subordinated debt and equity in middle market companies in need of capital for growth, acquisitions, ESOP 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 (800) 248-9340 or visit its Web site at www.American-Capital.com or its shareholder site at www.ACASOnline.com.
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.
