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American Capital Announces Formation of the Lower Middle Market Group

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SOURCE American Capital, Ltd.

BETHESDA, Md., May 16, 2014 /PRNewswire/ -- American Capital, Ltd. (Nasdaq: ACAS) ("American Capital" or "the Company") announced today the formation of the Lower Middle Market Buyout group, led by Sean Eagle, Eugene Krichevsky, David Steinglass and Justin DuFour, who have more than a decade of experience working together at American Capital and more than 50 years of collective experience managing and investing in lower middle market buyouts.  The Lower Middle Market group has an initial staff of 10 investment professionals (the "Team") and is located in the Company's Bethesda, MD office.

On May 6, 2014, American Capital announced the launch of American Capital Equity III, LP ("ACE III"), a new $1.1 billion private equity fund being managed by the Lower Middle Market Buyout group.  Upon closing, ACE III will purchase seven middle market companies from American Capital, with an option to purchase the equity interest of one of the companies at a future date.  The current American Capital Investment Teams responsible for these companies will work together with the Lower Middle Market group to manage these investments. 

The Lower Middle Market group will also manage $445 million of committed capital, which will be used to pursue control equity investments in lower middle market companies primarily in the business and technology services, healthcare products and services and industrial growth end markets, with EBITDA of $5 to $25 million.  For more information, please refer to the ACE III Press Release on May 6, 2014.

The Lower Middle Market Buyout group will operate within American Capital's asset management affiliate, American Capital Asset Management LLC, which is dedicated to creating, capitalizing and managing alternative investment funds across asset classes, including private equity, private finance, real estate and energy and infrastructure. 

"We are delighted to have Sean, Eugene, David, Justin and their entire Team continue to devote their attention to lower middle market buyouts and deploy and manage our new ACE III fund," said Malon Wilkus, American Capital Chairman and Chief Executive Officer.  "They have broad industry experience, complementary skill sets and an excellent track record investing in lower middle market buyouts through several economic and credit cycles while at American Capital.  The Lower Middle Market Buyout group complements our larger investment platform where we target middle and upper middle market buyout opportunities up to $750 million in size, as well as energy, infrastructure and special situations investment strategies." 

"We are excited by the opportunity to manage ACE III and deploy its $445 million of committed capital in lower middle market buyouts of companies with EBITDA of $5 to $25 million," said Sean Eagle, Managing Director, Lower Middle Market Buyouts.

"We believe our collective experience investing in lower middle market companies, coupled with American Capital's infrastructure and significant market coverage, differentiates us in this segment of the market and positions us well to deliver attractive returns for our investors," said Eugene Krichevsky, Managing Director, Lower Middle Market Buyouts.

The Lower Middle Market Buyout group is seeking companies that have proven management teams, defensible market positions, stable recurring revenue streams and high cash flow conversion.  Key highlights of the targeted industries include increased outsourcing, favorable demographic trends and recession resistance, and overall market growth potential.

ABOUT AMERICAN CAPITAL
American Capital, Ltd. (Nasdaq: ACAS) is a publicly traded private equity firm and global asset manager.  American Capital, both directly and through its asset management business, originates, underwrites and manages investments in middle market private equity, leveraged finance, real estate, energy & infrastructure and structured products.  American Capital manages $19 billion of assets, including assets on its balance sheet and fee earning assets under management by affiliated managers, with $84 billion of total assets under management (including levered assets).  Through an affiliate, American Capital manages publicly traded American Capital Agency Corp. (Nasdaq: AGNC) with approximately $9 billion of net book value, American Capital Mortgage Investment Corp. (Nasdaq: MTGE) with approximately $1 billion of net book value and American Capital Senior Floating, Ltd. (Nasdaq: ACSF) with approximately $151 million in net book value.  From its eight offices in the U.S. and Europe, American Capital and its affiliate, European Capital, will consider investment opportunities from $10 million to $750 million. For further information, please refer to www.AmericanCapital.com.

This press release contains forward-looking statements. Such statements are subject to various factors and uncertainties, including the uncertainties associated with the timing of transaction closing, 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 press release does not constitute an offer to sell or the solicitation of an offer to buy any securities. The offering of these securities have not and will not be registered under the Securities Act of 1933, as amended and may not be offered absent registration or an exemption from registration.

Contact:
Investor Relations - (301) 951-5917
Media Relations - (301) 968-9400

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