Form: PRER14A

Preliminary revised proxy soliciting materials

July 2, 2001

PRER14A: Preliminary revised proxy soliciting materials

Published on July 2, 2001


SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

FILED BY THE REGISTRANT [ x ]

Filed by a Party other than the Registrant [ ]

Check the appropriate box:

[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))

[ ] Definitive Proxy Statement

[ ] Definitive Additional Materials

[X] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

SUNSOURCE INC.
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(Name of Registrant as Specified in Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.

(1) Title of each class of securities to which transaction applies:

- --------------------------------------------------------------------------------

(2) Aggregate number of securities to which transaction applies:

- --------------------------------------------------------------------------------

(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

- --------------------------------------------------------------------------------



(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

- --------------------------------------------------------------------------------

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date
of its filing.

(1) Amount previously paid:

- --------------------------------------------------------------------------------

(2) Form, schedule or registration statement no.:

- --------------------------------------------------------------------------------

(3) Filing party:

- --------------------------------------------------------------------------------

(4) Date filed:

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[ALLIED CAPITAL LOGO]


ALLIED CAPITAL ELECTS CASH OPTION FOR SUNSOURCE ACQUISITION

WASHINGTON, DC - JULY 2, 2001 -- Allied Capital Corporation (NYSE: ALD) and
SunSource Inc. (AMEX: SDP & SDP.PR) reported today that Allied Capital has
elected the cash option to complete its previously announced acquisition of
SunSource, Inc. ("SunSource" or the "Company").

Allied Capital will pay $10.375 per SunSource common share for all of the
outstanding common equity of SunSource. Management of SunSource will participate
with Allied Capital in the buyout transaction.

Necessary approvals to complete the transaction include an affirmative vote of
SunSource shareholders. SunSource's publicly traded trust preferred securities
will remain outstanding, and will not be converted or exchanged and will
continue to trade on the AMEX under the symbol SDP.PR, upon consummation of the
merger.

ABOUT ALLIED CAPITAL
Allied Capital is the nation's largest business development company, and
provides long-term investment capital to support the expansion of growing
middle-market companies. The company provides mezzanine debt and equity
financing, and also participates in the real estate capital markets as an
investor in commercial mortgage-backed securities.

The company is headquartered in Washington, DC. For more information, please
visit the web site at www.alliedcapital.com, call Allied Capital Investor
Relations toll-free at (888) 818-5298, or e-mail us at ir@alliedcapital.com.

ABOUT SUNSOURCE INC.
SunSource Inc. has two principal businesses, one focused on retail markets and
the other on industrial customers. The retail business comprises The
Hillman Group, Inc., including the recently acquired Axxess Technologies
business, which sells to hardware stores, home centers, pet suppliers, mass
merchants, and other retail outlets principally across North and South America.

Their product line includes thousands of small parts such as fasteners and
related hardware items, keys, and identification items such as tags, letters,
numbers, and signs. Services offered include design and installation of
merchandising systems and maintenance of appropriate in-store inventory levels.

SunSource serves the industrial market with two companies. SunSource Technology
Services provides engineering, repair, and fabrication services as well as parts
and equipment to manufacturers throughout the U. S. and Canada.

The Company's Kar Products affiliate distributes maintenance and repair parts
and offers customized inventory management services to commercial and industrial
customers of all sizes in the U.S. and Canada.

ADDITIONAL INFORMATION
SunSource has filed with the SEC a copy of the Agreement and Plan of Merger
dated as of June 18, 2001 by and among Allied Capital Corporation, Allied
Capital Lock Acquisition Corporation and SunSource Inc. on Form 8-K dated June
18, 2001.

SunSource, Inc. plans to file with the SEC a proxy statement on Schedule 14A. In
connection with the merger, SunSource expects to mail a proxy statement to its
shareholders, which contains important information about the merger. SunSource
shareholders are urged to read the proxy statement and any other relevant
documents filed with the SEC.

The proxy statement will contain important information about Allied Capital,
SunSource, the persons soliciting proxies in connection with the merger, and
related transactions. Once filed with the SEC, the proxy statement will be
available free of charge on the SEC website at http://www.sec.gov/" and from
the contacts listed on this press release.

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[ALLIED CAPITAL LOGO]




In addition to the proxy statement, Allied Capital and SunSource file annual,
quarterly and special reports and other information with the SEC. You may read
and copy any reports filed by Allied Capital and SunSource at the SEC public
reference rooms or on the SEC website. Copies of such reports can also be
obtained from Allied Capital and SunSource.

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 the company's periodic filings with the Securities and Exchange
Commission.

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