American Capital Invests $33 Million in Leading Diversified Automotive Aftermarket Parts Manufacturer

BETHESDA, Md., Dec. 22, 2004 -- American Capital Strategies Ltd. announced today it has invested $33 million in Qualitor Inc., a diversified automotive aftermarket parts manufacturer. American Capital's investment takes the form of senior and junior subordinated debt and preferred and common equity. A syndicate of lenders led by Antares Capital Corporation is investing in a revolving credit facility, senior term loans and a second lien term loan. Thayer Capital Partners is the lead investor and majority owner in Qualitor with Baird Capital Partners playing an active supporting role in the transaction.

"We are delighted to be partnering with two highly regarded equity sponsors, Thayer Capital and Baird Capital, in their acquisition of Qualitor," said American Capital COO Ira Wagner. "This is the first time we are working with Thayer and our second investment with Baird. Baird's significant Asian sourcing and manufacturing expertise combined with Thayer's automotive experience should add significant value to Qualitor as it moves forward."

American Capital has invested nearly $1.8 billion in the last twelve months, nearly $1.6 billion year to date and approximately $330 million quarter to date. For more information about American Capital's portfolio, go to http://www.acas.com/our_portfolio/our_portfolio.cfm.

"Qualitor has strong market share across its product lines. The Company's unique attributes in each major product category, including rapid turnaround times, reliable fulfillment capabilities and outstanding design and reverse engineering capabilities, create a sustainable leading market position," said American Capital Managing Director David Ehrenfest Steinglass. "As the automotive aftermarket experiences stable, accelerating growth trends resulting from increasing vehicle miles driven and a higher proportion of SUVs and trucks on the road, Qualitor can expect an increase in demand for its line of replacement wear products."

Founded in 1999, Southfield, MI based Qualitor manufactures application- specific wear products, including brake components, wiper blades, engine control devices and heavy duty truck parts. In addition to its headquarters, Qualitor has eight manufacturing, distribution and storage facilities in Connecticut, Florida, Michigan and Ohio and employs nearly 800.

"American Capital's creativity and flexibility were critical elements to successfully completing this investment," said Thayer Capital Partners Managing Partner Dan Dickinson. "In addition, American Capital's prior experience in the automotive and heavy duty truck aftermarket made them the logical partner for our acquisition of Qualitor."

"After working with American Capital on a previous acquisition, we knew we could turn to them for mezzanine financing in this investment," said Baird Capital Partners Partner Gordon Pan. "Once again, they proved to be a reliable investment partner."

For more information about Qualitor's comprehensive line of automotive and heavy duty aftermarket products, go to http://www.acas.com/news/press_releases/pr/pr.cfm?p_pr=pr20041222a.html.

American Capital is a publicly traded buyout and mezzanine fund with capital resources of more than $4.8 billion. American Capital is an investor in and sponsor of management and employee buyouts, invests in private equity 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.

As of November 30, 2004, American Capital shareholders have enjoyed a total return of 299% since the Company's IPO -- an annualized return of 21%, assuming reinvestment of dividends. American Capital has paid a total of $583 million in dividends and paid or declared $16.03 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 our website at http://www.americancapital.com/.

Thayer Capital Partners is a private equity investment firm based in Washington, D.C. managing three private equity funds totaling approximately $1.5 billion. The firm manages buyouts, consolidations, and growth equity investments with a focus on industrial products and services. Thayer's portfolio of investments includes The Brown Corporation of America, a leading Tier II supplier of highly engineered, complex welded assemblies to the North American automotive market; Heckethorn, a leading designer and manufacturer of metal exhaust hardware components for the North American automotive original equipment market; TEAC Aerospace Technologies Inc., a global leader in supplying airborne video recording products to the defense industry; and Morton Welding Company, a leading independent manufacturer of welded tubular assemblies for commercial vehicle applications.

With more than 40 investment professionals in the United States and Europe, Robert W. Baird & Co.'s global private equity business has raised and managed approximately $1.2 billion in capital. It includes Baird Capital Partners, Baird Venture Partners and Granville Baird Capital Partners. Baird Capital Partners provides late-stage growth capital or change-of-control capital to U.S.-based, middle-market companies in the areas of Business Services, Industrial Products and Health Care. Baird Capital's U.S. operations are also supported by an operating subsidiary in China called Baird Asia. Baird Capital Partner's portfolio of investments includes Commercial Vehicle Group Inc., a leading manufacturer of components and systems for the medium and heavy duty commercial vehicles market; J.L. French Automotive Castings Inc., a manufacturer of complex aluminum die cast automotive components; and The Hygenic Corporation, a leading manufacturer and marketer of branded and private label healthcare and fitness products. In January 2004, American Capital invested in Baird Capital Partner's acquisition of The Hygenic Corporation. For more information about The Hygenic investment, go to http://www.acas.com/our_portfolio/companies/company.cfm?p_comp=123