American Capital Strategies Ltd. (NASDAQ:ACAS) announced today it has invested $16 million in Wausau Financial Systems, a leading provider of fully-bundled software and hardware technology solutions for remittance and check processing.
American Capital's investment takes the form of senior subordinated debt and equity and supports Frontenac Company's acquisition of Wausau and Wausau's primary licensed software developer, Kyris Image Software Inc. Wells Fargo Foothill is investing in senior term debt and is providing a revolving credit facility. Frontenac CEO1st(TM) executive Joseph Delgadillo is Wausau's incoming CEO. He is investing in the equity and, along with Wausau senior management, is participating in an option pool.
American Capital is investing in a high quality niche company with an experienced management team," said COO Ira Wagner. "In addition, we are pleased to add Frontenac Company to the roster of private equity firms with whom we partner. Frontenac is our first new private equity relationship in 2005 and our 21st new private equity relationship since the beginning of 2004."
American Capital invested approximately $2 billion in 2004, approximately $750 million in the fourth quarter of 2004 and $115 million year to date.
"Wausau is a recognised leader of check payment processing solutions in the small to mid-sized bank market," said American Capital principal Ian Larkin. "Led by a highly experienced chief executive, the company is well positioned to capitalise on the increasing need for efficient check processing. Wausau's product offering to address new check processing legislation positions the company well for substantial incremental revenue growth in the near term."
"Wausau provides critical functionality to its customers' core operations and will continue to benefit from the growing recurring maintenance revenue stream generated from its diversified customer base," said American Capital vice president John Cannon. "We look forward to working with the company as it continues to serve its existing customers and focuses its resources on growing markets."
"We are delighted to be working with American Capital," said Frontenac managing director Pat Blandford. "They lived up to their reputation for both speed and efficiency by performing demanding due diligence without compromising the ability to get to a close."