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American Capital (ACAS) Reports Q3 Earnings; Agrees to Acquire European Capital; Suspends Dividend Payment
American Capital, Ltd. (Nasdaq: ACAS) reports Q3 EPS of $0.74, 5 cents better than the analyst estimate of $0.69.
American Capital and European Capital entered into an implementation agreement regarding American Capital's proposal to acquire all of the ordinary shares of European Capital held by other investors by means of a scheme of arrangement provided for under Guernsey company law. Terms of the agreement call for each European Capital shareholder to receive 0.333 American Capital shares of common stock for every one ordinary share of European Capital. Based on the closing price of American Capital common stock on November 7, 2008, this represents total consideration of $158 million for the 32.3% of European Capital's outstanding ordinary shares not already owned by American Capital, or a price of $4.59 per ordinary share of European Capital. This implies a total market capitalization of $490 million and a total enterprise value of $2.0 billion. American Capital currently owns 67.7% of European Capital.
The company also said that it will pay no further dividends for the remainder of 2008.
American Capital, Ltd., formerly known as American Capital Strategies, Ltd., is a principal investment firm specializing in management and employee private equity buyouts, acquisitions, recapitalizations, mergers and acquisition, add-on acquisitions, securitizations, special situations, growth capital investments.
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