Private placement volume surges; Energy Conversion plans $87.8 million deal

By Sheri Kasprzak

Atlanta, Feb. 10 - Private placement volume in the United States and Canada recovered as oil made gains and stocks recovered.

"Stocks are up, issuers have a bit more confidence, I think, in the market, and so we're seeing more deals," said one sell-side source. "As long as mergers and acquisitions are being done and the stock market looks good, there will be deals."

The Dow Jones Industrial Average jumped 85.80 Thursday to close at 10,749.61; the Nasdaq composite index ended up 0.55 at 2,053.10 and the S&P 500 gained 5.02 to close at 1,197.01.

A surge in oil prices helped Canadian issuers somewhat, according to one Canadian market source.

"Of course it did help," said the source. "There were a few oil companies out there today and higher oil is always good for those issuers."

Oil and natural gas companies like Orleans Energy Ltd. and Defiant Resources Corp. benefited from higher oil Thursday. Orleans announced its plans to raise C$12 million in a private placement and Defiant said it will raise C$7.52 million.

Oil prices climbed $1.64 Thursday to end at $47.10.

Private placement news in the United States was led Thursday by a $87,802,500 offering from Energy Conversion Devices, Inc.

The offering includes 5.09 million shares at $17.25 each.

The deal is being conducted for subsidiary ECD Ovonics.

Based in Rochester Hills, Mich., the ECD Ovonics is a technology company in the energy and information fields focused on making new products from amorphous, disordered and related materials. The company plans to use the proceeds from the deal to double its manufacturing capacity of its United Solar Ovonic's triple-junction, thin-film amorphous silicon photovoltaic products and exercise an option to buy 4,376,633 of its shares at $4.55 each currently held by TRMI Holdings Inc. The remainder will be used for general corporate purposes.

The company's stock closed down $1.57 at $18.18 Thursday, but climbed $0.05 to $18.23 in after-hours trading.

Quixote wraps $40 million deal

Quixote Corp. said it has closed the private placement of 7% convertible senior subordinated notes for $40 million.

The notes are due Feb. 15, 2025 and are convertible into common shares at $25.90 each, or a 40% premium over the company's stock on Feb. 8. The notes, if fully converted, will convert into 1,544,000 common shares.

"By strengthening our capital structure, this transaction fits in well with our near- and long-term initiatives and operational goals," said Leslie Jezuit, the company's chairman and chief executive officer of Quixote, in a statement.

"The proceeds of this financing will be immediately used to pay down our term and revolving credit facilities with our banks and we expect to renegotiate our bank credit arrangement on more favorable terms to provide us additional financial flexibility. We believe this will position us well as our market and industry conditions improve."

Piper Jaffray & Co. and Harris Nesbitt Corp. were the placement agents.

Based in Chicago, Quixote, through subsidiaries Quixote Transportation Safety, Inc. and Quixote Transportation Technologies, Inc., produces highway crash cushions, electronic wireless measuring and sensing devices, weather forecasting stations, computerized highway advisory radio transmitting systems and other highway safety products. The proceeds from the private placement will be used to reduce bank debt.

Quixote's stock closed down $0.17 at $18 Thursday.

Insignia closes two deals

Insignia Solutions plc wrapped up two private placements Thursday - one a $12 million equity line and the other a $1.3 million stock offering.

The company received the $12 million equity line from Fusion Capital LLC. The line allows Insignia to sell stocks periodically over 30 months to Fusion at a price based on the market price at the time of purchase.

Fusion will also received warrants for 4 million American depositary shares, as a commitment fee.

The equity line proceeds will be used to develop the company's over-the-air mobile device management products.

"Fusion has been a great supporter of Insignia since 2002 with a total funding under our previous agreement in excess of $5 million," said Insignia's chief executive officer Mark McMillan in a statement. "We are pleased to have the opportunity to enter into this new agreement and look forward to working with them in the future."

In its second offering, Insignia drew $1.3 million of its previous equity line with Fusion as part of its acquisition of mi4e Device Management AB, a private company based in Stockholm.

The company sold 3,220,801 American depositary shares at $0.40 each to Fusion Capital.

Insignia, based in Freemont, Calif., provides mobile devices to mobile operators and terminal manufacturers.

The company's stock closed up $0.04 at $0.75 on Thursday.

LitFunding gets equity line

LitFunding Corp. received a $10 million in an equity line from Dutchess Private Equities Fund II LP.

The company may sell shares to Dutchess at a 4% discount to market price over the course of 36 months.

"This added line of credit gives us the confidence to move forward with our business strategy and establish a deeper footprint in the litigation funding market," said LitFunding's founder and chief executive officer Morton Reed in a statement. "We are pleased with the terms of the agreement and look forward to forthcoming growth and expansion that this funding will allow us to achieve."

Based in Las Vegas, LitFunding is a wholly owned subsidiary of LitFunding USA. It provides funding for litigation through plaintiff's attorneys.

On Thursday, LitFunding's stock closed unchanged at $0.56.

Access Integrated raises $7.6 million

As part of its efforts to acquire Brooklyn, N.Y.,'s Pavilion Theater, Access Integrated Technologies, Inc. has raised $7.6 million in a private placement.

The company received agreements from institutional investors for four-year convertible debentures. The debentures bear interest at 7% and are convertible into common shares at $4.07 each.

The investors will also receive warrants for up to 560,197 class A shares at $4.44 each for five years, beginning Sept. 9.

"With the completion of this financing, AccessIT will be able to take a historic step forward by purchasing the Pavilion Theater complex," said Bud Mayo, the company's chief executive officer, in a statement.

"The Pavilion is a unique theater and a valuable asset. We anticipate this acquisition will generate revenues of up to $5 million per year and produce substantial cash flow and to enable AccessIT to showcase its wide range of products and services for the motion picture entertainment industry. We look forward to having the ability to demonstrate the value to the industry, of a state-of-the-art, fully digitally equipped theater and to completing the planned addition of a ninth screen by the seller."

Based in Morristown, N.J., Access Integrated is a storage and delivery service provider for owners and distributors of movie theaters and other venues. The company plans to use the proceeds to complete its previously announced purchase of the Pavilion Theater. The remainder will be used for working capital.

Access Integrated's stock soared $0.50 to close at $4.30.

Breaker's stock dips

After announced the upsizing of a C$13,166,000 private placement C$13,166,000, Breaker Energy Ltd.'s stock initially jumped, but suffered losses Thursday.

The company's stock dipped C$0.04 to end at C$3.45 Thursday. On Wednesday, the company's stock ended up C$0.34 to close at C$3.49.

On Tuesday, when the offering and the exercise of the greenshoe were announced, Breaker's stock dropped C$0.05 to end at C$3.15.

The company plans to sell common shares at C$2.90 each and flow-through shares at C$3.50 each.

A greenshoe was exercised on the deal, which was originally announced as a C$10.15 million offering.

Breaker Energy, based in Calgary, Alta., is an oil and gas company.

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