Bethesda, MD - March 1, 2002 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has invested $29 million to fund the acquisition of Hickson DanChem Inc., a specialty contract chemical manufacturer, from Arch Chemicals (NYSE: ARJ). The company will be called DanChem Technologies. Arch has sold DanChem subsequent to its purchase and integration of DanChem's parent, Hickson International. American Capital has funded a senior credit facility, subordinated notes with warrants, and common equity. DanChem management made a significant cash investment in the buyout.
"This is American Capital's second buyout in 2002 and our seventh in the last twelve months," said COO Ira Wagner. "This buyout reflects our expertise in niche manufacturing and the flexibility of our capital. It also speaks directly to our ability to find outstanding middle market companies, negotiate an appropriate transaction, and get to closing."
American Capital has invested approximately $400 million in middle market companies in the last twelve months, with approximately $200 million funding buyout transactions.
"DanChem's strong management team, diverse technical capabilities and extensive backlog form a solid foundation for both organic growth and acquisitions," said American Capital Principal David Ehrenfest Steinglass. "The company's reputation for producing a wide range of chemical products in compliance with exacting third party standards makes it a leader in custom chemical manufacturing. We expect to leverage the expertise of Bob Sharp, an American Capital operating principal with 25 years experience in the specialty chemicals industry. Bob will serve on the board of directors."
American Capital will own 75% of the Danville, VA based company on a fully diluted basis.
"American Capital was the ideal partner for this transaction," said DanChem President Joseph Acker. "Our increased flexibility as an independent company provides us with greater prospects for leveraging the opportunities of a fragmented marketplace."
For more information about DanChem click here.
American Capital is a publicly traded buyout and mezzanine fund with capital resources exceeding $1 billion. American Capital is an equity partner in management and employee buyouts; invests in debt and equity of companies led by private equity firms, and provides capital directly to private and small public companies. American Capital funds growth, acquisitions and recapitalizations. The Company has paid and declared $8.35 per share in dividends since going public in 1997.
Companies interested in learning more about American Capital's flexible financing and ability to provide senior debt, subordinated debt and equity should contact Mark Opel, Principal, at (800) 248-9340, or visit our website.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 or national economic conditions, or changes in the conditions of the industries in which American Capital has made investments.
