Bethesda, MD - July 14, 2003 - American Capital Strategies Ltd. (Nasdaq:ACAS)announced today it has invested $23 million in Corporate Benefit Services of America Inc. ("CBSA"), a leading full-service third party manager and administrator of employee healthcare benefit plans. American Capital's investment takes the form of a last out Term C senior loan and senior subordinated debt with warrants and supports the buyout of CBSA by Churchill Equity and ESOP Capital Partners from Code Hennessy & Simmons LLC. CBSA management is jointly investing in common equity.
Founded in 1971, Minneapolis, MN headquartered Corporate Benefit Services of America provides customized self-funded and fully-funded healthcare benefit plans and medical management services to small to mid-sized companies throughout the United States. The company's services include selling, designing and implementing custom healthcare benefit plans, processing claims, assisting in procuring stop loss reinsurance and managing the enrollment and payment processes. The company has regional offices in Minnesota, Florida, Colorado, Texas, Iowa and Idaho, with over 500 highly specialized employees and recorded 2002 annual sales of approximately $45 million.
"Corporate Benefit Services of America is a strong company in a highly fragmented industry," said American Capital COO Ira Wagner. "We look forward to working with Churchill Equity, a strong sponsor with an ability to assist companies in strategic growth, and with the CBSA management team, who have extensive experience in the healthcare benefits sector."
American Capital has invested more than $700 million in the last twelve months.
For more information about American Capital's portfolio click here.
"American Capital is backing a highly experienced management team, one focused on staying ahead of its competition through outstanding compliance procedures, advanced technology and new product development," said American Capital Principal and Managing Director Jeri J. Harman. "A top third party administrator, CBSA has strategically differentiated itself as a one-stop-shop, offering a full-range of healthcare benefit services which enable it to meet the demands of the growing healthcare market. CBSA's well-established market position, breadth of services and robust proprietary claims processing system are competitive advantages that place it in an excellent position to capitalize on the increasing numbers of employers who seek to lower healthcare costs by outsourcing their healthcare administrative needs."
Click here for more information about Corporate Benefit Services of America's breadth of custom designed healthcare benefits services.
"American Capital provided the necessary cost effective capital to complete this transaction," said Churchill Managing Partner F. Clayton Miller. "Together with CBSA management's extensive industry expertise and American Capital as our investment partner, we can provide CBSA with the support to enable it to successfully expand through new product innovations and enhanced services."
As of June 30, 2003, American Capital shareholders have enjoyed a total return of 177% since the Company's IPO -- an annualized return of 19%, assuming reinvestment of dividends. American Capital has paid a total of $11.68 per share in dividends since its August 1997 IPO at $15 per share.
American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $1.8 billion. American Capital is an equity partner in management and employee buyouts; invests in private equity sponsored buyouts, and provides capital directly to private and small public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations.
Companies interested in learning more about American Capital's flexible financing 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.
