Exactech to reduce debt; GeoPark welcomes new investors; Northwest takes loan; Selwyn sells units

By Kenneth Lim

Boston, May 9 - Exactech Inc. said it has enough cash to last it for about a year after it raised $20.18 million to pay down existing debt.

GeoPark Holdings Ltd. announced a £12.14 million private placement of stock and a new group of strategic investors.

Meanwhile, Northwest Biotherapeutics Inc. said it raised $4.24 million in a loan agreement, while Selwyn Resources Ltd. said it is selling C$5.5 million worth of units and flow-through shares.

Exactech strengthens balance sheet

Exactech said it is selling $20.18 million worth of common stock in a private placement that it plans to use for debt repayment.

The deal involves 877,391 common shares at $23.00 per share. Exactech common stock (Nasdaq: EXAC) closed at $24.05 on Friday, lower by 6.75%, or $1.74.

Exactech, a Gainesville, Fla.-based maker of medical implants and equipment, said it will use the proceeds to repay two secured revolving loans that have a combined outstanding amount of $22.5 million. If the company cannot repay the loans, it will use the proceeds for general corporate purposes.

"We are pleased with the closing of these transactions," Exactech chairman and chief executive Bill Petty said in a statement. "We believe this capital will build shareholder value by further enabling Exactech's plans for growth."

Exactech chief financial officer Jody Phillips said in the statement, "The impact of this share issuance has already been factored into our financial targets and we reiterate our 2008 guidance of revenues of $162 million to $169 million and diluted EPS of $0.92 to $0.98."

"I think it's key to our growth strategy," Phillips told Prospect News. "We were not in a situation where we had to have money, but it's a key strategic use."

Exactech is raising equity to lower its debt to keep itself ready for any investment opportunities, Phillips said.

"We were trying to get the proper mix between equity and debt," he said. "We have been in situations before where we were a little too levered, so we don't want to do that. We do intend to renew our credit line. ... We have not issued any meaningful equity since the company went public 12 years ago."

Exactech is actively looking at possible strategic investments, and the money will help free up the company's balance sheet, Phillips said.

"We're doing it to reduce interest expense," he said. "It gives us more growth capacity. We don't want to get overly levered. We want to leave ourselves with plenty of options. This frees us up to pursue any strategic investments that we find. Technically is it paying down debt? Yes, but it frees up our balance sheet so that we can pursue the opportunities that we find."

Exactech has a list of about six to eight possible strategic investments, but the company is currently focused on its recent acquisitions, and if there is any major move it probably will not be for a few quarters, Phillips said.

The company probably has enough cash to last for at least a year, Phillips said.

"We historically haven't burned a lot of cash, so it will certainly allow us to execute our strategy for the next 12 to 18 months," he said.

Phillips said he was not completely satisfied with the pricing of the deal, which came at a discount to market, but explained that it was important for the company to keep its balance sheet robust.

"We understood that based on market conditions it was decent," he said. "While you could possibly say that if we had waited for the market to improve we may have gotten a better price, we think it was a good transaction that will allow us to continue our growth strategy."

GeoPark lands new investors

GeoPark Holdings said it is selling £12.14 million worth of shares in a private placement.

The Hamilton, Bermuda-based oil and gas company said it is selling 3.08 million ordinary shares at 394p apiece. GeoPark common stock (AIM: GPK) closed at 400.5p on Friday, up by 2.82%, or 11p.

GeoPark said it will use the proceeds to fund the acquisition of and work program for its farm-in on the new Tranquilo block in Chile and to accelerate the investment program on the company's Fell Block in Chile.

Existing investor the International Finance Corp. of the World Bank (IFC) took part in the deal, as well as institutional investors in London and "a new strategic block of Chilean investors and pension funds," GeoPark said in a statement.

GeoPark said its work and investment program for 2008 is expected to cost $57 million.

"We are pleased with the encouraging level of demand generated by the placing and the continuing confidence in the company exhibited by the international investment community," GeoPark chairman Gerald E. O'Shaughnessy said in a statement. "Notable in the placement is the participation by a new group of strategic Chilean investors, whose participation represents an important milestone for the company by providing an important new investor base which will support future growth in the region in which we operate. We also appreciate the continuing support received from the IFC."

Northwest Bio raises $4 million

Northwest Biotherapeutics said it has arranged a $4 million loan agreement with Al Rajhi Holdings WLL.

The six-month loan is evidenced by a promissory note for $4.24 million, which equals an original issue discount of 6%.

Al Rajhi may elect to have the original issue discount amount paid at maturity in common stock.

Northwest is a development-stage biotechnology company based in Bothell, Wash.

"We are delighted to have secured this loan from Al Rajhi," Northwest chief executive Alton L. Boynton said in a statement. "Since investing in our IPO on AIM in June 2007, Al Rajhi has accumulated a significant stake in Northwest and currently holds in excess of 10% of our issued and outstanding common stock. We appreciate their support for the company and our DCVax technology. The loan will enable us to continue moving our programs forward aggressively, with minimal dilution for existing shareholders."

Selwyn to raise C$5.5 million

Selwyn Resources Ltd. said it is raising C$5.5 million in a sale of units and stock.

The company will sell units at C$0.21 apiece for C$4 million and flow-through shares at C$0.25 apiece for C$1.5 million.

Each unit comprises one common share and one half-share warrant. Each whole warrant is exercisable at C$0.27 for two years.

Selwyn common stock (TSX: SWN) fell 9.52%, or C$0.02, to close at C$0.19 on Friday.

Proceeds will be used for continued advancement of the environmental assessment, permitting, First Nations consultation, engineering and exploration on the Selwyn Project and for general working capital.

Selwyn is a resource exploration company based in Vancouver, B.C.

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