European Capital

European Capital Limited Announces Intention to Float

    St. Peter Port, Guernsey (ots/PRNewswire) -

    NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN THE UNITED STATES, CANADA, JAPAN, AUSTRALIA OR THE REPUBLIC OF SOUTH AFRICA OR IN OR INTO ANY OTHER JURISDICTION WHERE SUCH PUBLICATION, DISTRIBUTION OR RELEASE WOULD BREACH ANY APPLICABLE SECURITIES LAW OR REGULATION.

    This announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information in the prospectus to be published by European Capital Limited in due course in connection with the admission of the ordinary shares in the capital of the Company to the Official List of the Financial Services Authority and to trading on London Stock Exchange plc's main market for listed securities (the "Prospectus"). Copies of the Prospectus will, following publication, be available from European Capital Limited's registered office.

    European Capital Limited ("European Capital"), a closed-ended investment company incorporated in Guernsey, announces its intention to proceed with an initial public offering of ordinary shares to certain institutional and other investors (the "Offer"). European Capital intends to seek a secondary listing under Chapter 14 of the Listing Rules of the UK Listing Authority (the "Listing").

    Introduction

    European Capital is a closed-ended investment company incorporated in Guernsey in August 2005 for pan-European equity, mezzanine and senior debt investment. It is managed by European Capital Financial Services (Guernsey) Limited (the "Investment Manager"), a wholly-owned subsidiary of American Capital Strategies, Ltd. ("American Capital"). American Capital is a leading US based investor in equity, mezzanine and senior debt securities and is also the majority owner of European Capital.

    The investment objective of European Capital is to provide investors with dividend income and the potential for share value appreciation by investing in debt and equity investments in private and public companies headquartered predominantly in Europe.

    European Capital seeks to achieve its investment objective through pursuing the following types of investments:

    (i) European Capital Sponsored Buyouts-providing debt and equity financing as the lead investor in the buyout of private and public companies;

    (ii) Mezzanine Direct with Sponsors-providing debt and equity financing for buyouts sponsored by private equity firms where the European Capital Group is either the sole or lead mezzanine debt investor;

    (iii) Syndicated Mezzanine and Senior Debt-providing mezzanine and senior financing for buyouts sponsored by private equity firms where the European Capital Group is neither the sole nor lead mezzanine or senior debt investor; and

    (iv) Direct Investments-providing debt and equity financing directly to private and public companies, which is used for growth, acquisitions or recapitalisations, and investing in structured finance vehicles.

    As at 15 April 2007 the European Capital Group had invested an aggregate of EUR1.6 billion in 45 companies since its establishment in August 2005, of which EUR1.2 billion was invested in 30 companies during 2006. Since its establishment, European Capital has received EUR288 million from refinancing and syndication of senior investments and EUR203 million from repayments and exits. The value of European Capital's investments in portfolio companies as at 15 April 2007 was EUR1.2 billion. As at 31 December 2006, European Capital's net asset value per preferred share of no par value in the capital of the Company (each a "Preferred Share") was EUR9.92 and, as at 15 April 2007, European Capital had paid dividends of EUR37.5 million.

    Investment highlights

    - Europe is the second largest private equity market and the largest mezzanine finance market in the world by amount invested. European Capital and the Investment Manager consider, as a result of a number of factors, that the European mezzanine market represents a prime opportunity for new entrants and that the European buyout market also represents a meaningful opportunity.

    - European Capital expects to benefit from the European presence of the Investment Manager and European Capital Financial Services ("ECFS"), a subsidiary of the Investment Manager. This includes investment teams in London, Paris and Frankfurt with extensive experience in European mezzanine and buyout markets. ECFS expects that over time it will open additional offices in other major European financial centres and also intends to expand its existing investment teams.

    - European Capital's institutional approach, based on the American Capital model, provides it with certain competitive advantages. European Capital is able to invest across a portfolio company's entire capital structure, to provide portfolio companies with long-term financing through its permanent capital base and to respond quickly to potential investments due to its access to European staff and infrastructure. For One-Stop Buyouts(TM), European Capital provides equity, senior debt and mezzanine debt. For One-Stop Financings, European Capital provides all of the senior debt, mezzanine debt and equity co-invest to support an equity sponsor. Also, European Capital can fund itself efficiently through both debt and equity capital resulting in a lower blended cost of capital than traditional private equity firms.

    American Capital overview

    American Capital was founded in 1986 and is a NASDAQ-listed alternative investment asset management company which directly and through managed funds provides senior debt, mezzanine debt and equity to fund growth, acquisitions and recapitalisations. It had approximately $10.9 billion of assets and capital commitments under management as at 31 December 2006.

    The Chairman of European Capital is the founder of American Capital and has been its director, Chief Executive Officer and President since American Capital's inception in 1986, and has been its Chairman other than from August 1997 to August 1998.

