FOR IMMEDIATE RELEASE:
February 7, 2005

Contact
Jon Isaacson, Principal (301) 951-6122
Brian Maney, Director, Corporate Communications (301) 951-6122

BEACON HOSPICE SHINES BRIGHTLY

By Maureen Flanagan

Beacon Hospice, based in Charlestown, MA, is a leading provider of hospice services in New England. Founded in 1995, Beacon was acquired in 1999 by a private investor and expanded rapidly. Under the leadership of CEO Betty Brennan, Beacon grew from a single Boston location to ten programs in Massachusetts, Rhode Island, Maine and New Hampshire. Today, favorable demographics, a New England market ripe for expansion and a growing awareness and acceptance of hospice care add up to a strong foundation for further growth.

In a February 1, 2005 buyout, Beacon Hospice was acquired by Boston based investment firm, Halpern, Denny & Co (HD&Co). In support of the buyout, American Capital Strategies, Ltd. (Nasdaq: ACAS) provided a $24 million financing package consisting of a revolving credit facility, senior financing and subordinated debt.

Hospice care is used by patients who have been diagnosed with a terminal illness and have chosen, with the assistance of their doctors and families, to receive pain management (palliative care), counseling and only necessary rather than curative care.

Beacon's services are tailored to the individual needs of patients and their families. Patients are referred by a long-term care facility, physician, or hospital and must be certified as eligible for hospice care before Beacon can assume responsibility. Upon certification, a course of treatment is developed in consultation with the patient and the family, with an emphasis on education about the type of care to be administered. An interdisciplinary team of providers is available as needed, including physicians, nurses, home health aids, therapists, social workers, clergy and volunteers. Different levels of care are provided, depending on the nature and severity of the illness. Almost 90% of care is administered at long-term care facilities, nursing homes or other institutions. The remainder is provided in the patient's home.

One of Beacon's key strengths is its ability to provide care that meets the highest standards of professionalism and quality. This has enabled Beacon to build relationships that enhance its presence in its local markets and increase referrals. It has also enabled the company to enter into contracts with long-term care and assisted living facilities. As Beacon's reputation grows, institutions and physicians refer more patients, often at an earlier stage of their terminal illness, which results in longer stays. This, combined with cost-effective services that do not diminish the quality of patient care and a favorable patient mix, results in greater profitability for the company.

In the February 2005 transaction, alongside American Capital's financing, HD&Co and CEO Betty Brennan made equity investments.

Since 1997 American Capital has invested $4.7 billion in the middle market and currently manages a portfolio of more than 100 companies, including several providers of healthcare services. For more information about American Capital's portfolio click here.

Hospice care accounts for an estimated $5 billion to $6 billion in revenue, with Medicare providing about $4 billion of the total. The market is driven by the rapidly increasing number of people 65 and over - the principal users of hospice care - and the sound economic sense of using hospice for end-of life-care. In addition, hospice care has evolved to include a broader range of the terminally ill, thus increasing the size of the potential patient base.

Hospice care continues to gain wider acceptance. Recent growth in the New England market is expected to continue for the foreseeable future. Supported by its high level of care, Beacon has implemented focused sales and marketing programs to increase awareness of hospice, boost census in existing programs and establish growth in new locations. The company's initiatives include programs targeted to multicultural urban environments and religious organizations, educational programs for long-term care facilities, palliative care consulting services to non-eligible hospice patients, and disease progression education.

These programs will support the company's growth as it opens new locations throughout New England. With its experienced leadership, strong referral network and quality care, Beacon shines a bright light for the growing number of patients and their families who select hospice services for end-of-life care.