American Captital Strategies ( Nasdaq:ACAS)
American Capital, which was incorporated in 1986, is the second largest U.S. publicly traded alternative asset manager with $12 billion in assets under management (second to Fortress). 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 Euro 5 million to Euro 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, in 1997.
This is an annualized return of 23%, assuming reinvestment of dividends. American Capital has paid a total of $1.6 billion in dividends. The current dividend yield is 7.75%.
American Capital has invested directly and through its funds under management $8.7 billion in the last twelve months, $4.6 billion year to date and approximately $3 billion quarter to date.
Recent investments by the Bethesda-based company have included:
$125 million into Velocity Financial Group Inc., a newly formed specialty finance company that will provide equipment financing and working capital to middle-market and venture-backed companies.
$8.9 million into HALT Medical Inc. Founded in 2005, HALT Medical is a medical device company focused on women's health. It has developed a procedure and related equipment for treating uterine fibroids that is less expensive, more effective and less invasive than other alternatives.The Company is located in Pleasanton, CA.
American Capital's investment will be used for growth capital and takes the form of convertible preferred equity. HALT Medical management and other investors contributed $3.1 million for a total of $12 million in equity financing. "Our equity financing for HALT Medical supports the commercialization of a beneficial medical procedure for women by a highly experienced management team with exceptional medical credentials," said Darin Winn, American Capital Regional Managing Director. "Our Los Angeles based buyouts team, with significant expertise in investing in healthcare and medical products, and our Palo Alto Technology Group collaborated to bring us this compelling opportunity."
"The commercialization of HALT Medical's procedure will substantially increase the number of women obtaining treatment for the condition and will provide access to treatment to greater segments of the population domestically and internationally," said Kimberly Reed, American Capital Principal. "HALT Medical's products are expected to reduce overall treatment costs and to date have extremely high success rates with quick recovery times and minimal side effects."
$38 million into CAMP Systems International Inc., which provides maintenance tracking services for corporate aircraft. The investment is in the form of a second lien term loan to support the company's recapitalization, American Capital said. CAMP Systems is a portfolio company of private equity firm Warburg Pincus.
American Capital Strategies Ltd. and an affiliate have also invested in the One Stop Buyout(TM) of Imaging Business Machines LLC ("IBML"), a leading provider of high speed, intelligent document scanning hardware and software, as well as recurring support and maintenance services.
Imaging Business Machines is at the forefront of the document processing and image scanning market, whose growth is being driven by the scanning needs of the health care and financial services industries as well as of federal and state governments. IBML has strong and established relationships with resellers, integrators and business processing outsourcers, providing it with a diversified and growing customer base.
American Capital's investment takes the form of a first lien term loan, senior subordinated debt, convertible preferred equity and common equity. American Capital is also providing a revolving credit facility. American Capital Equity Fund I LLC, a fund managed by American Capital, provided 30% of the American Capital equity investment. Imaging Business Machines' management team is also investing in the preferred
and common equity. "This is a very exciting time at IBML," said Derrick Murphy, Imaging Business Machines President and CEO. "With American Capital's investment in IBML, we are positioned to take advantage of their investment management expertise and combine it with our experienced executive team to maximize the growth potential of IBML. With the strength of American Capital, we will expand the reach of our products and services, building on our leadership in the industry."
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Buy American Capital Strategies ( Nasdaq:ACAS) up to $46.