Center for Wound Healing gets $17.5 million loan from Bison Capital; Colabor, Rockcliff plan placements

By Kenneth Lim

Boston, April 7 - The Center for Wound Healing Inc. said it raised $17.5 million in a debt placement with Bison Capital Equity Partners II LP.

Meanwhile, Colabor Income Fund said it is raising C$8.36 million in a private placement of units to fund its takeover of Gestion Bertrand & Freres Inc.

Rockcliff Resources Inc. plans to raise C$5 million in a private offering that it said will help fund exploration and working capital.

Center for Wound Healing adds debt

The Center for Wound Healing received a $17.5 million boost to its cash position with a private sale of secured promissory notes to Bison Capital.

The notes were sold at a discount to the principal amount of $20 million and will pay an annual coupon of 18%. Bison also received two seven-year warrants exercisable for 7.08 million common shares at $5.00 per share.

Center for Wound Healing common stock (Pink Sheets: CFWH) closed at $1.45 on Monday, up by $0.20, or 16%.

Center for Wound Healing, a Miami Beach-based operator of wound care centers, said it will use the proceeds to retire existing debt and for working capital.

"Bison exerted enormous time and effort to understand our business and the markets we serve," Center for Wound Healing chief executive officer Andrew Barnett said in a statement. "[Eighty percent] of the patients treated in the company's comprehensive wound care centers are diabetic, a population that today exceeds 20 million patients throughout the country and is growing by one million new patients per year. Bison has provided us with substantial long-term capital that will allow us to continue our expansion and provide superb care to this important demographic."

"We are delighted to have Bison Capital as a critical member of our team," Barnett added. "We would also like to thank our shareholders for their support of the company during this last year and look forward to continuing our efforts to serve a greater share of domestic wound care market."

In the same statement, Bison partner Douglas Trussler said, "We are extremely impressed with the Center for Wound Healing's track record in operating wound care centers of excellence. The company's legacy of clinical outcomes and the strength of its hospital partner relationships are a testament to its commitment to the highest quality of care, coupled with highly professionalized operational management. Through our investment, the Center for Wound Healing will be able to expand the number of centers it develops and operates, furthering the tremendous benefit it provides to its hospital partners and their patients."

Speaking to Prospect News, Trussler added that Center for Wound Healing is going through a capital-intensive phase.

"We made the investment to support the company's growth, expand the number of centers it has," Trussler said. "Their centers offer hyperbaric services and wound care treatment, and that's a real capital-intensive process of putting in new centers and equipment. We refinanced some existing debt for them and provided them with some capital to continue to grow."

Bison, which Trussler said has about $300 million in assets under management, thought that Center for Wound Healing is in a good space and has good leadership.

"I think the management team that's in there is pretty solid," Trussler said. "They have a very well thought through plan for expansion. The long-term demographic trend is unfortunately positive for them. The aging population is growing, and the demand for diabetic treatment is also growing."

He declined to comment on the pricing of the deal.

Colabor sells units for takeover

Colabor Income Fund is raising C$8.36 million in a private placement of units to fund its plan to buy all the remaining shares of Gestion Bertrand & Freres.

The placement will involve 800,000 fund units at C$10.45 per unit. Colabor common stock (TSX: CLB.UN) gained 0.84%, or C$0.09, on Monday to close at C$10.84.

Colabor said the units were taken by certain Bertrand shareholders.

Colabor, a Bourcherville, Quebec-based open-ended limited-purpose trust whose main business is in distribution of food and non-food products, said it will use the proceeds to help pay for its planned acquisition of Bertrand for C$84.8 million, excluding C$4.5 million of outstanding debt that will be assumed.

The acquisition will be paid for by drawing on a new C$100 million three-year revolving credit facility, a public offering of C$40 million worth of fund units also at C$10.45 apiece, and the placement.

"This transaction is highly strategic for Colabor," Colabor president and CEO Gilles C. Lachance said in a statement. "Bertrand has played an important role in Colabor's success for many years. By acquiring Bertrand, one of our most important affiliated distributors, we have the opportunity to further solidify our foothold in the Quebec market. The acquisition will not only add additional volume to our system, but will also allow Colabor to internalize Bertrand's higher margin distribution business."

Bertrand president Rejean Bertrand added, "The combination of Bertrand and Colabor is a natural step in the evolution of our two organizations. We are proud of the strong management group that has developed under our leadership. We look forward to seeing them join the Colabor team, continue to execute their growth plan and increase the business' bottom line."

Rockcliff to raise C$5 million

Rockcliff Resources said it has arranged to sell C$5 million of units and stock in a private placement.

The company is selling 5.72 million flow-through shares at C$0.70 per share for C$4 million and 1.54 million units of one common share and one half-share warrant at C$0.65 per unit for C$1 million. Each whole warrant is exercisable at C$0.95 for two years.

Rockcliff common stock (TSX: RCR) closed a C$0.64, lower by 12.33%, or C$0.09.

There is an over-allotment option for a further 858,000 flow-through shares and 231,000 units, or C$750,750.

Dundee Securities Corp is the lead agent on the deal.

Rockcliff, a Sudbury, Ont.-based resource exploration company, said the proceeds will be used for exploration on its existing properties and for working capital.

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