FOR IMMEDIATE RELEASE:
May 23, 2006

Contact
L. Thomas Gregory, Managing Director (312) 681-7400
Demian Kircher, Principal (312) 681-7400
John Neis, Vice President (312) 681-7400
Brian Maney, Director, Corporate Communications (301) 951-6122

American Capital Invests $24.5 Million in Add-on Acquisition for Portfolio Company the Hygenic Corporation

Bethesda, MD - May 23, 2006 - American Capital Strategies Ltd. (Nasdaq:ACAS)announced today it has invested an additional $24.5 million in its portfolio company The Hygenic Corporation ("Hygenic") to support its acquisition of Performance Health Inc., a developer and marketer of topical analgesics to healthcare practitioners. American Capital's investment takes the form of a second lien term loan and preferred and common equity. American Capital's cumulative gross investments in Hygenic total $47 million. GE Antares Capital, a unit of GE Commercial Finance, and Madison Capital Funding LLC are providing a senior secured credit facility. The Company's existing investors, Baird Capital Partners and Beecken Petty O'Keefe & Company, are investing in Hygenic's equity. Baird Capital Partners is the lead investor in Hygenic.

"We're delighted that Baird Capital Partners considers us a long-term investment partner for Hygenic and has come to us to support the Company's acquisition of Performance Health. American Capital's dependability, as well as creativity and flexibility in creating attractive financing packages, allows us to build on our relationships with private equity firms like Baird Capital Partners," said American Capital Regional Managing Director Darin Winn. "An American Capital portfolio company since 2004, the Hygenic Corporation has a track record of healthy financial performance, which places it in an optimal position to expand its product line with Performance Health."

American Capital has invested approximately $4.1 billion in the last twelve months, approximately $1.6 billion year to date and $805 million quarter to date. These amounts do not include American Capital's unfunded equity commitment and debt funded to its portfolio company European Capital. For more information about American Capital's portfolio click here.

"Hygenic's acquisition of Performance Health will create one of the largest manufacturers and marketers of branded consumable products sold to the rehabilitation market and will position the Company as the preeminent consolidator in a rapidly growing and highly fragmented sector," said American Capital Principal Demian Kircher. "The acquisition of Performance Health will enable Hygenic to meet the growing demand for inexpensive low-tech healthcare products driven by demographic factors and healthcare cost containment."

"Performance Health's BIOFREEZE® and Hygenic's Thera-Band® products both enjoy strong brand awareness among healthcare practitioners," said American Capital Vice President John Neis. "With a combined product offering of strong brand names, leading market shares and complementary distribution channels, there are many appealing opportunities for the combination of both product lines."

Founded in 1992, Performance Health develops and markets topical pain relievers to chiropractic, podiatry, physical, occupational and massage therapy practitioners. The Company is headquartered in Export, PA and distributes its products primarily through healthcare and therapy professionals. Its products include BIOFREEZE®, a pain reliever used to help relieve pain from common sprains, muscle aches, injuries or arthritis, and PROSSAGE®, a warming massage ointment.

American Capital first invested in Hygenic in January 2004. Founded in 1925, Akron, OH-based Hygenic is a leading manufacturer of branded and private label healthcare and fitness products. The Company manufactures an extensive range of products under the Thera-Band®, Dyna-Band®, AquafinsTM and Parabath® brands, including resistive exercise bands and tubing, exercise balls, exercise mats and aquatic products as well as healthcare and specialty products.

"American Capital's comprehensive due diligence and dedicated professionals have made them a valued partner since our original investment in Hygenic over two years ago," said C. Andrew Brickman, Partner at Baird Capital Partners. "This is our third time working with American Capital and we look forward to a continued relationship as together we support Hygenic's expansion to meet the demands of the dynamic healthcare market."

For more information about American Capital's original investment in The Hygenic Corporation click here.

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.