BreitBurn heads to PIPE market again; Synutra seals $66 million stock offering

By Sheri Kasprzak

New York, May 29 - As the PIPE market got back to business following the Memorial Day weekend, BreitBurn Energy Partners LP wrapped its second sizable private placement this month, selling $92 million in common units.

The oil and gas partnership sold 2,967,744 units at $31.00 apiece to Kayne Anderson MLP Investment Co.; Kayne Anderson Energy Total Return Fund, Inc.; Kayne Anderson Energy Development Co.; GPS New Equity Fund LP; GPS MLP Fund LP; Royal Bank of Canada; Lehman Brothers MLP Opportunity Fund LP; ZLP Fund, LP; and Structured Finance Americas, LLC.

Proceeds from the deal were used to fund the acquisition by subsidiary BreitBurn Operating, LP of the remaining interest in BreitBurn Energy Partners I, LP from TIFD X-III LLC. The interests included properties in the East Coyote and Sawtelle fields in the Los Angeles basin in California.

After the offering was announced Tuesday morning, BreitBurn's stock dipped by 32 cents, or 0.91%, to end at $34.88 (Nasdaq: BBEP). Volume was off with just 8,876 shares traded compared with the average 31,645 shares.

Similar offering completed

BreitBurn completed a similar offering earlier this month, selling $130 million in common units to a group of institutional investors. In that deal, the company sold 4,062,500 units at $32.00 each, a 3.8% discount to the five-day volume-weighted average share price for the period ended May 16.

The proceeds from that deal were used to acquire oil properties in Florida from Calumet Florida LLC.

Los Angeles-based BreitBurn is an oil and gas partnership focused on acquiring, exploiting and developing oil and gas properties.

In the broader market, one sellsider said a lot of larger offerings are making their way into the PIPE marketplace, thanks to acquisitions.

"Most of the bigger offerings have something to do with either an acquisition, a merger, a reverse merger, something of that sort," he said. "You're seeing very few of these that aren't in some way related to a merger transaction."

Synutra raises $66 million

Even so, a particularly large offering from Synutra International, Inc. closed for $66 million, and, according to a company statement, the proceeds from that deal will be used for general corporate purposes.

In the placement, the company issued to Warburg Pincus Private Equity IX, LP 4 million shares at $16.50 each.

After the offering was announced early in the afternoon Tuesday, the company's stock began its rise, gaining 11.39%, or $2.24, by 12:54 p.m. ET. The stock ended the day up 12.34%, or $2.43, to close at $22.09 (Nasdaq: SYUT).

Based in Rockville, Md., Synutra develops nutritional supplements for distribution in China.

Alliance gets equity line

Elsewhere, Alliance Recovery Corp. penned a $20 million equity line agreement with Dutchess Private Equities Fund, Ltd.

News of the deal sent the company's stock up 7.08%, or four-tenths of a cent, to end at $0.059 (OTCBB: ARGY).

Dutchess may buy shares of Alliance at 93% of the lowest closing bid price for the five trading days after notice of a draw over the course of three years.

There is a limit on each draw equal to either $250,000 of 200% of the average daily volume of the stock for the three trading days before a put, multiplied by the average of the three daily closing bid prices immediately before the put date.

Alliance, based in Monroe, Mich., develops technologies to convert industrial waste into fuel.

Endocare raises $7 million

Moving to the biotech sector, Endocare, Inc. concluded a $7 million offering of stock, the news of which sent the company's stock up 10.55% on Tuesday.

The stock gained 21 cents to close at $2.20 (OTCBB: ENDO).

Endocare sold 3,255,814 shares to Frazier Healthcare Ventures V, LP at $2.15 each, an 8% premium to the company's $1.99 closing stock price on Friday, the settlement date.

"The proceeds from Frazier Healthcare's investment will be used to further the company's efforts in prostate and renal cancer cryoablation and to further expand into the interventional radiology and oncology markets treating cancers of the lung and liver, as well as treatment of pain associated with metastases," said Endocare chief executive officer Craig Davenport in a news release.

Endocare sought out the PIPE market in October 2006 for a $16 million equity line from Fusion Capital Fund II, LLC. The two-year line allows Fusion to buy shares at market price.

Located in Irvine, Calif., Endocare develops minimally invasive medical devices used for tissue and tumor ablation.

Hard Creek's C$15.06 million deal

Looking to Canadian offerings Tuesday, Hard Creek Nickel Corp. led action with a C$15,057,076 placement of flow-through shares and units of one share and one half-share warrant.

The company sold 1,119,268 flow-through shares at C$2.80 each and 5,419,603 units at C$2.20 each.

The whole warrants associated with the deal are exercisable at C$3.00 each through Nov. 22, 2008.

Kingsdale Capital Markets and Salman Partners Inc. were the placement agents.

The company also closed a $143,960 non-brokered offering, selling 20,000 units and 35,700 flow-through shares under the same terms as the brokered deal.

The stock gave up 10 cents to end at C$2.45 on Tuesday (TSX Venture: HNC).

Based in Vancouver, B.C., Hard Creek is a mineral exploration company.

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