American Capital Invests $26Million in Montana Silversmiths – Leading Designer Manufacturer & Distributor of Western-Style Accessories.

American Capital Strategies Ltd. (Nasdaq:ACAS http://www.americancapital.com/investor_relations/stock_performance/fundamentals.cfm ) announced today it has invested $26 million in Montana Silversmiths Inc. ("Montana"), a leading designer, manufacturer and distributor of accessories, jewelry and lifestyle products for the western industry. American Capital’s investment takes the form of a senior term loan and senior subordinated debt and supports Thompson Street Capital Partners’ and management’s acquisition of Montana. American Capital is also providing a revolving credit facility.

(Many thanks to Tom McMakin of Thrive Capital Partners, Inc. http://thrivecapital.com/ for passing this along.- Russ)

"Our investment in Montana marks our 37th new investment in 2004," said American Capital COO Ira Wagner http://www.acas.com/our_people/people/resume.cfm?p_pers=wagner . "American Capital continues to build new relationships with private equity firms, and we are pleased to be working with Thompson Street Capital for the first time. Our strong position in the market, one-stop financing capabilities and experience in a wide range of industries, including consumer products, make us a prime candidate for underwriting all of the debt financing for private equity buyouts."

American Capital has invested over $1.6 billion in the last twelve months, over $1.3 billion year to date and over $80 million quarter to date. For more information about American Capital’s portfolio click here http://www.acas.com/our_portfolio/our_portfolio.cfm .

"American Capital is backing the growth of the leader in western accessories whose strong brand recognition, broad product selection and excellent merchandising capabilities have enabled it to establish relationships with virtually every western retailer," said American Capital Principal Jon Isaacson http://www.acas.com/our_people/people/resume.cfm?p_pers=isaacson . "We were particularly attracted to the Montana investment because of its compelling worldwide customer base of nearly 6,000 dealers and premier brand name, both which serve as significant barriers to entry and solidify its leading position in its market niche. In addition, Montana’s stable cash flows, favorable industry dynamics and significant growth opportunities through new customer relationships and product development bode well for its future."

Founded in 1973, Columbus, MT-headquartered Montana holds one of the most recognizable brand names in the western accessories market. The Company’s wide selection of over 10,000 SKUs of premium and aesthetically appealing products include buckles, jewelry, watches, accent trim and home décor sold under three brand names: Montana Silversmiths, Montana Lifestyles and Reflexions. Customers include western specialty stores such as Corral West, Sheplers, Cavender’s, Boot Barn and Western Warehouse. Pictured at left is a Montana Silversmiths Longhorn steer buckle made of sterling silver and gold electroplate with state of the art Montana Armor tarnish protection.

For more information about Montana’s premium western-style accessories click here http://www.ACAS.com/news/press_releases/pr/pr.cfm?p_pr=pr20041101a.html .

"This was our first time working with American Capital. We felt that their team was extremely capable and professional and were impressed by their ability to bring this transaction to a timely close," said Thompson Street Capital Principal Pete Villhard.

As of October 31, 2004, American Capital shareholders have enjoyed a total return of 287% 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 $15.24 dividends per share since its August 1997 IPO at $15 per share.

American Capital is a publicly traded buyout and mezzanine fund with capital resources over $4.2 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, acq uisitions and recapitalizations.

Companies interested in learning more about American Capital’s flexible financing should contact Mark Opel http://www.acas.com/our_people/people/resume.cfm?p_pers=opel , Principal and Senior Vice President, Business Development, at (800) 248-9340, or visit our website http://www.AmericanCapital.com .

Thompson Street Capital Partners is a $145 million private equity fund headquartered in St. Louis, MO. The firm makes investments in leveraged acquisitions, recapitalizations and going-private transactions in middle-market companies in the United States and Canada. Its current portfolio includes investments in electronics distribution, packaging, upholstered furniture, disposable food service products and radio transmitters, including Alan White Company Inc., a leading manufacturer of upholstered fabric sofas, loveseats, chairs and ottomans; Assembly & Test Worldwide Inc., a leading supplier of assembly, test and production equipment used in factory automation; and Waddington North America Inc., a top manufacturer of high quality, plastic disposable tableware for use by restaurants, caterers and consumers.

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.

Contact:
Jon Isaacson, Principal (301) 951-6122

Brian Maney, Director, Corporate Communications (301) 951-6122