FOR IMMEDIATE RELEASE:
June 28, 2007

Contact
Jon Isaacson, Managing Director (301) 951-6122
Miles Arnone, Managing Director, Technology Group (650) 289-4560
Brian Maney, Director, Corporate Communications (301) 951-6122

AMERICAN CAPITAL INVESTS $548 MILLION IN THE RECAPITALIZATION OF EXSTREAM SOFTWARE

Bethesda, MD – June 28, 2007 – American Capital Strategies Ltd. (Nasdaq:ACAS) announced today that it has invested $548 million in the recapitalization of Exstream Software LLC, a leading provider of enterprise software for the rapid design and delivery of personalized communications.  American Capital’s investment takes the form of a senior term loan, senior and junior subordinated debt and convertible preferred and common equity.  American Capital is also providing a revolving credit facility.  Exstream’s founders and other management are also making a significant investment in equity alongside American Capital, retaining more than 40% ownership of the Company on a fully diluted basis through reinvestment and a new option program.  There will be no change to the leadership or strategic direction of Exstream post-close.

“Exstream Software, a leading provider of enterprise software, is an excellent addition to our diversified portfolio of over 200 companies,” said Brian Graff, American Capital Regional Managing Director.  “With the collaboration of the American Capital Technology Group, we assembled a one stop financing package to secure this exceptional investment opportunity.  We are pleased to be supporting Exstream’s entrepreneurial and committed management team as it builds on the Company’s unique position in this dynamic industry.”

American Capital has invested directly and through its funds under management $9.5 billion in the last twelve months, $5.4 billion year to date and over $3.5 billion quarter to date.  Not including funds under management, American Capital has invested $6.8 billion in the last twelve months, $3.9 billion year to date and over $2.5 billion quarter to date.  For more information about American Capital’s portfolio, click here.

“With the unrivalled breadth of its capabilities, Exstream possesses a critical edge in a fast growing industry, whose expansion is driven by a renewed emphasis on customer communication and personalization, the need to unlock the value of vast databases of customer-centric information and the mounting exigencies of compliance and risk management,” said Jon Isaacson, American Capital Managing Director.  ”Exstream has developed a wide base of blue-chip customers and integrated, modular software products that ensure a continuing revenue stream and a loyal customer base.”

“Exstream has the strong cash flows that characterize our technology investments: a scalable business model and a market leadership position with its Dialogue product,” said Miles Arnone, American Capital Managing Director, Technology Group.  “Exstream anticipates accelerated growth through wider use of recently released Dialogue Live, expansion into additional customer verticals and further penetration of international markets.”

Founded in 1998, Exstream Software is an enterprise software provider whose flagship product, Dialogue, is a comprehensive platform for building and deploying high-volume and interactive document applications across the enterprise.  It was designed with an open architecture and robust functionality to easily connect with an enterprise's data sources, systems and web infrastructure.  With just one solution, customers can create relevant and timely communications that connect with their customers at every touch point.  Companies that adopt Dialogue report significantly reduced costs, fewer calls to customer service and tripled response rates.  Exstream’s recently released Dialogue Live, which is fully integrated with Dialogue 6.0, also automates integration of field-edited documents with centralized corporate systems and document production.  Consistently ranked among the fastest growing technology companies, Exstream has more than 300 employees and more than 400 blue-chip and middle market customers in a variety of industries worldwide.

“We are delighted that American Capital is investing in Exstream,” said Davis Marksbury, Exstream Software CEO and Founder.  “Its broad financing capabilities and diverse industry expertise, including technology, make it the ideal investment partner as we pursue our long-range growth strategy.”

ABOUT AMERICAN CAPITAL

American Capital is the third largest U.S. publicly traded alternative asset manager with $12 billion in assets under management (third to The Blackstone Group (NYSE: BX) and Fortress (NYSE: FIG)).  American Capital, both directly and through its global asset management business, is an investor in management and employee buyouts, private equity buyouts, and early stage and mature private and public companies.  American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations.  American Capital and its affiliates invest from $5 million to $800 million per company in North America and €5 million to €500 million per company in Europe.

As of May 31, 2007, American Capital shareholders have enjoyed a total return of 656% since the Company's IPO—an annualized return of 23%, assuming reinvestment of dividends.  American Capital has paid a total of $1.6 billion in dividends and paid or declared $24.24 dividends per share since going public in August 1997 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 or www.EuropeanCapital.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 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.