Doral plans $600 million financing for acquisition, growth; American Capital eyes $295 million

By Stephanie N. Rotondo

Portland, Ore., April 19 - Mining and resource companies remained the top PIPE issuers Monday, but it was financials that brought the day's largest financings.

Doral Financial Corp. announced its plans to raise $600 million. The bank holding company will sell some combination of common and preferred shares to raise the funds, which will be used, in part, to fund a potential acquisition.

American Capital Ltd. meantime said it was seeking $295 million from a registered direct offering of stock. According to an analyst that covers the asset manager, the transaction is part of the company's previously announced debt restructuring.

Meanwhile, Excelsior Energy Ltd. said it will pocket up to C$20 million from two private placements. The company will seek up to C$15 million from a private sale of units and the remaining C$5 million from a non-brokered placement of equity.

Saxon Oil Co. Ltd. settled a private deal, taking in just over C$9.5 million. According to a company spokesperson, the transaction brought in a new investor group.

Also, Bovie Medical Corp. intends to raise $3 million via a private placement of stock. The company will also issue warrants to participating investors.

Cymat Technologies Ltd. closed on C$2.74 million, which it raised from a private placement of units and subscription receipts. The company intends to use the funding to advance its business.

Doral plans $600 million financing

San Juan, Puerto Rico-based Doral Financial plans to raise $600 million via private placement, the company said in a press release.

The bank holding company will sell a combination of common shares and non-voting, mandatorily convertible preferred shares.

Of the proceeds it hopes to raise, Doral will use $180 million as permanent capital to support the company's capital position and growth. The proceeds would be used for an FDIC-assisted acquisition.

The remaining $420 million is contingent upon completing the acquisition. Should the transaction fail, the funds would be returned to investors.

Doral said that the securities sold in the financing will have an effective sale price of $4.75 per common share equivalent if the acquisition is completed or $3.00 per common share equivalent if the acquisition does not occur and the escrow is released.

"We are pleased with this offering and the confidence we've received from both existing shareholders and new institutional investors," remarked Glen Wakerman, chief executive officer, in the release. "The result of the new capital coming to Doral allows us to continue to strengthen our institution."

Doral's equity (NYSE: DRL) dropped 82 cents, or 12.93%, to $5.52. Market capitalization is $433.67 million.

American Capital brings placement

American Capital will conduct a $295 million registered direct offering of equity, the company said in a press release.

The Bethesda, Ma.-based private equity firm and global asset manager said it will issue 58.3 million common shares at $5.06 per share. Approximately 43.72 million of those shares will be sold to funds and accounts managed by Paulson & Co. Inc.

The company did not return calls seeking comment on the financing, but Troy Ward, a senior analyst at Stifel, Nicolaus & Co. Inc., did voice his opinion to Prospect News.

"It's a mixture," Ward said when asked if he felt the financing was good or bad. "Clearly, it helps relieve near-term pressure to sell assets to pay down debt."

War explained that American Capital has been in default on its debt since early 2009. In November 2009, the company began a debt restructuring, to which nearly all of its lenders agreed.

"This probably helps them get that debt restructuring done," he said. "We would guess that this would help get that to the finish line."

However, Ward noted that he did not expect to see so many shares being offered. The amount of shares to be sold, he said, represents about 20% of the company's total outstanding equity.

"If I am an ACAS holder, I probably wouldn't be too excited about that," he said. "But it will probably help them survive in the long run."

Ward added that the company needed shareholder approval to sell the shares below book value and that approval was secured back in February. At that time, the shareholders approved the issuance of up to 20% of equity.

"I do know that there won't be any additional share issuance without approval," he said.

And, though in default on about $1.9 billion, American Capital's equity value is "in excess of that," he said.

Settlement is expected by April 22.

American Capital's shares (Nasdaq: ACAS) improved by 32 cents, or 6.04%, to $5.65. Market capitalization is $1.56 billion.

Excelsior seeks C$20 million

Excelsior Energy intends to raise C$20 million via a private placement of units and equity.

The Calgary, Alta.-based company will sell up to approximately 41.66 million of the units to an investor group comprising Frank Giustra, Peninsula Merchant Syndications Corp. and Jeff Scott. The units will be sold at C$0.36 each and will consist of one common share, one flow-through common share and two warrants.

