American Capital Invests $98 Million in One Stop Buyout of Leading Debt Collection Agency

Editor’s Note: This press release covers a deal previously announced by CollectionIndustry.com. The release below adds additional details surrounding the deal.

American Capital Strategies Ltd. (Nasdaq: ACAS) announced today that in 2005 it invested $98 million in a One Stop Buyout™ of Financial Asset Management Systems Inc. (FAMS), one of the leading U.S. debt collection agencies. American Capital’s investment took the form of a revolving credit facility, senior term debt, senior and junior subordinated debt and equity. Jim Paxton, FAMS President and CEO, Jerry Hogan, FAMS Senior Vice President, and other key senior management personnel hold a minority equity investment. American Capital owns approximately 79% of FAMS, on a fully diluted basis.

“American Capital’s ability to quickly and efficiently execute a One Stop Buyout™ is assisting in the growth and development of a leading niche player in debt collection,” said American Capital COO Ira Wagner. “We are pleased to invest in a leading company, with strong cash flows, in a growing industry.”

American Capital invested approximately $3.2 billion in the last twelve months and $312 million year 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, go to http://www.americancapital.com/our_portfolio/our_portfolio.cfm.

“We’re supporting a management team with significant industry experience and a history of working together,” said American Capital Managing Director Jon Isaacson. “Attractive industry fundamentals, a stable revenue base and a reputation for quality and efficiency make FAMS an appealing investment.”

“FAMS has significant opportunities to expand its customer base,” said American Capital Principal Sean Eagle. “The nature of FAMS’ business and its variable cost structure help to insulate it from any adverse affects arising from economic trends.”

Founded in 1993 and headquartered in Atlanta, GA, FAMS employs over 500 in three facilities. During 2004, the Company managed $2.6 billion of delinquent or defaulted consumer receivables, or over 1 million accounts. FAMS operates two divisions, one devoted to the collection of defaulted student loans for the U.S. Department of Education under a series of long-term contracts, the other devoted to the collection of delinquent consumer receivables for a number of banking, telecommunications and state and municipal government customers.

“FAMS’ mission is to provide our clients with excellent support, offer precise solutions to fulfill their unique needs and exceed their recovery expectations,” said FAMS President and CEO Jim Paxton. “With American Capital’s support, we are all very excited for FAMS’ future. We have a strong senior management team, a motivated and competitive work force and a plan to add more than 200 positions in our Atlanta and St. Charles centers during 2006.”