Lumenis secures $120 million from stock offering; American Dairy wraps $18.2 million convertibles sale

By Sheri Kasprzak

New York, Oct. 3 - PIPE activity remained reasonably active and was headed up by a $120 million stock offering from Lumenis Ltd. as the broader stock markets rebounded Tuesday and oil prices continued to drop - this time to a seven-month low.

One market source in Vancouver, B.C., noted that a drop in oil prices has impacted offerings there as oil and mineral companies make up the majority of the issuers north of the border.

"We're getting more and more flow-through [stock] deals because the year is winding down," he added. "So that does help us a bit in terms of what's getting priced, but it has been a lot slower than it normally is this time of year."

In fact, Curlew Lake Resources Inc. negotiated a flow-through unit offering Tuesday for C$1.5 million. The company plans to sell 7.5 million units at C$0.20 each.

Curlew Lake is a natural gas exploration company based in Langley, B.C.

Meanwhile, oil prices slipped by $2.35 to close at $58.68 per barrel Tuesday as the Dow Jones Industrial Average climbed by 56.99 to end at 11,727.34. The Nasdaq composite index gained 6.05 to close at 2,243.65 and the Standard & Poor's 500 composite index edged up 2.79 to end at 1,334.11.

Lumenis's $120 million PIPE

Looking at that Lumenis offering, LM Partners LP and Ofer High-Tech Group plan to buy 111,919,418 shares at $1.0722 each.

The placement represents a 75% interest in the company.

In connection with the placement, the company will restructure $205 million in debt held by Bank Hapoalim B.M.

After the offering was announced early Tuesday, the company's stock remained unmoved at $1.25 (Pink Sheets: LUME).

Based in Yokneam, Israel, Lumenis develops laser-, light- and radio frequency-based devices used in medical, aesthetic, ophthalmic, dental and veterinary applications.

American Dairy raises $18.2 million

In other PIPE news Tuesday, American Dairy, Inc. wrapped an $18.2 million private placement of convertible notes.

The 7.75% notes are due in three years and are convertible at $14.50 each, a 5.4% premium to the company's $13.75 closing stock price Monday.

The investors also received warrants for 251,000 shares, exercisable at $14.50 each for six years.

The deal was announced Tuesday morning and by the end of the day, the stock slipped by 1.45%, or 20 cents, to settle at $13.55 (NYSE: ADY). Volume of the shares of American Dairy traded Tuesday was lower than average with 4,600 shares traded compared to the average 11,087 shares.

According to a statement released Tuesday by the company, the term sheet was initially signed Aug. 18 when the company's stock price was $13.00 per share.

Proceeds will be used to expand processing, packaging and distributing facilities.

American Dairy is a frequent PIPE issuer. In July 2005, the company sold $5 million in series B convertible notes with a conversion price of $10.00. In May 2005, American Dairy issued a $3 million convertible note with a conversion price of $8.00. The company sold $2 million in stock in December 2004 at $3.50 each.

Beijing-based American Dairy produces milk powder and soybean products in China.

PlanetOut stock drops

After announcing a $15 million credit facility Tuesday evening, PlanetOut's stock dipped by 2.47%.

The stock gave up 11 cents to close out the session at $4.35 (Nasdaq: LGBT).

In the placement, the company sold a $7.5 million term loan and a $7.5 million revolving loan to Orix Venture Finance, LLC.

The non-revolving loan is due in 48 months and bears interest at Prime rate plus 300 basis points. The coupon decreases to Prime rate plus 200 basis points if the EBITDA achieved by the company exceeds $2.5 million in two consecutive fiscal quarters.

The revolving loan matures in two years and bears interest at Prime rate plus 300 basis points. The revolving loan is for up to 85% of the company's eligible accounts receivable, not to exceed $7.5 million.

The investor will also receive warrants for 120,000 shares, exercisable at a price equal to the average closing price for the 20 trading days following the issuance of the warrants. The warrants expire in seven years.

San Francisco-based PlanetOut operates gay- and lesbian-oriented web sites.

Accentia stock falls 9%

Looking at secondary market activity, Accentia Biopharmaceuticals, Inc.'s stock gave up 9.62% after the company concluded a $25 million exchangeable convertible debenture offering Monday.

The stock lost 25 cents to end the day at $2.35 (Nasdaq: ABPI). The company's stock fell by 2 cents to end at $2.60 Monday after the deal closed.

The volume of Accentia shares traded remained elevated on Tuesday with 48,620 shares traded compared to the average 32,670 shares.

In the placement, Accentia sold 8% debentures convertible at $2.60 each. The conversion price was only a slight premium to the company's $2.58 closing stock price on Friday.

Under the offering terms, the investors have the option, after the first year, to exchange their principal of the debentures for common shares of Biovest International, Inc., a wholly owned subsidiary of Accentia, at $1.00 each, assuming the total amount of Biovest shares issued does not exceed 18 million.

Rodman & Renshaw, LLC was the placement agent.

Proceeds will be used to commercialize the company's specialty pharmaceutical products and develop its intranasal antifungal therapy for chronic sinusitis. The rest will be used to repay short-term debt.

Accentia is a Tampa, Fla.-based biopharmaceutical company focused on respiratory disease and oncology.

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