Webster Financial aims for $115 million; PharmAthene to sell convertibles; Counsel closes deal

By Stephanie N. Rotondo

Portland, Ore., July 27 - Several large deals came to market Monday, including a $115 million equity sale from Webster Financial Corp.

Webster will sell its shares to Warburg Pincus, the company said in a press release. The investor will also receive warrants.

Meanwhile, PharmAthene Inc. orchestrated a $19.3 million placement of convertible notes.

In closed deals, Counsel Corp. raised nearly C$24 million by issuing both common shares and convertible preferred shares. The proceeds helped the company strengthen its bottom line.

American DG Energy Inc. also said it settled a deal, for proceeds of about $3.5 million.

El Nino Ventures Inc. announced it downsized a deal that had originally entered the marketplace in May. The company decreased the price per share, as well as the exercise price of the warrants.

Webster aims for $115 million

Webster Financial plans to raise $115 million by privately placing common stock and junior non-voting preferred stock.

Under the terms of the deal, Webster will issue 1.5 million common shares at $10.00 per share to private equity group Warburg Pincus. The investor will also receive 8.6 million class A seven-year warrants. The warrants are exercisable at $10.00 for the first two years, then at $11.50 and at $13.00 after four years.

In addition, Warburg will get 5.5 million class B seven-year warrants exercisable at $2.50. The warrants are only exercisable if shareholder approval is not secured by Feb. 28, 2010.

A portion of the investment will initially be issued as junior non-voting preferred shares. Those shares will convert to common stock upon shareholder approval.

"Warburg Pincus' investment further strengthens Webster's capital base which already significantly exceeded regulatory requirements for well-capitalized banks," commented James C. Smith, Webster's chairman and chief executive, in a statement. "The additional capital will enable us to capitalize on the extraordinary banking opportunities in the market as we pursue our vision to be New England's bank."

"This investment represents another important step in our capital planning, and coupled with our recently completed and highly successful exchange offer, increases Webster's tangible common equity by more than $285 million on a pro forma basis with minimal tangible book value dilution," Smith added. "Webster's ability to attract a long-term value investor of Warburg Pincus' caliber and experience in the banking sector underscores the inherent strength of our core business and long-term strategy."

"We are excited to partner with Jim Smith and his talented management team in the next phase of Webster's long term strategy," said David A. Coulter, a managing director at Warburg and Webster's newest board member. "We are confident that with its strong capital base, deep regional bank core deposit franchise and critical mass in its home markets, Webster is well positioned to drive exceptional value for both its customers and shareholders. We see Webster offering tremendous upside potential and promise, and I look forward to serving on Webster's board."

Webster's stock (NYSE: WBS) improved by $1.17, or 12.15%, to $10.80. Market capitalization is $699 million.

Webster Financial is a Waterbury, Conn.-based holding company for Webster Bank NA.

PharmAthene plans $19 million deal

PharmAthene arranged a $19.3 million private placement of 10% unsecured convertible notes, according to a press release.

The two-year notes are convertible into common shares at $2.541667 per share. Investors will also receive warrants equal to 2.6 million additional shares. The warrants are exercisable at $2.50 for five years.

Principal and interest are due at maturity.

The Annapolis, Md.-based biodefense company plans to use proceeds to repay $5.7 million of debt, as well as to repay in full its secured credit facility. Additional funds will be used for working capital purposes.

PharmAthene's equity (Amex: PIP) fell 14 cents, or 5.6%, to $2.36. Market capitalization is $66.5 million.

Counsel issues equity, converts

Communications and real estate company Counsel settled a $23.66 million sale of common stock and convertible series B preferred shares, the company said.

The Toronto-based company sold approximately 16.16 million common shares at C$0.75 per share for total proceeds of C$12.12 million. Approximately 6 million preferreds were sold at C$1.92 per share, for proceeds of C$11.54 million.

The 6% convertible preferreds can be converted to common stock at C$0.75 per share after one year.

"We are very pleased to have completed this private placement at $0.75 per share, a significant premium over the recent trading price of Counsel's common shares," said Allan Silber, chairman and CEO of Counsel, in a news release. "We see this as a vote of confidence in the company's strategy and direction. The increase in our shareholders' equity by over $12 million greatly strengthens Counsel's financial position."

Counsel's equity (Toronto: CXS) ended unchanged at C$0.59. Market capitalization is C$26.4 million.

American DG wraps stock sale

Among other completed deals, American DG Energy said it took in $3.49 million from a private placement of stock.

The company sold approximately 1.66 million common shares, according to a regulatory filing. Investors also received an option to purchase additional shares at $3.10 per share until Dec. 18.

American DG's stock (OTCBB: ADGE) closed steady at $2.95. Market capitalization is $99 million.

American DG Energy is a Waltham, Mass.-based distributor of clean onsite energy systems.

El Nino decreases placement

El Nino Ventures said it downsized a private placement of units to C$2 million from C$2.25 million.

The deal originally priced on May 4.

The company will sell units in its non-brokered placement at C$0.08 per unit, down from the original price of C$0.10 per unit. Each unit will hold one common share and one warrant. The warrants are exercisable at C$0.15 - down from C$0.25 originally - for 18 months.

Funds raised in the financing will be used to pay for El Nino's 2009 exploration program in the Democratic Republic of Congo.

"This financing will give the company the funds required to move its DRC copper projects forward," said Jean Luc Roy, president and CEO, in a press release. "Subject to the closing of this private placement, drilling is planned on our Kasala Project and on Research Permit 9316 on which we have an agreement with Phoenix Mining SPRL."

El Nino's shares (TSX Venture: ELN) gained a penny, or 17.65%, to C$0.10. Market capitalization is C$3.45 million.

El Nino Ventures is a Vancouver, B.C.-based mineral exploration company.

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