Bethesda, MD - July 21, 2003 - American Capital Strategies Ltd. (Nasdaq:ACAS)announced today it has completed the buyout and recapitalization of its portfolio company, The New Piper Aircraft Inc. ("Piper"), by purchasing $57 million of Piper's senior debt for $34 million and providing a revolving loan facility. In addition, American Capital exchanged $22 million of the purchased senior debt for common equity in Piper. American Capital's original $20 million investment in subordinated debt is now a senior facility. American Capital now owns 94% of Piper's voting equity.
Affiliates of Exeter Capital Partners, a private equity firm and long time investor in Piper, made an additional common equity investment of approximately $1 million for 6% of the common equity as part of the recapitalization.
"While Piper has reduced its new airplane production as a result of the downturn in general aviation after September 11th, we believe Piper is an excellent, well-run company," said American Capital COO Ira Wagner. "With an iconic brand name in the general aviation industry and the most extensive product line, we are confident Piper will enjoy great success as the general aviation industry rebounds. Our investment in Piper is an example of our ability to step in as the equity sponsor of an existing portfolio company under the right circumstances."
American Capital has invested approximately $700 million in the past twelve months.
For more information about American Capital's portfolio click here.
"This is an exciting opportunity for American Capital to continue our relationship with Piper," said American Capital Senior Vice President and Managing Director Gordon O'Brien. "We are working with a strong CEO, an industry veteran and innovator, who oversees a well established worldwide dealer network selling an unmatched product offering to a remarkably loyal customer base. Piper's installed base of 100,000 aircraft worldwide feeds its large proprietary parts business, and its underlying intellectual property is protected by numerous Federal Aviation Administration Type Certificates that govern manufacture of its planes. Its exemplary track record of new product releases and strong pipeline of new products also bode well for its future. Furthermore, we believe this transaction enhances the value of our original investment."
American Capital first invested in Piper, headquartered in Vero Beach, FL, in May 1998. Over 60 years in operation, Piper employs nearly 700. Pictured here is the Meridian, the company's first single-engine turbine powered plane, introduced in 2000. Piper is the only general aviation manufacturer to offer a complete line of aircraft for every general aviation mission, from trainers and high-performance aircraft for personal and business use to turbine-powered business aircraft.
"We look forward to growing Piper and introducing new products," said Piper CEO Chuck Suma. "American Capital's dedication, support and expertise bring to Piper the necessary resources to excel as we meet market demands with new products. Now that commercial travel is more time consuming than ever, flying a Piper makes more sense than ever."
For more information about Piper's extensive line of high quality and performance aircraft click here.
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.
