Allied Capital Completes Sale of a Majority Interest in Advantage Sales & Marketing to J.W. Childs Associates and Merrill Lynch Global Private Equity; Realizes $430 Million Gain on Investment.

WASHINGTON -- Allied Capital Corporation (NYSE:ALD) and Advantage Sales & Marketing, Inc. ("Advantage") announced today that the sale of a majority equity interest in Advantage to an affiliate of J.W. Childs Associates, L.P. and Merrill Lynch Global Private Equity has been completed. Allied Capital and Advantage management have retained equity investments in the business as minority shareholders. The sale was originally announced on March 2, 2006 and closed on March 29, 2006.

Advantage was sold for an enterprise value of $1.05 billion, subject to post-closing adjustments, and Allied Capital realized a gain on its equity investment of approximately $430 million, also subject to post-closing adjustments. As consideration for the common stock sold in the transaction, Allied Capital received a $150 million subordinated note, with the balance of the consideration paid in cash. Approximately $34 million of Allied Capital's cash proceeds are subject to certain holdback provisions. Allied Capital was also repaid its $184 million in subordinated debt outstanding.

About Allied Capital

Allied Capital Corporation, a leading business development company with total assets of more than $4 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 that generate aggregate revenues of more than $10 billion and employ more than 85,000 people.

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 [phone], or e-mail us at [e-mail]. All media inquiries should be directed to Stan Collender at [phone].

About Advantage Sales & Marketing

Advantage Sales & Marketing is a leading sales and marketing agency in the U.S., providing outsourced sales, merchandising, and marketing services to manufacturers, suppliers, and producers of consumer packaged goods. The company manages thousands of food and non-food products on behalf of a client base comprised of more than 1,200 manufacturers. Advantage has operations throughout the United States and Canada. For more information, please visit the company's website at www.asmnet.com.

About J.W. Childs Associates, L.P.

J.W. Childs Associates, L.P. is a private equity firm based in Boston, Massachusetts specializing in leveraged buyouts and recapitalizations of middle-market growth companies. Since 1995, JWC has completed investments with a total transaction value in excess of $9.0 billion. JWC currently invests through J.W. Childs Equity Partners III, L.P., an investment fund with total committed capital of $1.75 billion. For more information, please visit J.W. Childs Associates, L.P.'s website at www.jwchilds.com.

About Merrill Lynch Global Private Equity

Merrill Lynch Global Private Equity is the private equity arm of Merrill Lynch & Co., Inc. Merrill Lynch is one of the world's leading wealth management, capital markets and advisory companies, with offices in 36 countries and territories and total client assets of approximately $1.8 trillion. As an investment bank, it is a leading global trader and underwriter of securities and derivatives across a broad range of asset classes and serves as a strategic advisor to corporations, governments, institutions and individuals worldwide. Through Merrill Lynch Investment Managers, the company is one of the world's largest managers of financial assets. Firm wide, assets under management total $544 billion. For more information on Merrill Lynch, please visit www.ml.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 these factors are enumerated in Allied Capital's filings with the Securities and Exchange Commission.