FOR IMMEDIATE RELEASE:
August 19, 2005

Contact
Todd Wilson, Principal (212) 213-2009
Brian Marshall, Vice President (212) 213-2009
Brian Maney, Director, Corporate Communications (301) 951-6122

AMERICAN CAPITAL INVESTS $117 MILLION IN BUSHNELL PERFORMANCE OPTICS

Bethesda, MD - August 19, 2005 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has invested $117 million in the senior and junior subordinated debt of Bushnell Performance Optics, a leading designer and marketer of a diversified portfolio of branded, high-performance sport optics and premium eyewear products targeting outdoor and sport enthusiasts. American Capital's investment supports Bushnell's acquisition of Michaels of Oregon Co., a leading manufacturer and marketer of accessories for the hunting, shooting sports and law enforcement industries. The combined entity will now operate as Bushnell Outdoor Products. Antares Capital Corporation leads a syndicate providing a senior credit facility. Wind Point Partners is the majority owner of Bushnell.

"We are pleased to be investing with Wind Point Partners for the second time and supporting the acquisition of Michaels by Bushnell," said American Capital Chief Operating Officer Ira Wagner. "Bushnell has a rich brand history and maintains the number one or number two brand within each of the sport optics, outdoor technology, and hunting and shooting accessory categories in which it competes."

American Capital has invested over $2.8 billion in the last twelve months, $1.9 billion year to date and nearly $600 million quarter to date. For more information about American Capital's portfolio click here.

"Bushnell's extraordinary brand equity constitutes a distinct competitive advantage and barrier to entry while also serving as a contributor to the Company's strong margins," said American Capital Principal Todd Wilson. "Bushnell supports and cultivates its brands with substantial advertising and sophisticated marketing campaigns and a commitment to continuous product innovation and improvement. The Company maintains strong, long-standing customer relationships across multiple channels of trade and across several countries."

"The acquisition of Michaels provides Bushnell further product diversification, additional brands with leading market positions in the hunting and shooting sports segment, and increased penetration in key distribution channels. Further, both companies have a history of successful acquisition and integration," said American Capital Vice President Brian Marshall.

Based in Overland Park, KS, Bushnell was founded by David Bushnell in 1948 as a provider of high-quality, affordably priced sport optics to specialized retailers. Today, the Company sells a wide range of products, including binoculars, sunglasses, riflescopes, telescopes, laser rangefinders, night vision scopes, safety goggles and ski goggles, under its leading Bushnell, Bollé, Serengeti and Tasco brand names. Bushnell sells to an international base of more than 10,000 customers across multiple distribution channels including mass merchants, optical chains, sporting goods stores, catalog retailers and specialty optical retailers. Key customers include Wal-Mart, Cabela's, Gander Mountain, Bass Pro Shops, Dick's Sporting Goods and The Sports Authority. The acquisition of Michaels of Oregon broadens the Bushnell product offering in the hunting, shooting sports and law enforcement markets with the addition of the well-respected Uncle Mike's, Hoppe's, Butler Creek, Stoney Point, and Blackwater Gear brands. The combined company will employ more than 600 people. Pictured here is the Instant Replay digital imaging binocular, which takes digital pictures through the actual binocular lens at the same magnification and is essential gear for coaches and scouts, birders and wildlife observers, big-game hunters and armchair quarterbacks everywhere.

"We are pleased to be working again with American Capital. They quickly understood our investment thesis and provided the certainty and speed of closing, which was critical to executing this transaction successfully," said Wind Point Managing Director Rich Kracum. "This transaction enables us to continue to augment Bushnell's position in the sporting goods and outdoor equipment markets and to take advantage of several tangible growth opportunities."

For more information about Bushnell's extensive product offering of leading brands click here.

ABOUT AMERICAN CAPITAL

American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $5.4 billion. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, and provides capital directly to private and small public companies. American Capital provides up to $250 million of senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations.

As of July 31, 2005, American Capital shareholders have enjoyed a total return of 409% since the Company's IPO - an annualized return of 23%, assuming reinvestment of dividends. American Capital has paid a total of $787 million in dividends and paid or declared $18.29 dividends per share since its August 1997 IPO at $15 per share.

Companies interested in learning more about American Capital's flexible financing should contact Mark Opel, Senior Vice President, Business Development, at (800) 248-9340, or visit our website.

ABOUT WIND POINT

Wind Point is a private equity investment firm with offices in Chicago, Illinois and Southfield, Michigan that manages over $1 billion in capital. Wind Point has invested in more than 80 companies since 1984. In addition to Bushnell, its portfolio of investments include: U.S. Security Associates, a provider of security guard services; VICORP Restaurants, which operates two leading family-style restaurant brands, Village Inn and Bakers Square, encompassing 371 restaurants in 25 states; and Nonni's, a leading manufacturer and marketer of specialty, premium baked goods, which include biscotti, bagel chips, panetini and pita chips sold under the Nonni's, New York Style and Brownstone brand names.

Performance data quoted above represents past performance of American Capital. Past performance does not guarantee future results and the investment return and principal value of an investment in American Capital will likely fluctuate. Consequently, an investor's shares, when sold, may be worth more or less than their original cost. Additionally, American Capital's current performance may be lower or higher than the performance data quoted above.

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, national or international economic conditions, or changes in the conditions of the industries in which American Capital has made investments.

This announcement is neither an offer to sell nor a solicitation to buy securities.
This announcement appears as a matter of record only.