Cadiz heads up light PIPE action with $36 million deal; Platinum off after pricing C$10 million issue

By Ronda Fears

Memphis, June 30 - In a light day for PIPEs, Cadiz Inc. was the headliner with a $36.375 million five-year zero-coupon step-up secured convertible loan, and the underlying stock soared almost 10% before giving back half the day's gain at the close.

Peloton Partners, LLP arranged the loan with other lenders also participating. The lenders can convert $10 million of principal and accrued interest into stock at $18.15 per share and $26.375 million of principal and accrued interest into stock at $23.10 per share. Interest is at 5% for the first three years, stepping up to 6% after that. Before the deal, Peloton held 9% of Cadiz's stock.

Cadiz shares (Nasdaq: CDZI) traded as high as $18.24 but settled the day higher by just 82 cents, or 5.06%, at $17.01.

"I was under the assumption that only 16 people traded this," said a sellside trader, referring to a light flow in the stock Friday. "I imagine if a dry year were to occur we will see a nice push up in price."

Los Angeles-based Cadiz acquires and develops water-related land and agricultural assets in San Bernardino County, Calif.

With the financing, the company said it has the financial security that will be critical in meeting long-term objectives, particularly completion of the final entitlement process necessary to implement the Cadiz Valley Groundwater Storage Program.

The company also said the value of its assets is rising rapidly.

"San Bernardino County and neighboring Riverside County are two of the fastest growing counties in the United States, and this development has strongly influenced the value of our assets," Cadiz said in a statement.

"Comparable land prices for all of these areas has led the company to conclude that the value of our landholdings, separate and apart from the value of our groundwater storage program, now comfortably exceeds $100 million. As the availability of large contiguous parcels and significant water supplies diminishes in this region, we expect our landholdings and water resources to continue to grow in value."

Proceeds were used to repay Cadiz's existing credit facility with ING Capital LLC.

Platinum shares dip 2.5%

Platinum Group Metals Ltd. said it has priced its previously announced C$10 million private placement of 5.6 million units at C$1.80 each.

The units consist of one share and one half-share warrant. Each whole warrant is exercisable at C$2.10 until March 31, 2007.

Platinum shares (Toronto: PTM) slipped C$0.05 on the day, or 2.56%, to close at C$1.90.

Proceeds will be used for pre-feasibility and bankable feasibility engineering work, resource expansion and definition drilling on the Western Bushveld joint venture. The remainder will be used for working capital.

RBC Capital Markets is the lead agent with J.F. Mackie & Co. Ltd. as the co-agent.

Vancouver, B.C.-based Platinum Group Metals is a mineral exploration company.

Nyfix inks $12.6 million PIPE

In another sizable PIPE transaction, Nyfix, Inc. said it has agreed to sell $12.6 million of stock with clients of a "large Boston-based institutional investor."

The New York-based provider of trading workstations, trade automation and communication technologies will sell 2.713 million shares at $4.65 each, a 3% discount to the closing price on Thursday.

Nyfix shares (Pink Sheets: NYFX) dipped by 4 cents on Friday, or 0.83%, to close out at $4.76.

Proceeds will be used for general corporate purposes.

On Thursday, Nyfix announced revenues for 2005 and unaudited revenues for first-quarter 2006.

Revenues for first-quarter 2006 were $25.4 million, up 7% from $23.8 million of restated revenues for first-quarter 2005, the company said. For 2005, revenues were $97.6 million, an increase of 30% over the $74.8 million of restated revenues for 2004.

Nyfix said it had some 4,150 institutional buyside connections to its Nyfix Network at year-end 2005, up 73% from about 2,400 institutional buyside connections at year-end 2004.

The company is restating previously reported results due to issues of stock option and warrant compensation, among other issues, that were identified in an internal accounting review. There is an ongoing re-audit of financial statements for 2004 and 2003.

Western Power up over 9%

A day after Western Power & Equipment Corp. announced plans to raise $60 million in a PIPE transaction, the stock took off sharply.

Western Power & Equipment shares (OTCBB: WPEC) rose 14 cents on Friday, or 9.27%, to end at $1.65, after settling unchanged on Thursday when the news emerged.

Terms of the deal have not been determined, but the company said the offering will include five-year warrants for 5 million shares.

Proceeds will be used for the repayment of existing debt, the construction of a concrete brick plant at the Queen Creek mining operation and for general corporate purposes. Based in Vancouver, Wash., Western Power is a construction equipment dealer.

Pipeline Data up in deal wake

In the wake of Thursday's headliner PIPE deal from Pipeline Data Inc. - a $37 million private placement of convertible notes - the stock zoomed nearly 9%.

Pipeline Data shares (OTCBB: PPDA) on Friday gained 12 cents, or 8.76%, to close at $1.49. On Thursday the stock was unchanged.

A group of institutional investors agreed to buy four-year notes convertible into common shares at $1.30 each plus warrants for 11.1 million shares, exercisable at $1.40 each.

Proceeds will be used to refinance $17 million in short-term, high-coupon debt. The rest will be used for acquisitions.

Pipeline Data is not new to the PIPE market, having bagged $15 million from at deal in December. Based in Quincy, Mass., the company provides processing services for major credit card companies.

GlobalOptions rises 22%

Elsewhere, another serial PIPEs issuer, GlobalOptions Group, Inc., got another big bounce Friday on the heels of a $30.5 million convertible note deal that brought to $45 million the total proceeds raised so far.

GlobalOptions shares (OTCBB: GLOI) added 50 cents, or 22.73%, to close Friday at $2.70, following a 10% boost after the deal was announced Thursday.

The 8% notes were immediately exchanged for series B 6% convertible preferred stock and series B-1 and B-2 warrants. The 6% preferreds are convertible into common shares at $2.00 each. Investors received series B-1 warrants equal to 35% of the shares issuable upon conversion of the notes, exercisable at $2.15 each and series B-2 warrants equal to 35% of the shares issuable upon conversion of the notes, exercisable at $2.85 each.

Two previous tranches were closed in March and May for proceeds of $14.5 million. The company expects to raise another $20 million from the deal, with proceeds earmarked to repay debt related to the acquisition of SafirRosetti, to pay down a line of credit and as working capital.

New York-based GlobalOptions provides risk management and security to corporations, government organizations and high-profile individuals.

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