American Capital Strategies' Latest Investment

American Capital Strategies has made its third investment in four years in Dallas-based TransFirst Holdings, which processes transactions for 155,000 merchants across the United States. The latest round of financing is for $50 million, American Capital said in a statement.

Bethesda-based American Capital bills itself as the largest publicly-held, private equity firm in the country. But we also know American Capital's business by a less sexy name than private equity. It's called a business development company. BDCs are vehicles established by Congress to help fund small and mid-sized companies around the country. Another prominent Washington-area BDC is Allied Capital.

Founded in 1986 by Malon Wilkus, American Capital recently joined the the S&P 500 and has $15 billion under management. The company pays a mean dividend, with a yield just shy of 8 percent based on Tuesday's closing price of $45.28.

American Capital has invested directly and through its funds under management more than $6.5 billion year to date, including $306 million this quarter. Not including funds under management, American Capital has invested more than $4.7 billion year to date, including $170 million this quarter.

The company first invested in TransFirst in April 2004 when TransFirst bought a division of Fifth Third Bank. Last year, American Capital put more money into TransFirst to support a recapitalization.

Founded in 1995, Dallas-based TransFirst is a provider of a complete line of merchant credit and debit transaction processing services, including transaction authorization, transaction data capture and transmission, merchant reporting, merchant acceptance, transaction settlement and clearing, real-time transaction monitoring and transaction charge-back solutions.

In addition to Dallas headquarters, TransFirst has facilities in Colorado, Nebraska, Kansas, Wisconsin and California and employs more than 560.
-- Thomas Heath

By Mike Shepard  |  July 17, 2007; 7:21 PM ET  | Category:  Finance
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