    Summary of the Offer

    - Indicative price range of EUR9.84 to EUR12.00 per share, which implies a market capitalisation of approximately EUR1.04 billion to approximately EUR1.27 billion.

    - The Offer is expected to consist of the issue of up to 12.7 million shares, implying a total Offer size of approximately EUR125 million.

    - The Offer may include an over-allotment option from the Company exercisable for a period of up to 30 days from the commencement of conditional dealings, of up to 15% of the shares issued under the Offer.

    Citigroup Global Markets Limited ("Citigroup"), JPMorgan Cazenove Limited ("JPMorgan Cazenove") and Merrill Lynch International ("Merrill Lynch") have been appointed as joint global co-ordinators and joint bookrunners in relation to the Offer.

    NOTES TO EDITORS

    European Capital's investment criteria

    The European Capital Group targets companies that generally meet a combination of the following criteria: a robust track record, strong cash flows, significant growth prospects, strong competitive positioning, an experienced management team with a significant ownership interest and potential for the European Capital Group to gain liquidity and/or realise appreciation in its investments.

    The European Capital Group expects to make investments which are typically between EUR5 million and EUR125 million. European Capital sponsored buyouts would typically be of companies with an enterprise value of between EUR50 million and EUR500 million. The European Capital Group may however participate in co-investments with the American Capital Group in transactions involving companies with a larger enterprise value. The European Capital Group will be leveraged to enhance investment returns.

    Existing Portfolio

    As at 15 April 2007 the largest ten investments held by the European Capital Group were:

      Investment        Trading name of Transaction type
      date
                              Company
      Feb 2007          Delsey                Direct Mezzanine
      Jul 2006          Farrow & Ball    One-Stop Buyout(TM)
      Nov 2005          Eau Ecarlate      Direct Mezzanine
      Oct 2006          Whitworths         One-Stop Buyout(TM)
      Oct 2006          DX Services        Syndicated Mezzanine
      March 2007        Go Voyages         Direct Mezzanine
      Jul 2006          Avery                 One-Stop Buyout(TM)
      Jul 2006          Batisanté          Direct Mezzanine
      April 2006        UPC Norway         Syndicated Mezzanine
      Feb 2007          Gondola              Syndicated Mezzanine

    Notes:

    - The relevant legal entities will be specified in the Prospectus.

    - A "One-Stop Buyout(TM)" involves European Capital providing senior and mezzanine debt and a majority of the equity in the buyout of a company.

    Dividends and dividend policy

    European Capital expects to pay dividends quarterly depending on its level of operating earnings. For 2007, European Capital is targeting a dividend of EUR0.13 per Ordinary Share payable in respect of the third quarter of 2007 and a dividend of EUR0.14 per Ordinary Share payable in respect of the fourth quarter of 2007 from income earned in the second half of 2007. Thereafter, it is anticipated that approximately 50 per cent. of its net operating income will be paid out quarterly in cash dividends, and it is anticipated that 100 per cent. of net capital gains will be retained and redeployed.

    European Capital declared its first dividend, of EUR0.29 per Preferred Share, in the fourth quarter of 2006, which has been paid. The Board of Directors has also declared and paid a further dividend of EUR0.21 per Preferred Share in respect of the first quarter of 2007. The aggregate cash cost to European Capital of these dividends was EUR37.5 million.

    European Capital's dividend target is based on a number of assumptions and should not, therefore, be regarded as a profit or earnings forecast. Certain principal assumptions relating to European Capital's dividend target will be set out in the prospectus. There can be no guarantee that European Capital will be able to pay dividends at such targeted level or at all.

    Management of European Capital's investments

    European Capital and its wholly-owned subsidiaries ECAS SICAR and ECAS Sarl have entered into a new investment management Agreement with the Investment Manager (the "Investment Management Agreement") , under which the Investment Manager is responsible for the management of their investments within the investment strategy determined by the Board of Directors. The Investment Manager is entitled to the payment of certain management fees and to reimbursement of certain fees, costs and expenses under the Investment Management Agreement, and also to a termination fee in respect of the investment management agreement which applied prior to Listing.

    The Investment Manager

    As at 31 December 2006, the Investment Manager had assets under management (at fair value) of EUR1.1 billion, all of which were managed on behalf of the European Capital Group. At present, the Investment Manager only manages the investments of the European Capital Group and ECFS currently only operates to assist the Investment Manager. ECFS is authorised and regulated in the UK by the FSA.

    ECFS has offices in London, Paris and Frankfurt and has a total of 68 employees. ECFS' London office has 45 employees and is headed by two managing directors, Ms. Nathalie Faure Beaulieu and Mr. Simon Henderson. The Paris office of ECFS has 21 employees and is headed by managing director Mr. Jean Eichenlaub. Mr. Roland Cline, another managing director, is also located in the Paris office. The Frankfurt office of ECFS' has two employees and is headed by managing director Mr. Robert von Finckenstein, who started work for ECFS on 2 April 2007.

    The five managing directors have over 50 years of combined experience in the private equity industry.

