BETHESDA, Md., March 20 /PRNewswire-FirstCall/ -- American Capital Strategies Ltd. announced today that it has realized a gain of $18 million and recognized total sale proceeds of $371 million in the first quarter of 2008 from the sale of its portfolio company Exstream Holdings Inc. ("Exstream") to HP. Exstream Holdings is the parent company of Exstream Software, LLC ("Exstream Software"), a leading provider of enterprise software for the rapid design and delivery of personalized communications.
American Capital has now realized an inception to date net gain on its investment in Exstream of $15 million, earning a 22% compounded annual rate of return on its investment, including interest, dividends and fees earned over the life of its investment. Together with its funds under management, the combined American Capital group realized an inception to date aggregate gain of $21 million from the exit, earning an aggregate 23% compounded annual rate of return on their investments, including interest, dividends and fees earned over the life of their investments. The proceeds received by American Capital were less than its fourth quarter 2007 valuation of the investment by $5 million, or 1%.
American Capital and its funds under management have received $6.2 billion in total amortizations, prepayments and exits in the last twelve months and approximately $1 billion year to date. Not including funds under management, American Capital has received $4.6 billion in total amortizations, prepayments and exits in the last twelve months and approximately $0.7 billion year to date.
"We made this investment in June 2007 which some would arguably say was the 'top of the market'," said Jon Isaacson, Managing Director, American Capital Buyout Group. "Our successful investment in Exstream Software was the result of a strong collaboration between the American Capital Buyout Group and the Technology Group and our ability to add value by using our One Stop Buyout(TM). We were able to make a great investment in a company that was reasonably priced considering its opportunities for growth and strategic value. This investment is an example of our ability to sort through our extensive deal flow and invest in the best companies."
"The strategic combination of Exstream Software's leading technology, which streamlines the design and delivery of personalized documents and other communications materials, and HP's leadership in document output management and printing is expected to provide customers with improved business processes and an expanded portfolio of products and services," said Miles Arnone, Managing Director, American Capital Technology Group.
American Capital acquired Exstream in a One Stop Buyout(TM) in June 2007, investing $548 million. American Capital's investment took the form of a revolving credit facility, senior term loan, senior and junior subordinated debt and convertible preferred and common equity. In September 2007, American Capital completed the syndication of a $151 million first lien credit facility consisting of a revolving credit facility and first lien term loan for Exstream.
"The sale of Exstream is a testament to the strength and vision of a management team that has built it into the leading document automation company," said Eugene Krichevsky, Principal, Buyout Group. "Our investment in Exstream has proven to be excellent for American Capital. Less than a year ago, we invested $548 million in the company and this has quickly resulted in an attractive IRR of 22% for us and our shareholders. Our ability to sell to HP, the world's largest information technology company, demonstrates the quality of Exstream Software and validates our investment thesis."
Founded in 1998, Exstream Software provides enterprise software solutions for businesses around the world to streamline document creation processes and produce more effective, relevant communications of all types for delivery through print/mail and online channels. The company's 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 connect easily 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 Software's 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 Software has over 300 employees and more than 400 blue-chip and middle market customers in a variety of industries worldwide.
For more information about American Capital's investment in Exstream, go to http://www.acas.com/news/newsreleases/2007/pr20070628-1.html .
For a chart showing American Capital's exited portfolio companies, go to http://www.acas.com/our_portfolio/exited.html .
ABOUT AMERICAN CAPITAL
American Capital is the largest U.S. publicly traded private equity fund and one of the largest U.S. publicly traded alternative asset managers that is a member of the S&P 500. With $19 billion in capital resources under management, 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 euro to 500 million euro per company in Europe.
As of February 29, 2008, American Capital shareholders have enjoyed a total return of 509% since the Company's IPO-an annualized return of 19%, assuming reinvestment of dividends. American Capital has paid a total of $2.1 billion in dividends and paid or declared $27.17 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 http://www.americancapital.com/ or http://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.