American Capital Invests in Recapitalization of Medical Billing and Collection Firm

American Capital Strategies Ltd. announced today it has invested in the recapitalization of Marina Medical Billing Service Inc., a leading provider of revenue cycle management services for hospital emergency department physician groups. American Capital’s investment takes the form of a senior term loan, senior and junior subordinated debt and convertible preferred and common equity. American Capital is also providing a revolving credit facility. Led by Marsha Besley, Founder and President, and Michael Connellan, CEO, Marina’s senior management team will continue to be key shareholders with convertible preferred and common equity positions.

“We are delighted to be making this investment in Marina Medical Billing Service, a highly respected provider of revenue cycle management services to hospital emergency department physician groups,” said American Capital Regional Managing Director Brian Graff. “We are also pleased to be partnering with a distinguished management team that is committed to the long term future with Marina and has established a scaleable business model, driving the Company’s steady growth and geographic expansion.”

American Capital has invested $5 billion in the last twelve months, approximately $3.5 billion year to date and $1 billion quarter to date. These amounts do not include American Capital’s unfunded equity commitment and debt funded to its affiliate European Capital.

“Marina has earned a superior reputation for service and high collection rates in an industry where reputation is the number one criterion used in choosing billing partners. This reputation has allowed Marina to attract a steady stream of new customers and through its excellent service, the Company maintains a very high retention rate among existing customers,” said American Capital Managing Director Jon Isaacson. “With its wide experience in the highly variable billing practices of private, state and federal payors and its successful penetration of characteristically tight knit emergency department communities, Marina has established a strong presence in this market niche.”

“Marina is a standout participant in the highly specialized area of revenue cycle management for hospital emergency departments, one of the most rapidly growing areas in the medical industry due to the aging population and the rising costs of critical medical care,” said American Capital Vice President Eugene Krichevsky. “The Company has historically grown on the strength of its excellent reputation, and now expects accelerated growth throughout the country as it places a greater emphasis on proactive business development efforts.”

Marina Medical Billing Service, founded in 1981, is a provider of billing and collection services to hospital emergency department physician groups and physician practice management companies in six states. The Company’s services include coding, preparing and submitting claims for insurance reimbursement, mailing patient billing statements and coordinating cash collections. Marina is headquartered in Cerritos, CA and employs nearly 400 people. In 2006, Marsha Besley, Marina Founder and President, won the Ernst & Young/Orange County Business Journal Entrepreneur of the Year award.

“We’re extremely happy to have American Capital join us as an equity investor and lender,” said Marina Medical Billing Service CEO Mike Connellan. “We looked carefully for a financial partner who would share our 25 year commitment to quality and service to emergency medicine and who had the resources to help us for many years to come. Successfully completing this recapitalization increases our capacity to invest capital in our business, leveraging our capabilities and established infrastructure to expand so we can ultimately better serve our clients.”