    ECFS intends in due course to open an office in Madrid. The Investment Manager is actively searching for an investment professional to lead a new office in Madrid. ECFS expects that over time it will open additional offices in other major European financial centres. ECFS also intends to recruit additional investment professionals for its London and Paris offices within the next few months and to expand its existing Investment Teams.

    The contents of this announcement, which has been issued by European Capital and is the sole responsibility of European Capital, has been approved by JPMorgan Cazenove solely for the purpose of section 21 of the Financial Services and Markets Act 2000, as amended.

    Citigroup, JPMorgan Cazenove and Merrill Lynch, each of which is authorised and regulated in the UK by the Financial Services Authority, are advising European Capital and no one else in connection with the Offer, the contents of this announcement and any matter referred to herein, and will not be responsible to anyone other than European Capital for providing the protections afforded to the respective customers of Citigroup, JPMorgan Cazenove and Merrill Lynch nor for providing any advice in relation to the Offer, the contents of this announcement or any matters referred to herein.

    This announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information in the Prospectus. Copies of the Prospectus will, following publication, be available from the offices of Citigroup at 33 Canada Square, Canary Wharf, London E14 5ZB and at the registered office of European Capital at First Floor, Dorey Court, Admiral Park, St Peter Port, Guernsey GY1 6HJ.

    This announcement (or any part of it) and the information contained herein is not to be reproduced, published, distributed, passed on, or the contents otherwise divulged, directly or indirectly, in or into the United States, Canada, Australia, Japan or the Republic of South Africa, or any other jurisdiction where such reproduction or distribution would be unlawful, and does not constitute, or form part of, an offer of securities for sale into the United States, Canada, Australia, Japan or the Republic of South Africa, or any other jurisdiction. This announcement does not constitute or form part of an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, exemption from registration or qualification under the securities law of any such jurisdiction.

    The shares to be offered in the Offer have not been, and will not be, registered under the US Securities Act of 1933, as amended, or under the US Securities Exchange Act of 1934, as amended, or with any securities regulatory authority of any state or other jurisdiction in the US for offer or sale as part of their distribution and may not be offered or sold in the US except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable state securities laws. There will be no public offering of the securities in the United States.

    Securities in European Capital have not been and will not be registered under the applicable securities laws of Australia, Canada, Japan or the Republic of South Africa and, subject to certain exceptions, may not be offered or sold within Australia, Canada, Japan or the Republic of South Africa.

    The Offer and the distribution of this announcement and other information in connection with the Offer in certain jurisdictions may be restricted by law and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

    The price and value of, and income from, shares may go down as well as up. Potential investors should consult a professional adviser as to the suitability of the Offer for the individual concerned.

    This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities and any purchase of or application for securities of the Company pursuant to the Offer should only be made on the basis of the information contained in the Prospectus. This announcement does not constitute a recommendation concerning the Offer. The price and value of securities may go down as well as up. Persons needing advice should contact a professional adviser.

    This announcement includes statements that are, or may be deemed to be, 'forward-looking statements'. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms 'believes', 'estimates', 'plans', 'projects', 'anticipates', 'expects', 'intends', 'may', 'will', or 'should' or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts and include statements regarding European Capital's intentions, beliefs or current expectations concerning, among other things, European Capital's results of operations, financial condition, liquidity, prospects, growth and strategies.

    By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements including, without limitation, the factors to be described in the risk factors section of the Prospectus and the factors to be described in the operating and financial review section of the Prospectus.

    Forward-looking statements may and often do differ materially from actual results. Any forward-looking statements in this announcement reflect European Capital's view with respect to future events as at the date of this announcement and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to European Capital's operations, results of operations, growth strategy and liquidity. Save as required by law or by the Listing Rules, Disclosure and Transparency Rules or Prospectus Rules of the Financial Services Authority, European Capital undertakes no obligation publicly to release the results of any revisions to any forward-looking statements in this announcement that may occur due to any change in its expectations or to reflect events or circumstances after the date of this announcement.

    In connection with the Offer, Citigroup Global Markets Limited, or any of its agents, may (but will be under no obligation to), to the extent permitted by law, over allot or effect other transactions intended to enable it to satisfy any over allotments or which stabilise, maintain or otherwise affect the market price of shares in European Capital (the 'Shares') at levels which might not otherwise prevail in the open market. However, Citigroup is not required to enter into such transactions. Such transactions may be effected on the London Stock Exchange and any other securities market, over the counter market or otherwise and, if commenced, may be discontinued at any time.

    Information in this announcement or any of the documents relating to the Offer cannot be relied upon as a guide to future performance.

    Stabilisation/FSA

ots Originaltext: European Capital
Im Internet recherchierbar: http://www.presseportal.ch

Contact:
Enquiries to: European Capital Limited, +1-(301)-951-6122, John
Erikson, CFO American Capital, Tom McHale, SVP Finance American
Capital



Weitere Meldungen: European Capital

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