NEWS

by Maureen Flanagan

The Case Logic Group, a leading designer and marketer of storage and organizational solutions and accessories for the audio, computer, photo/video, DVD and automotive markets, has a bright future ahead as an independent company. Since its founding in 1984, Case Logic has grown substantially, expanding product lines, geographic service areas and customers, and diversifying its business mix to create a broad platform for future growth. From its headquarters in Longmont, Colorado, Case Logic has developed global operations with offices in Hong Kong, Europe, and Canada. The company has built a reputation for product quality, functionality, innovation and customer service, positioning Case Logic at the forefront of its markets throughout the world.

Since 1991 Case Logic was owned by Hagemeyer NV. Hagemeyer sold Case Logic on August 24, 2000 to KRG Capital Partners, LLC, a private equity investment firm specializing in buying well-run middle market companies, and growing them through organic growth and add-on acquisitions. In support of this acquisition, American Capital (Nasdaq: ACAS) provided $19.625 million of subordinated debt.

"As an independent company, we are committed to maximizing the Case Logic brand by providing exceptional value to our worldwide customers," said the company's President, J. Peter K. Storz. "We continually strive to improve and enhance our products and services in all areas of our businesses. This focus will continue to drive solid growth and profitable opportunities now and in the future for Case Logic, its employees, and its business partners."

Case Logic is a recognized industry innovator, adapting well to innovation and change as audio technologies have shifted from cassette tapes to CDs to DVDs and MP-3 products. From its first cassette carrier introduced in 1984, the company has led the market in new and functional products - Case Logic, in fact, holds 14 patents in the United States and major international countries and has 37 patent applications in process. It sells to retailers such as electronic superstores, specialty retailers, and mass merchants, as well as to Original Equipment Manufacturers (OEMs).

In the audio storage market, Case Logic is a market leader. The company designs and sells a wide range of CD-related products including CD wallets and storage cases, MiniDisc cases, MP-3 digital music player cases and cassette tape cases. The company has also become a solid competitor in the computer accessory products market. Case Logic's notebook computer cases and packs, CD-ROM wallets and storage cases, ergonomic Gel-eez� wrist rests and mouse pads have kept pace with industry trends as hardware and software accessories have become smaller, smarter, more portable and wireless.

Case Logic also has captured a significant presence in the photo/video products market. Since 1997, the company has offered a broad range of carrying cases for digital cameras, point and shoot 35-mm cameras and camcorders.

In the spring of 1999, Case Logic addressed the storage and organizational needs of the rapidly growing DVD market, pioneering a line of products such as DVD storage albums and trays and portable DVD player cases. After only one year, the company established a leading position in this market.

Also in 1999, the company entered the automotive category. Responding to the increasing amount of time Americans spend in their cars and growing need for convenience products, Case Logic offers a number of different product lines for the automobile, including CD storage devices made particularly for car and general organizers for back seats, front seats, under seats, trunks and visors.

"American Capital is pleased to support this innovative, profitable company as it becomes an independent entity," said Mark Schindel, American Capital Principal. "Case Logic is in a great position to become a market leader in its many different business segments. The company's strong management team, commitment to innovation, adaptability to market changes and strong sense of consumer needs promise to put Case Logic at the forefront of accessory products for consumer technologies of the future. We are excited to be part of Case Logic's growth and development," Schindel said.

For the Case Logic acquisition, American Capital provided $15,125,000 in senior subordinated debt and $4,500,000 junior subordinated debt for a total financing package of $19,625,000. Albion Alliance and Reliastar also provided subdebt financing, and GE Capital and Chase Manhattan provided senior debt and a revolving line of credit.

American Capital invests in middle-market companies in need of capital for management or employee buyouts, growth, acquisitions, liquidity or restructuring.

American Capital's investment in Case Logic is an example of its partnership with companies that demonstrate an ability to innovate and stand out in their markets. This is evident in Case Logic's product development efforts, which have been critical to the company's growth and profitability. Soliciting input from customers, consumers and suppliers, the company identifies emerging market needs and opportunities for product enhancements. It uses in-house design and sampling capabilities to respond rapidly to consumer needs and bring new product concepts to the market. During 1999, more than 80 of Case Logic's products (approximately 40%) were either newly introduced or refreshed.

Case Logic has also made great strides selling to OEMs for distribution under the Case Logic brand name and their own labels. These products -- cases for notebook computers, camcorders and digital cameras -- represent large potential markets and are sold to a number of prominent international companies.

Case Logic operates in worldwide wholesale markets estimated at $2.20 billion to $2.85 billion. In 2000, consumers spent an estimated $84 billion on electronics equipment, fueling demand for organizational and storage solutions and accessories for the market. Case Logic's products, designed for today's mobile consumer lifestyle needs, are well positioned to capture an even bigger segment of this market. Current and developing formats for recordable media will likely continue to drive the sales of the company's storage products. Digital audio CDs, CD-ROMs, recordable CDs (CD-Rs) and rewritable CDs (CD-RWs) are now widely used, and newer technologies, such as Super Audio CD (SACD) and DVD-audio are fast developing. MiniDiscs, which are popular in Japan and Europe, and the MP-3 player, enabling consumers to download music from the Internet, are also gaining ground. DVD technology is also poised to make major inroads in the CD, video and audio markets.

In the computer market, laptops are the fastest growing segment of the PC market, boding well for the company's line of laptop accessories. In the video/photo segment of the market, digital cameras - where Case Logic has built a strong presence -- are on the verge of a mass market explosion. And, as technology assumes an increasingly important role in automobiles, the auto accessories market is taking off. Case Logic's full line of accessories provides storage and convenience for millions of consumers who use their cars for commuting, working, or as entertainment centers. Demographic trends, too, should increase demand for the company's products. In a "time-starved" society, people are traveling more, which will likely increase demand for portable products that add to everyday convenience.

A key factor in Case Logic's success is its strong brand name. Case Logic's products are backed by a lifetime warranty in addition to a high level of customer service and support, superior product quality, designs and product packaging. Case Logic customers, in fact, rate the company's products and service at the highest levels. Indeed, recent distinctions include being named the National Association of Recording Merchandisers (NARM) "Supplier of the Year" in 1998, 1999, and 2000