The warrants are exercisable at C$0.30 for three years. The unit portion of the financing is expected to bring in up to C$15 million.

Excelsior will raise another C$5 million from a non-brokered placement of common shares. The company will issue approximately 27.77 million of the shares at C$0.18 each.

Proceeds will be used for further delineation of the Hangingstone area property in Alberta, as well as for general corporate purposes.

Calls seeking comment were not returned Monday.

Excelsior's stock (TSX Venture: ELE) gained 2 cents, or 5.36%, to C$0.30. Market capitalization is C$40.8 million.

Saxon raises C$9.54 million

Saxon Oil wrapped a C$9.54 million private placement of units, according to a press release.

The non-brokered deal originally priced at C$9.56 million on March 8.

The company sold approximately 95.37 million units at C$0.10 each. The units contained one common share and one warrant. The warrants are exercisable at C$0.15 until April 16, 2012.

Saxon will use the proceeds from the private placement to reduce its corporate debt, as well as to advance its projects and to ensure sufficient working capital.

According to Patrice Nazareno, who handles investor relations for Saxon, the funding will be used primarily at its three key projects, known as the Kansas Pipeline. Saxon also hopes the money will allow it to commence a project in Italy, as well as to allow for drilling projects at its Bakken Shale interests in North Dakota.

"We are delighted," Nazareno said of the completed financing. She added that the transaction brought in a new group of investors, led by Hank Swartout. Swartout is the former owner of Precision Drilling, which, Nazareno said, was one of Canada's largest drilling companies.

"Investors are quite thrilled to see the new group coming in," she said, given the group's "extensive experience and expertise."

Nazareno also said that the company does not have any current plans to come back to market for more funding.

"These funds should be sufficient to kick-start our business plan," she said.

In addition to the financing, Saxon announced C. Ted Wooten has joined the company as its new president.

Saxon's shares (TSX Venture: SXN) declined 3 cents, or 6.02%, to C$0.39. Market capitalization is C$38.2 million.

Saxon Oil is a Vancouver, B.C.-based oil and gas company.

Bovie to sell equity

Bovie Medical will privately sell common stock in an effort to raise $3 million, the company announced.

Bovie will sell 571,429 of the shares at $5.25 per share. Investors will also receive warrants equal to another 285,714 shares.

The warrants are exercisable at $6.00 for five years. The strike price can be adjusted in the events or certain circumstances, including stock splits and dividends.

"We believe the participation of institutional investors is evidence of the confidence the investment community has placed in our company, while strengthening our ability to develop and market our proprietary technologies for the medical industry," stated Andrew Makrides, president of Bovie Medical, in a press release.

Proceeds will be used for working capital.

Bovie's equity (Amex: BVX) slipped 46 cents, or 8.00%, to $5.29. Market capitalization is $90.7 million.

Bovie Medical is a Melville, N.Y.-based manufacturer of electrosurgical products.

Cymat seals C$2.74 million

Cymat Technologies, a Toronto-based developer of aluminum foam products, said it raised C$2.74 million from a private placement of units and subscription receipts.

The company sold approximately 11.45 million units in the non-brokered deal at C$0.18 each. The units consisted of one common share and one warrant.

The warrants are exercisable at C$0.25 in the first year and at C$0.35 in the second.

Cymat also issued approximately 3.76 million subscription receipts at C$0.18 each. The receipts convert into one unit.

"This funding will enhance Cymat's financial resources as it continues to execute on increased product demand from each of its three market verticals - architectural, automotive and military," the company said in a press release.

"In particular, the company anticipates significant revenue growth in its military and architectural businesses. Proceeds from this financing will be used to increase production capacity to facilitate same and to provide general working capital."

"With the increasing demand for our products - particularly our military SmartMetal and architectural Alusion products - we expect to fully commercialize Cymat by the end of calendar year 2010," said Tim Hardman, president of Cymat, in the release. "These financial resources will allow the company to accelerate our business progress significantly."

Cymat's stock (Toronto: CYM) lost 2 cents, or 8.33%, to C$0.22. Market capitalization is C$20.1 million.

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