American Capital Invests $35 Million in Recapitalization of Tanenbaum-Harber and Thesco Benefits

May 19,2006 00:00 by PR-Newswire

BETHESDA, Md., May 19 /PRNewswire-FirstCall/ -- American Capital
Strategies Ltd. (Nasdaq: ACAS) announced today it has invested $35 million
in a holding company established for the recapitalization of
Tanenbaum-Harber Co. Inc., an insurance brokerage and risk management
consulting firm, and Thesco Benefits LLC, an employee benefits brokerage
specialist. American Capital's investment takes the form of a senior term
loan, senior subordinated debt and redeemable preferred and common equity.
American Capital is also providing a revolving credit facility. Olympus
Partners is the equity sponsor and the majority owner of the Company. The
management teams of the combined company are also investing in the equity
of the combined entity.

"We are pleased to work with Olympus for the first time, providing them
with a one-stop debt solution for their acquisition and combination of
Tanenbaum-Harber and Thesco Benefits," said American Capital Regional
Managing Director Brian Graff. "Olympus is a strong sponsor with
significant experience in the financial services industry as well as an
extensive track record in executing buy-and-build strategies. We are
confident in their planned acquisition and integration strategy. In
addition, we're delighted to support the committed management teams of
Tanenbaum-Harber and Thesco Benefits."

American Capital has invested approximately $3.8 billion in the last
twelve months, approximately $1.4 billion year to date and $581 million
quarter 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.acas.com/our_portfolio/our_portfolio.cfm.

"Tanenbaum-Harber and Thesco Benefits excel in negotiating and placing
insurance policies for their clients while maintaining a high standard of
customer service. Both companies have experienced strong growth, a stable
customer base and favorable cash flow characteristics, which provide a
solid foundation to build a larger and stronger insurance platform," said
American Capital Principal Sean Eagle. "We expect the consolidation of
Tanenbaum- Harber and Thesco Benefits to result in cross-selling
opportunities and customer and business diversification. In addition,
favorable dynamics in the insurance brokerage industry should create
attractive acquisition opportunities."

Founded in 1860, Tanenbaum-Harber is an intermediary that places and
negotiates insurance contracts for both commercial and personal clients.
The Company offers a wide spectrum of insurance policies, including
property & casualty, workers compensation, construction-related,
environmental and life. Headquartered in New York, NY, the Company is one
of the largest regional insurance brokerage and risk management services
firms within the greater New York, New Jersey and Connecticut tri-state
area.

Thesco Benefits, also headquartered in New York, NY, is one of the
leading employee benefits brokerage specialists in the tri-state area. The
Company assists clients in the design and purchase of a variety of
different benefits, including group medical, dental, vision and life
insurance, accidental death and dismemberment insurance, disability
insurance and long term care coverage.

Collectively, Tanenbaum-Harber and Thesco Benefits operate four offices
in the New York area with over 140 employees.

"We are delighted to partner with American Capital and the management
teams of Tanenbaum-Harber and Thesco Benefits. We are confident that the
combined capital resources of Olympus and American Capital, coupled with
this outstanding management team, will create one of the most exciting
platforms for growth in the insurance brokerage industry," said Olympus
Partners Partner Jim Quinn. "American Capital's flexible financing
structure will allow us to efficiently pursue growth through acquisitions
as well as organically."

ABOUT AMERICAN CAPITAL

American Capital is a publicly traded buyout and mezzanine fund with
capital resources of approximately $7.7 billion. American Capital invests
in and sponsors management and employee buyouts, invests in private equity
buyouts, provides capital directly to early stage and mature private and
small public companies and through its asset management business is a
manager of debt and equity investments in private companies. American
Capital provides senior debt, mezzanine debt and equity to fund growth,
acquisitions, recapitalizations and securitizations. American Capital
invests up to $300 million per company.

As of April 30, 2006, American Capital shareholders have enjoyed a
total return of 405% since the Company's IPO -- an annualized return of
21%, assuming reinvestment of dividends. American Capital has paid a total
of $1.1 billion in dividends and paid or declared $20.73 dividends per
share since its August 1997 IPO 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.

ABOUT OLYMPUS PARTNERS

Olympus Partners is a private equity firm focused on middle market
management buyouts and later stage growth capital deals. Founded in 1989,
Olympus manages over $1.7 billion on behalf of corporate pension plans,
public retirement systems, university endowment funds and executives of
Olympus' portfolio companies. Olympus invests from $20 million to $150
million or more. Olympus' experience with financial services portfolio
companies include realized investments in: Aspen Re, a leading, worldwide
property and casualty reinsurance underwriter and Tempest Re, a worldwide
underwriter of property catastrophe reinsurance. Current portfolio
companies include: Ariel Re, a Class 4 Bermuda property and casualty
reinsurance company and Talbot Holdings, the parent of a specialty
insurance group operating within the Lloyd's of London Insurance Market.

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 Strategies 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.

SOURCE American Capital Strategies Ltd.

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