FOR IMMEDIATE RELEASE:
June 26, 2006

Contact
Jon Isaacson, Managing Director (301) 951-6122
Eugene Krichevsky, Vice President (301) 951-6122
Brian Maney, Director, Corporate Communications (301) 951-6122

American Capital and Contec Management Invest in Buyout of Contec

Bethesda, MD - June 26, 2006 - American Capital Strategies Ltd. (Nasdaq: ACAS) announced today it has invested in the buyout of Contec, LLC, the leading repairer of cable set-top-boxes in North America. American Capital's investment takes the form of a senior term B loan, senior and junior subordinated debt and convertible preferred and common equity. American Capital is also providing a revolving credit facility. CIT Communications, Media and Entertainment, a unit of CIT Group Inc. (NYSE: CIT), and CIBC World Markets are also investing in the revolving credit facility and senior term B loan. Contec management is making a significant investment in equity alongside American Capital.

"Once again, American Capital has demonstrated its extensive buyout capabilities and experience in the successful completion of the buyout of Contec," said American Capital Regional Managing Director Brian Graff. "American Capital's large team of investment professionals and internal due diligence staff, and our ability to rapidly analyze this transaction and arrange appropriate financing enabled us to respond successfully to this excellent opportunity. This investment will support Contec's further growth and solidify its leading position in the cable set-top-box repair and maintenance market."

American Capital has invested approximately $4.2 billion in the last twelve months, approximately $2.2 billion year to date and approximately $1.4 billion 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.

"Contec is the leading repair and maintenance vendor for virtually every cable set-top-box original equipment manufacturer and multiple system operator in North America and maintains excellent relationships with both groups," said American Capital Managing Director Jon Isaacson. "Having gained an industry wide reputation for quality and efficiency, Contec stands to benefit from the shift to all digital television and rapid evolution towards higher-end set-top-boxes with additional components, such as digital video recorders. The trend towards increasingly complex and expensive set-top-boxes will underpin a steady increase in demand for Contec's services."

"Contec is ensuring its continued growth by leveraging strong relationships with all key cable industry players and continuously implementing process improvements within its repair facilities," said American Capital Vice President Eugene Krichevsky. "Contec's industry experience, extensive capacity and low-cost position also present significant barriers to entry into this rapidly growing market."

Founded in 1978, Contec is based in Schenectady, NY. In 2002, Contec formed its Worldwide Digital subsidiary to acquire the repair and maintenance business of Motorola Inc. Contec diagnoses and repairs set-top-boxes sent to it by multiple system operators both within and outside of warranty periods. In addition, it remanufactures and sells used Motorola digital set-top-boxes, is the exclusive distributor of Motorola set-top-box proprietary parts for in-warranty repair to authorized service centers, handles set-top-box recalls and field retrofits for original equipment manufacturers and designs and markets remote controls. Contec has its primary facilities in Schenectady and Matamoros, Mexico as well as additional facilities in Mexico City, Mexico, Seattle, WA and Brownsville, TX. The Company has over 2,000 employees.

"We consider ourselves extremely fortunate to be partnering with American Capital as we continue to expand our leading market position," said Contec CEO Gary Stein. "American Capital's significant resources and ability to provide financing across the entire capital structure will be valuable assets as Contec continues its various growth initiatives."

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 and commercial loan obligations. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations.

As of December 31, 2005, American Capital shareholders have enjoyed a total return of 396% since the Company's IPO - an annualized return of 20%, assuming reinvestment of dividends. American Capital has paid a total of $868 million in dividends and paid$20.73 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.

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