NEWS

Roland Cline, Principal and Managing Director (415) 591-0120
Brian Maney, Director, Corporate Communications (301) 951-6122

Bethesda, MD - July 19, 2002 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that a company controlled by it has completed the buyout of Automatic Bar Controls Inc., the dominant manufacturer and supplier of hand-held beverage dispensers for the food service industry. In a one-stop shop financing transaction, American Capital invested $35.5 million in the form of a senior term loan, senior and junior subordinated notes and common equity. LaSalle Bank is financing a revolving loan facility. ABC management is rolling over the majority of its equity ownership.

"American Capital concluded the first half of 2002 with new investments totaling approximately $250 million, consistent with our projection for the entire year and accomplished in a rapidly changing transaction environment," said Chairman, President and CEO Malon Wilkus. "These investments include six buyouts and five mezzanine transactions with leading private equity firms. Automatic Bar Controls, American Capital's first investment of the third quarter, continues our excellent record of sponsoring control buyouts of market leading niche manufacturers."

For more information about American Capital's portfolio click here.

"This is a great company that dominates the U.S. and U.K. flexible hose dispenser market because of superior products and high commitment to customer service," said American Capital Principal and Managing Director Roland Cline. "Management's focus on quality and the Company's unique manufacturing processes that result in virtually defect-free products are formidable barriers to entry for potential competitors. These competitive advantages, coupled with the company's deep, long-standing customer relationships and emerging new product pipeline, make this an exciting investment opportunity."

ABC's signature product is the Wunder-Bar hand-held beverage-dispensing gun, seen at left. The company has also developed and sells a wide range of food dispensing systems for condiments, heated cheese, oils, salad dressings, refrigerated and non-refrigerated toppings and pizza sauces. ABC has received a number of awards for outstanding customer service and product quality from such customers as The Coca-Cola Company, Pizza Hut, Inc. and Allen & Wright, makers of A&W Root Beer. The Vacaville, CA-based company, founded in 1971, employs approximately 150 people at its state of the art facility. "We chose American Capital to be our partner because of their long-term investment perspective and because they shared our vision of bringing new and innovative products to market for our customer base," said Richard A. Martindale, the company's president and CEO.

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 $9.64 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.