Allied Capital Invests $39.8 Million in Service Champ Inc.

    Business Editors

    WASHINGTON--(BUSINESS WIRE)--April 26, 2005--Allied Capital Corporation (NYSE:ALD) announced that it has partnered with management of Service Champ Inc. and completed a recapitalization of the Company. Allied Capital's investment in Service Champ totaled $39.8 million. Headquartered in Chalfont, PA, Service Champ is a leading wholesale distributor of parts and equipment to the quick lube industry. The company distributes substantially all the non-petroleum products used by a quick lube center, maintaining over 7,000 SKUs and servicing over 5,000 active customers nationwide.
    "Service Champ is the dominant player among quick lube distribution companies, and has built a reputation for service, value and on-time delivery," said Dan Russell, Managing Director of Allied Capital. "We are excited to have partnered with Service Champ co-founders Fred and Marc Berman, who are experienced operators in the industry. The recapitalization of Service Champ represents a strategic investment for Allied Capital within the business services sector," added Russell.
    "Having Allied Capital as our partner, with its patient capital and breadth of resources, is a real advantage for our company," stated Fred Berman, President of Service Champ. "This recapitalization strengthens our balance sheet and will assist us in executing our growth strategy going forward."
    As a result of the recapitalization, Allied Capital received subordinated notes and a majority equity position in Service Champ. Management continues as a significant equity holder in the business.

    About Allied Capital

    Allied Capital Corporation, a leading business development company with total assets of more than $3 billion, has paid regular, quarterly cash dividends to shareholders since 1963. Allied Capital invests in the American entrepreneurial economy by providing capital to companies seeking a long-term financial partner and access to managerial resources often unavailable to smaller companies. Since its IPO in 1960, the Company has provided long-term debt and equity financing to thousands of middle market companies. In serving its shareholders, Allied Capital helps build middle market businesses and support American jobs. The Company's private finance portfolio includes investments in over 100 companies with aggregate revenues of approximately $11 billion, supporting more than 100,000 jobs.
    Headquartered in Washington, DC, Allied Capital offers shareholders the opportunity to participate in the private equity industry through an investment in the Company's New York Stock Exchange-listed stock, which is traded under the symbol ALD. For more information, please visit www.alliedcapital.com, call Allied Capital investor relations toll-free at (888) 818-5298, or e-mail us at ir@alliedcapital.com.

    About Service Champ Inc.

    Founded in 1984, Service Champ is the premier distribution company providing parts and equipment to the quick lube industry. The company distributes oil filters, air filters, wiper blades, gaskets, drain plugs, and numerous other parts and equipment through its network of six distribution facilities nationwide. Service Champ's management team has been together for over fifteen years and has built a culture that is focused on reliability, ease of delivery, and a value-driven approach to customer service. The Company has been named "Vendor of the Year" multiple times by both the Automotive Oil Change Association and the Jiffy Lube Association of Franchisees. The company employs nearly 200 people nationwide. More information on the company can be found at www.servicechamp.com.

    Forward-Looking Statements

    The information contained in this press release contains forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results and conditions to differ materially from those projected in these forward-looking statements, and some of these factors are enumerated in Allied Capital's periodic filings with the Securities and Exchange Commission.

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CONTACT: Allied Capital Corporation Dale Lynch, 202-973-6344 or Media Contact: Financial Dynamics Stan Collender, 202-434-0601

KEYWORD: PENNSYLVANIA DISTRICT OF COLUMBIA INDUSTRY KEYWORD: BANKING MARKETING AGREEMENTS SOURCE: Allied Capital Corporation

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