FOR IMMEDIATE RELEASE:

September 18, 2006

Contact
Frank Do, Managing Director (310) 806-6280
Kimberly Reed, Principal (310) 806-6280
Brian Maney, Director, Corporate Communications (301) 951-6122

American Capital Invests in One Stop Buyout™ of Axygen

Bethesda, MD – September 18, 2006 – American Capital Strategies Ltd. (Nasdaq: ACAS) announced today it has invested in the One Stop Buyout™ of Axygen Inc., a leading manufacturer and distributor of high quality life sciences plastic consumables, liquid handling products and bench-top laboratory equipment.  American Capital’s investment takes the form of a senior term loan, senior and junior subordinated debt and equity.  American Capital is also providing a revolving credit facility.  Post close, American Capital owns approximately 79% of the Company on a fully diluted basis, with Axygen management owning the remaining balance.

“We are delighted to be investing in the One Stop Buyout™ of Axygen and supporting a superb management team that has decades of experience in the life sciences laboratory plastic consumables and equipment industry and a solid track record of successfullly completing and integrating strategic acquisitions and recording robust financial performance,” said American Capital Regional Managing Director Darin Winn.  “As a market leader in the manufacture and distribution of life sciences laboratory equipment and consumables, Axygen is an ideal addition to our growing portfolio of middle-market companies, including those in the medical products and life sciences industries.  Our expertise in these industries, exemplified by our investments in Value Plastics and ECA Medical Instruments, coupled with our financing capabilities positioned us to invest in this excellent company.”

American Capital has invested $5 billion in the last twelve months, approximately $3.5 billion year to date and $1 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.

“Axygen is an exceptionally fast growing company in a rapidly growing industry, driven by global growth in pharmaceutical expenditures and biotechnology research and development and U.S. growth in laboratory spending,” said American Capital Managing Director Frank Do.  “The Company produces a vast array of products, is constantly innovating and has a superior reputation for quality, service and new product development among its worldwide and diversified loyal customer base.  Axygen has repeatedly demonstrated its ability to successfully integrate new strategic acquisitions, broadening its product offerings, providing it with lower cost manufacturing and positioning it to sell into new, fast growing markets, such as China.”

“Axygen is well positioned in many of the industry’s highest growth segments including high throughput screening, DNA and RNA testing and the protein crystallogaphy and manual liquid handling markets,” said American Capital Principal Kimberly Reed.  “The Company expects to sustain its industry leading growth with its shift towards higher margin products, further manufacturing automation, increased volumes and a continuing shift of some manufacturing to low-cost production facilities in China, Europe and Mexico.”

Founded in 1993, Axygen is a manufacturer and distributor of high quality life sciences plastic consumables, liquid handling products and bench-top laboratory equipment.  The Company offers over 2,400 individual products in two principal categories: plastic consumables, including high throughput screening and polymerase chain reaction products, filter and pipette tips, microtubes and screw cap tubes; and lab equipment products, including centrifuges, shakers, rockers, ovens and incubators.  Axygen’s products are sold through distributors primarily to end users in the fields of science and medicine in the research and development divisions of biotechnology and pharmaceutical companies and government, academic, clinical, industrial research and other laboratories.  Axygen is headquartered in Union City, California and has manufacturing facilities in California, New Jersey, Poland and China.

“American Capital’s experience with medical products and life sciences companies, its understanding of the sector and its ability to support its companies with additional capital investments, make it an outstanding investment partner for Axygen as we extend our industry leadership into new geographic and product markets,” said Axygen Founder and CEO Hemant Gupta.  “We welcome American Capital’s investment and look forward to a rewarding partnership.”-- TemplateEndEditable -->

ABOUT AMERICAN CAPITAL

American Capital is a publicly traded buyout and mezzanine fund with capital resources of $8.9 billion. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, provides capital directly to early stage and mature 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, recapitalizations and securitizations. American Capital invests up to $400 million per company.

As of August 31, 2006, American Capital shareholders have enjoyed a total return of 476% since the Company's IPO - an annualized return of 21%, assuming reinvestment of dividends.  American Capital has paid a total of $1.2 billion in dividends and paid or declared $21.56 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 www.AmericanCapital.com.

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.