American Capital Invests $35 Million in Leading Manufacturer & Marketer of Automotive & Recreational Vehicle Aftermarket Products

BETHESDA, Md., July 27 -- American Capital Strategies Ltd. announced today it has invested $35 million in Hopkins Manufacturing Corp., a leading manufacturer and marketer of specialized towing products and functional accessories for the automotive and recreational vehicle aftermarket. American Capital's investment takes the form of senior and junior subordinated debt and redeemable preferred equity and supports the acquisition of Hopkins by Friend Skoler Equity Investors LP from Harbour Group. Antares Capital Corporation led the senior financing.

"We are pleased to partner with Friend Skoler, our 12th new private equity relationship in the last twelve months," said American Capital COO Ira Wagner. "Our investment expertise in a wide range of industries, ability to provide flexible capital at competitive pricing as well as conduct quick and intensive due diligence position us to partner with a growing list of private equity sponsors and to assist in the growth of their portfolio companies."

American Capital has invested over $1.4 billion in the last twelve months and over $750 million year to date. For more information about American Capital's portfolio, go to http://www.americancapital.com/our_portfolio/our_portfolio.cfm.

"Hopkins' outstanding management team has grown the company into an industry leader whose well-recognized brands hold first or second market positions in most of its product categories," said American Capital Managing Director David Steinglass. "With a portfolio of leading brands, quality, easy to use products and an efficient, flexible manufacturing strategy, Hopkins has built numerous strong, longstanding customer relationships."

Founded in 1953 and headquartered in Emporia, KS, Hopkins is a manufacturer and marketer of specialized towing products and accessories for the automotive and recreational vehicle aftermarket. The company sells over 2,700 SKUs under well-recognized brand names, including Hoppy(R), LiteMate(R), TAP(TM), BrakeBuddy(R), FloTool(TM), SpillSaver(R) and Spillmaster(R). The Company sells a wide range of vehicle-to-trailer wiring products including adapters, connectors, electronic brake controllers, and converters, as well as the leading RV supplemental tow brake system and a variety of automotive accessories including ice scrapers, snow brushes, flow control spouts, funnels, oil change kits, cup holders, headlight aimers, brushes and squeegees.

"This is our first time working with American Capital and we were impressed with their flexibility, which enabled them to adapt to our financing needs throughout the investment process," said Alexander Friend, a Managing Partner at Friend Skoler & Co. "With the support of its investment partners, Hopkins is well positioned to grow its business through new product introductions and additional channel penetration, as well as strategic acquisitions."

For more information about Hopkins' extensive line of well-known automotive products, go to http://www.acas.com/news/press_releases/pr/pr.cfm?p_pr=pr20040727a.html.

As of June 30, 2004, American Capital shareholders have enjoyed a total return of 242% since the Company's IPO -- an annualized return of 20%, assuming reinvestment of dividends. American Capital has declared a total of $14.52 per share in dividends since its August 1997 IPO.

American Capital is a publicly traded buyout and mezzanine fund with capital resources over $3 billion. American Capital is an investor in and sponsor of management and employee buyouts; invests in private equity sponsored buyouts, and provides capital directly to private and small public companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalizations.

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 our website at http://www.americancapital.com/.

Founded in 1998, Friend Skoler & Co., L.L.C. is a private equity firm that invests in middle market companies in partnership with management. FSC typically invests between $10 million and $40 million of equity per transaction and manages Friend Skoler Equity Investors, L.P., a private equity fund with $231 million of capital commitments. Friend Skoler is headquartered in Saddle Brook, NJ.

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 or national economic conditions, or changes in the conditions of the industries in which American Capital has made investments.