FOR IMMEDIATE RELEASE:
December 6, 2005

Contact
Todd Wilson , Principal (212) 213-2009
Robert Klein, Managing Director (212) 213-2009
Brian Maney, Director, Corporate Communications (301) 951-6122

AMERICAN CAPITAL INVESTS $114 MILLION IN ONE STOP BUYOUT^™ OF DELSTAR TECHNOLOGIES

Bethesda, MD - December 6, 2005 - American Capital Strategies Ltd. (Nasdaq:ACAS) announced today it has invested $114 million in the One Stop Buyout^TM of DelStar Technologies Inc., a leading manufacturer of highly-engineered, thermoplastic nonwoven products used by OEMs in filtration, healthcare and industrial applications. American Capital's investment takes the form of senior term loans, senior subordinated debt and equity. American Capital is also providing a revolving credit facility. DelStar's management team and employees will retain an equity stake in the Company. Post close, American Capital owns approximately 83% of DelStar, on a fully diluted basis.

"We are pleased to announce our investment in DelStar, our 17th buyout in 2005," said American Capital Chief Operating Officer Ira Wagner. "American Capital's ability to provide the entire capital structure of a transaction and our staff of over 100 experienced investment professionals enable us to respond quickly to attractive investment opportunities in leading middle market companies, such as DelStar. We are supporting a stellar management team that has significantly grown the business, made two strategic add-on acquisitions and recently established a manufacturing presence in China."

American Capital has invested over $3.4 billion in the last twelve months, over $2.9 billion year to date and approximately $740 million quarter to date. These amounts do not include American Capital's unfunded equity commitment to its affiliate European Capital. For more information about American Capital's portfolio click here.

"DelStar is known for its excellent product quality, on-time delivery, strong research and development, high-level customization capabilities and broad product offering," said American Capital Principal Todd Wilson. "DelStar's proprietary manufacturing processes enable it to meet and address the customized and exacting quality specifications of its end-customers, thereby giving DelStar a defensible competitive advantage."

"DelStar's leading position will enable it to enjoy the benefits of favorable end-market dynamics driving market growth, including increasing safe drinking water and other environmental regulations; aging and inadequate water infrastructures; and demand for water filtration systems in developing nations such as China," said American Capital Managing Director Robert Klein.

Headquartered in Middletown, DE, DelStar Technologies is a leading manufacturer of highly-engineered and customized thermoplastic nonwoven products. The Company's product offering consists of approximately 4,000 SKUs across five product lines: Naltex, bi-planar extruded netting; Delnet, apertured films; Coretec, extruded cores and precision parts; DelPore meltblown media; and Stratex engineered composites. The Company's customers utilize its products as components for a diverse range of applications including the core, support and media layers of air, water and liquid filters; highly breathable and/or protective fabrics used in healthcare applications such as finger bandages, wound dressings and surgical masks; and in industrial end-market applications including HVAC, automotive, clothing and food packaging. DelStar's well-diversified customer base of over 1,000 includes a wide range of OEMs involved in the filtration, healthcare and a number of industrial end-markets. In addition to its headquarters, DelStar has four manufacturing facilities in Texas, Pennsylvania, California and China and employs over 350 people.

"We chose American Capital to be our partner for growth because of their long-term investment perspective, experience in growing manufacturing companies in a variety of industries and ability to work closely with our management team to structure an appropriate one source financing package," said DelStar Chief Executive Officer Mark Abrahams. "Their strong support places DelStar in a great position to strengthen our competitive market position by advancing our product line, expanding our customer base, increasing domestic and international sales and advancing our foreign presence, especially with the recent opening of our Suzhou, China manufacturing facility."

For more information about DelStar Technologies' offering of highly-engineered, thermoplastic nonwoven products, click here.

ABOUT AMERICAN CAPITAL

American Capital is a publicly traded buyout and mezzanine fund with capital resources of approximately $7 billion. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, provides capital directly to private and small public companies and through its asset management business is a manager of debt and equity investments in private companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations.

As of November 30, 2005, American Capital shareholders have enjoyed a total return of 431% since the Company's IPO - an annualized return of 22%, assuming reinvestment of dividends. American Capital has paid a total of $868 million in dividends and paid or declared $19.08 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.

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.