Whether you make musical instruments or mints, salon appliances or safes, this company has a strategy for you. Founded in 1986, American Capital invests in a diverse selection of middle-market companies both directly and through its global asset management business. It typically provides up to $300 million per transaction to companies for management and employee buyouts and private equity buyouts. The firm also directly provides capital to companies. Other investments include financial products such as commercial mortgage-backed securities and collateralized loan obligations. American Capital's portfolio consists of stakes in more than 150 companies and has a focus on manufacturing, services, and distribution.
The firm develops long-term relationships with its portfolio companies and takes an active role in their oversight.
One of the largest publicly traded US private equity firms, American Capital has approximately $84 billion of assets under management through its asset management business, American Capital, LLC.
The company has seven offices in the US, Europe, and Asia. Its European Capital affiliate pursues a similar strategy. It provides capital directly to early state and older private and small public companies in Europe. It has made investments in more than 50 companies. American Capital has plans to build its global middle-market platform by expanding its presence in Asia.
However, when the recession hit, the company primarily focused on restructuring itself to secure a better position for the future. The global financial crisis hit American Capital hard in 2008 and 2009. The company incurred substantial losses and was severely limited in its ability to access the debt needed to maintain its portfolio.
Management has taken major steps to cut costs in recent years. It entered into talks with creditors in 2009 to restructure more than $2 billion of unsecured debt -- a transaction it closed in 2010. The company has also divested some of its holdings, including child care franchise Primrose Holdings in a sale to Roark Capital; and People Media, which operates about 30 targeted dating websites, to Match.com for $57 million. Other divestitures have included Imperial Supplies, Narus, HomeAway, and Aptara. American Capital received $215 million in 2012 from the sale of portfolio company CIBT Solutions. It also sold portfolio company Paradigm Precision Holdings in 2013 to Dynamic Precision Group for $127 million in debt and equity proceeds.
To raise additional capital, the company offered new shares of itself to institutional investors. Also, one of its top portfolio companies, Mirion Technologies, filed to go public in order to repay its borrowings to American Capital. However, those plans were shelved due to market conditions.
Portfolio company SMG Holdings in 2014 purchased Premier Food Services, which outsources food and beverage services in Southern California.
American Capital's efforts to raise capital and restructure debt were rather successful. The company increased its assets under management and operating income edged up slightly in 2011. That year American Capital made invested more than $315 million to help its existing portfolio companies grow.
Billionaire John Paulson's hedge fund, Paulson & Co., owns about 9% of American Capital.