FOR IMMEDIATE RELEASE:
January 24, 2007

Contact
Jean Eichenlaub, Managing Director, European Capital Services +33 (0)1 40 68 06 66
Stéphane Legrand, Director, European Capital Services +33 (0)1 40 68 06 66
Brian Maney, Director, Corporate Communications +1 (301) 951-6122

EUROPEAN CAPITAL INVESTS €19 MILLION IN ALLIANCE INDUSTRIE

Paris – January 24, 2007 – European Capital S.A. SICAR announced today that in the fourth quarter of 2006 it invested €19 million ($25 million) in Alliance Industrie, a leading distributor of automotive and commercial vehicle spare parts in France and the U.K.  European Capital’s investment takes the form of a second lien term loan and mezzanine bonds. The Royal Bank of Scotland plc acted as arranger of senior credit facilities and of a mezzanine bonds issue in support of acquisition of Alliance Industrie, in association with the Company’s founders and managers.

“European Capital continues to expand its network of relationships with European private equity sponsors.  In this investment we worked with a new private equity sponsor, Weinberg Capital Partners, to support its investment alongside the management team in Alliance Industrie,” said Ira Wagner, President of European Capital Financial Services Limited ("European Capital Services"), the sub-investment manager of European Capital.  “In addition, this was another opportunity to work with The Royal Bank of Scotland, a leading, long-standing arranger and provider of leveraged finance in Europe.”

European Capital invested €1.2 billion ($1.6 billion) in 2006, €432 million ($560 million) in the fourth quarter of 2006 and has invested €19 million ($25 million) year to date.  For more information about European Capital’s portfolio, click here. 

“Alliance Industrie occupies leading positions in the French and U.K. automotive and commercial vehicle spare parts market, a large, mature and non-cyclical market,” said Jean Eichenlaub, European Capital Managing Director.  “Alliance Industrie is well positioned to continue to consolidate the market, having already acquired and integrated over 50 companies since its inception.  Its successful acquisition strategy has allowed it to enjoy increasing market share and purchasing power.”

“We are confident in the direction of Alliance Industrie’s management team, who has grown the Company from a local business into one of the largest vehicle parts distributors in Europe,” said Stéphane Legrand, European Capital Director.  “As a larger company, Alliance Industrie has the necessary critical size to allow it to continuously attract new suppliers and expand and diversify its product offering for distributors.  In addition, it has established timely logistics capabilities through its distributors and has the necessary experience and infrastructure to quickly and successfully integrate future acquisitions.”

Founded in 1989, Paris headquartered Alliance Industrie purchases and distributes spare parts for automotive and commercial vehicles in France and in the U.K.  Alliance Industrie manages a network of 475 owned or affiliated car and commercial vehicle part distributors and serves as a key link between these distributors and a network of 430 suppliers.  It offers over 50,000 SKUs through its subsidiaries or independent network members federated under Groupauto Union France or Groupauto Union UK, both buying groups under Group Auto Union, an international group of independent vehicle parts distributors.  The Company’s main customers are independent garages and car body shops.  Alliance Industrie has approximately 2,000 employees.

”This is our first time working with European Capital and they truly lived up to their reputation for hard work, dedication, professionalism and flexibility,” said Philippe Klocanas, Partner at Weinberg Capital Partners.  “We’re looking forward to a mutually rewarding relationship with our new investment partner.”    

“We are delighted to work once again with European Capital. They immediately understood the investment thesis and acted quickly to complete the transaction,” said Howard Sharp, Managing Director European Structured Origination at The Royal Bank of Scotland.

ABOUT EUROPEAN CAPITAL

European Capital is a buyout and mezzanine fund with capital resources of approximately €1.7 billion ($2.2 billion).  European Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts and provides capital directly to private and mid-sized public companies.  European Capital generally invests from €5 million to €400 million per transaction in equity, mezzanine debt, senior debt and convertible bonds to fund growth, acquisitions and recapitalizations.

Companies interested in learning more about European Capital's flexible financing should contact Jean Eichenlaub at + 33 (0)1 40 68 06 66 in Paris, or Nathalie Faure Beaulieu or Simon Henderson at + 44 (0)20 7539 7000 in London, or visit the website at www.EuropeanCapital.com.

ABOUT AMERICAN CAPITAL

American Capital Strategies Ltd. (Nasdaq: ACAS), an affiliate of European Capital, is the largest U.S. publicly traded alternative asset manager with $12 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 invests from $5 million to $500 million in North America and €5 million to €400 million in Europe.

ABOUT WEINBERG CAPITAL PARTNERS

Weinberg Capital Partners is a private equity firm created by Serge Weinberg, the former chairman of the management board of PPR, and his three partners, Guillaume d’Angerville, Henri Gagnaire and Philippe Klocanas. Its €420 million private equity fund WCP#1 aims to accompany the development of mid-sized European companies, principally in France and Southern Europe, in all sectors except new technologies

This press release contains forward-looking statements.  The statements regarding expected results of European Capital and/or 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 European Capital and/or American Capital has made investments.

 

This announcement is neither an offer to sell nor a solicitation to buy securities.
This announcement appears as a matter of record only.