Smithtown eyes opportunities; Unigene borrows from investor; Micromet, Western Alliance plan deals

By Kenneth Lim

Boston, Sept. 30 - Smithtown Bancorp. sold $27.51 million of its shares that the company said would allow it to keep up with its rapid growth.

Unigene Laboratories Inc. said it is issuing $20 million of senior secured notes to a unit of Victory Park Capital Advisors, LLC.

Micromet, Inc. said it is offering $40 million of stock and warrants in a private placement, while Western Alliance Bancorp. plans to raise $50 million through a stock sale.

Smithtown completes deal

Smithtown Bancorp. said it sold $27.51 million of its common stock through a private placement.

The deal involved almost 2 million common shares at $14 apiece. Smithtown common stock (Nasdaq: SMTB) closed at $22.50 on Tuesday, up by 13.81% or $2.73.

Based in Smithtown, N.Y., Smithtown is a holding company.

The company said the proceeds will be used to take advantage of growth opportunities.

"Recent turmoil in the financial markets has created significant opportunities for us," Smithtown chairman and chief executive Brad Rock said in a statement. "As a result, our company has been growing loans, deposits and earnings at a strong pace. During the second quarter alone, loans grew by 20% and deposits grew by 14%. In order to continue to take advantage of these opportunities, we have needed to raise more capital."

"Raising capital in the current economic environment is difficult, particularly for financial companies," Rock added. "The diminished availability of capital and the extreme volatility in stock prices caused by uncertainties in financial markets impact both pricing and the ability to complete an offering. Nonetheless, because of our company's consistently strong performance over a long period of time, we have been successful in attracting the capital needed to allow us to continue to grow and prosper."

Rock also guided for a third-quarter earnings per share of $0.46 to $0.48. For the fourth quarter, earnings per share is forecast between $0.39 and $0.41 as a result of increased net income and the full impact of the new issuance on the weighted average outstanding shares.

"We expect that this additional capital will enable us to continue to create the kind of long-term shareholder value that has been a hallmark of our company for many years," Rock stated. "Typically, companies that raise capital to support growth are happy to report to shareholders that they would expect the transaction to be accretive to earnings within some future period of time, such as a year. Because we are growing earnings so rapidly right now, however, we expect that this transaction will have little or no dilutive effect at all upon our previously anticipated earnings per share."

Unigene to raise debt

Unigene Laboratories plans to place $20 million of three-year senior secured term notes with an entity managed by Victory Park Capital Advisors.

The company will also issue 1.5 million common shares to the investor.

Unigene will initially take $15 million at closing, and will have an option for an additional $5 million for two years.

Fairfield, N.J.-based Unigene is a biopharmaceutical company focusing on the oral and nasal delivery of large-market peptide drugs.

Proceeds will be used for working capital.

"We are very pleased to be able to complete this debt financing with an existing stockholder that will provide us with the capital to execute our business plan," Unigene president and chief executive Warren P. Levy said in a press release. "Given the challenging current market conditions, we are pleased that Victory Park, who has a comprehensive understanding of our business, continues to support us through this transaction."

Western Alliance to sell shares

Western Alliance said it plans to raise $50 million through a private placement of stock.

The company will sell about 4.3 million common shares at $11.50 apiece. Western Alliance common stock (NYSE: WAL) closed at $15.46 on Tuesday, lower by 0.26% or $0.04.

Western Alliance, a Las Vegas-based bank holding company, said the proceeds will be used for working capital and other general corporate purposes.

Micromet plans placement

Micromet, Inc. said it is selling $40 million of its common stock to various institutional investors.

The company is offering 9.4 million units of one common share and a warrant at $4.25 per unit. Micromet common stock (Nasdaq: MITI) gained 6.75% or $0.28 to close at $4.43 on Tuesday.

Each warrant allows investors to purchase 0.3 share at a per-share price of $4.63 for five years.

Proceeds will be used for continued research and development of Micromet's product candidates and operational expenses including the advancement of clinical trials for the company's lead BiTE antibody blinatumomab.

Based in Bethesda, Md., Micromet is a biopharmaceutical company.

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