Penn Detroit Diesel Allison, Inc.

New York, NY (July 31, 2006) – Penn Detroit Diesel Allison, Inc. (“PDDA”), of Philadelphia, PA has been recapitalized by Allied Capital Corp. (NYSE – ALD) of Washington, DC in partnership with management. The senior management of PDDA has reinvested a significant share of its proceeds back into the business. Sperry, Mitchell & Company, Inc. initiated this transaction, assisted in the negotiations and served as exclusive financial advisor to Penn Detroit Diesel Allison, Inc.

Penn Detroit Diesel Allison, Inc. (www.penndda.com) is the leading distributor of diesel engines, automatic transmissions, power generator sets, and transport refrigeration units in Pennsylvania and upstate New York. Founded in the 1950s as a distributor of General Motors diesel engines and parts, PDDA is today among the largest authorized domestic distributors of Detroit Diesel engines and parts; Allison Transmission automatic transmissions and parts; Carrier Transicold trailer mobile refrigeration units and parts; MTU/DDC standby power generation units and parts; and GE Jenbacher gas-fired power generators and parts. Headquartered in Philadelphia, PDDA currently operates eight branch locations throughout Pennsylvania and upstate New York that serve the company’s five major OEM product lines. The company distributes new equipment and parts and provides maintenance, repair and overhaul (“MRO”) services to a diverse group of customers, including municipalities, transit authorities, freight handling companies, leasing companies, truck dealers and charter coach companies.

Allied Capital Corp. (www.alliedcapital.com) is a leading business development company with total assets of more than $4 billion. Since its IPO in 1960, Allied Capital has provided long-term debt and equity financing to thousands of middle-market companies. Allied Capital provides flexible, competitive debt and equity capital for management and sponsor-led buyouts, recapitalizations, acquisitions and growth of middle market companies. Allied employs a patient, value-added approach, investing in middle-market companies that seek a long-term financial partner and access to managerial resources often unavailable to smaller companies.

Sperry, Mitchell & Company (www.sperrymitchell.com) is an investment banking firm specializing in middle-market merger and acquisition advisory services. Since the firm’s founding in 1986, Sperry, Mitchell has completed over 250 transactions in a wide range of industries, with values ranging from $10 - $450 million.