Atlas Energy pockets $600 million from unit sale; DCP secures $100 million from PIPE

By Sheri Kasprzak

New York, May 21 - Two natural gas companies topped PIPE news to kick off the week. The deals were led by Atlas Energy Resources, LLC with a $600 million unit offering conducted as part of an acquisition.

The other deal, a $100 million offering of units from DCP Midstream Partners, is also being conducted as part of an acquisition.

"It does seem like the bigger the deal, the more likely it is that it's linked to an acquisition or a merger of some sort," said one sellside market source. "It stands to reason that you're going to need a bigger chunk of money at one time in order to finance something like that, and PIPEs are a quick, efficient way to get that capital."

The Atlas offering is being conducted as part of the company's planned $1.225 billion acquisition of DTE Gas & Oil Co. The acquisition is set to close June 30.

The placement and acquisition were announced Monday morning, and by 9:50 a.m. ET, Atlas' stock had jumped 18.32%, or $5.66. By the end of the day, the stock was up $4.55, or 14.52%, to end at $35.45 (NYSE: ATN). The stock gained another 46 cents in after-hours trading.

Terms of placement

In the placement, Atlas issued 24 million class D units at $25.00 each to institutional investors led by Magnetar Capital. The price per unit is a 19% discount to the company's $30.90 closing stock price on Friday.

The units are convertible on a one-for-one basis for common units.

UBS Investment Bank was the placement agent for the offering.

Also connected to the acquisition, the company received an $850 million senior secured revolving credit facility from JPMorgan Chase Bank, NA that will be used to fund the remainder of the purchase price.

"This acquisition is a transformative event for our company," said Edward E. Cohen, the company's chief executive officer, in a statement. "We will more than quadruple Atlas Energy's proved reserve base to almost 800 Bcfe [billion cubic feet equivalent] and triple our average net daily production to approximately 88 Mmcfe [million cubic feet of natural gas equivalent].

"These assets will provide even greater stability to our company's existing reserve base and will enable us to materially increase our distributions to unitholders."

Pittsburgh-based Atlas is an energy company focused on the development and production of natural gas and oil.

DCP's offering

In other natural gas-related news, DCP Midstream Partners announced its plans to settle a $100 million offering of common units.

That deal is also part of an acquisition. DCP is in talks to acquire the subsidiaries of Momentum Energy Group, Inc. from DCP Midstream, LLC.

The terms of the offering have not been released but news of the deal and the acquisition sent the company's stock up 23 cents to close at $44.00 (NYSE: DPM).

Under the terms of the acquisition, DCP Midstream Partners plans to buy, for an expected $165 million, the subsidiaries of Momentum Energy Group, Inc. that are currently owned by DCP Midstream, LLC. Closing of the deal is contingent upon the completion of the acquisition.

Proceeds from the deal will be used to fund a portion of the acquisition price.

DCP Midstream Partners, based in Denver, is a natural gas and natural gas liquids transportation company.

Unicorp raises $3.5 million

In other resources-related offerings, Unicorp, Inc. wrapped a $3.5 million tranche of a planned $7 million private placement of 9% convertible debentures.

Cornell Capital Partners, LP was the investor in the debentures, which are convertible into common shares at $0.50 each and are due November 2009.

In the first closing, Cornell received warrants for 8,121,500 shares. Of the warrants, 2.545 million are exercisable at $0.55 each for five years; 2.154 million at $0.65 each for five years; 1.867 million at $0.75 each for five years; and 1,555,500 at $0.90 each for five years.

"We have had a good relationship with Cornell over the past year and a half of which they have funded us approximately $7.8 million," said Kevan Casey, CEO of Unicorp, in a news release.

"We believe that this new funding will have less selling pressure on our stock and will allow us the option to pay the debenture in cash if our stock is less than the conversion price of $0.50."

On Monday, the stock fell by a penny to close at $0.36 (OTCBB: UCPI).

Houston-based Unicorp is an oil and natural gas exploration company.

SumTotal to raise $35.1 million

In other PIPE news, SumTotal Systems, Inc. secured $35.1 million from a registered direct placement of stock.

A group of institutional investors, many of which are new, plan to buy 5.4 million shares at $6.50 each.

The shares are being sold under the company's shelf registration.

The deal is expected to wrap up on May 23.

RBC Capital Markets is the placement agent.

"This transaction will be used for general corporate purposes, to potentially repay or prepay our debt and/or investments and acquisitions," said Don Fowler, the company's CEO, in a statement.

"The additional cash will provide greater working capital and position us to grow within our core learning and performance-management business and to expand into other areas of talent management."

The company's stock gained 44 cents, or 6.13%, to settle at $7.62 on Monday (Nasdaq: SUMT).

Based in Mountain View, Calif., SumTotal Systems is a talent and learning-management company.

Jingwei raises $16.98 million

Finally, Jingwei International Ltd. wrapped a $16.975 million private placement of units as part of its reverse merger.

The company sold 3.395 million units of one share and one warrant for three-tenths of a share at $5.00 apiece. The whole warrants are exercisable for four years at $6.00 each.

The investors in the deal include Centurion Investments Ltd., Sidford International Ltd., Charmfield Ltd., Du Jian Guo, Guo Qiang, Meng Fu Ying and Sun Yan Yan.

CRT Capital Group, LLC was the placement agent.

The offering was conducted as part of a reverse merger with Neoview Holdings, Inc.

In the reverse merger, new shares of Neoview were exchanged for shares held by Jingwei. Shareholders of Jingwei now own 87% of Neoview's shares on a fully diluted basis, and Jingwei is now a wholly owned subsidiary of Neoview. Neoview will change its name to Jingwei International Ltd.

Based in Shenzhen, China, Jingwei International is a software and data-mining services company.

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