DXP Enterprises plans $47 million direct stock deal; Frontera raises another $20.5 million

By Sheri Kasprzak

New York, May 31 - DXP Enterprises, Inc. grabbed PIPE headlines on Thursday with its planned $47 million registered direct placement of stock.

In the deal, the company intends to sell 1 million shares. The share price is a 9.7% discount to the company's $52.09 closing stock price on Tuesday.

The shares will be sold under the company's shelf registration.

Stephens Inc. is the placement agent.

DXP's stock began slipping shortly after the market opened, losing 2.24% by 9:45 a.m. ET. The stock went on to lose 4.89%, or $2.44, to end the session at $47.45 (Nasdaq: DXPE).

Houston-based DXP distributes maintenance, repair and operating products to industrial customers.

In the broader market, market sources said they feel volume has picked up this week, most likely benefiting from merger and acquisition activity but also due to other factors.

"M&A activity is certainly helping," noted one sellside market source. "We are seeing a great deal of larger offerings in the marketplace right now and almost all of those are connected in some way to a merger or similar transaction."

Another sellsider said he feels that volume just comes and goes in cycles.

"Sometimes [volume] is slower than others," he said. "A lot of it has to do with the time of the year and things like that. I would say that mergers and acquisitions may be playing a part in increased volume but for the most part I think these things just go in cycles."

In one offering announced this week linked to an acquisition, BreitBurn Energy Partners LP sold $92 million in common units.

The offering was conducted to facilitate the acquisition by subsidiary BreitBurn Operating, LP of the remaining interest in BreitBurn Energy Partners I, LP from TIFD X-III LLC.

BreitBurn sold 2,967,744 units at $31.00 each.

After the offering was announced Tuesday morning, BreitBurn's stock dipped by 32 cents, or 0.91%, to end at $34.88 (Nasdaq: BBEP). Volume was off with just 8,876 shares traded compared with the average 31,645 shares. On Thursday, the stock fell 25 cents to close at $34.15.

Frontera wraps offering

In other news, Frontera Resources Corp.'s stock dipped slightly after the company announced it closed the second tranche of its previously announced private placement of unsecured convertible notes for $20.5 million.

On Thursday, the stock gave up 0.50p to close at 81.50p (London: FRR).

The 10% notes are due May 2012 and are convertible into common shares at $1.67 each, a 7.5% premium over the company's 78p closing stock price on May 4.

The offering is in addition to the $46.5 million in notes issued May 8.

Now that the deal has closed, Frontera has 23 million outstanding common shares and 1.8 million warrants outstanding.

Raymond James and Associates was the placement agent for the deal.

Proceeds will be used for development and exploration on the company's projects in Block 12 in the former Soviet state of Georgia.

"This financing will be used to fuel our continued growth, particularly as we expand our footprint," said Barry Cinnamon, the company's chief executive officer, in a statement.

"In addition, these funds will provide us with the working capital needed to commercialize our proprietary solar module technology later this year."

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

China Ivy's equity line

Elsewhere in PIPE news, China Ivy School, Inc.'s stock soared after the company announced a $13 million fixed-price standby equity distribution agreement. The stock gained 44.23%, or 46 cents, by 11:17 a.m. ET. The stock ended the day up 46 cents to close at $1.50 (OTCBB: CIVY).

Nation City Investments Ltd., Innovation Gaining Investments Ltd., Arjuno Investments Ltd., Billion Hero Investments Ltd. and Even Bright Investments Ltd. agreed to buy up to 20 million shares in the one-year equity agreement.

The shares will be sold at $0.65 each.

Based in Shenzhen, China, China Ivy is a private education institution.

AXS-One closes deal

Moving to the tech sector, AXS-One Inc. wrapped a private placement of convertible notes with BlueLine Partners and William K. Jurika for $5 million.

The 6% notes are due in two years.

Half of the notes are convertible into common shares at $1.00 each and the other half at $2.50 each.

The investors also received warrants for 2 million shares, exercisable at $0.01 each.

"We are extremely pleased that BlueLine Partners and Bill Jurika, two of our existing shareholders, have demonstrated their confidence in AXS-One by leading this investment effort," said Bill Lyons, the company's CEO, in a news release.

AXS-One's stock gained a penny Thursday to settle at $0.70 (Amex: AXO).

Based in Rutherford, N.J., AXS-One develops records compliance-management software.

Linn stock drops

A day after announcing a $260 million private placement, Linn Energy, LLC's stock dropped by 1.37%.

The stock gave up 50 cents on Thursday to close at $35.95 (Nasdaq: LINE). On Wednesday, when the deal was announced, the stock fell 39 cents, or 1.06%, to end at $36.45.

The offering, the proceeds of which will be used to pay off debt under the company's existing revolving credit line, includes common units at $33.50 each.

The investors in the deal are led by Lehman Brothers MLP Opportunity Fund LP.

Citigroup Global Markets Inc., Lehman Brothers Inc., RBC Capital Markets Corp. and Jefferies & Co., Inc. were the placement agents.

The company also said Wednesday that it expects to increase to $765 million from $725 million its borrowing base under the credit facility connected to its pending acquisition of oil and gas properties in the Texas Panhandle.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.