MarketAxess lands strategic investor; Genesis, Archangel raise capital for acquisitions; Junex to sell stock

By Kenneth Lim

Boston, June 3 - MarketAxess Holdings Inc. said it collected $35 million from a strategic sale of preferred stock to a private equity fund.

Genesis Pharmaceuticals Enterprises, Inc. raised $30 million from a sale of convertible notes that will help pay for the rights to sell a new drug.

Archangel Diamond Corp. said it is selling $170 million worth of subscription receipts in connection with a proposed acquisition, while Junex Inc. said it plans to sell C$20.46 million worth of stock.

MarketAxess joins with TCV

MarketAxess said it sold $35 million worth of series B convertible preferred stock to funds affiliated with Technology Crossover Ventures.

The sale comprised 35,000 preferreds at $1,000 apiece. The preferreds are convertible into 3.5 million common shares at an initial conversion price of $10. Investors also received warrants for 700,000 common shares, exercisable at $10 for 10 years. MarketAxess common stock (Nasdaq: MKTX) closed at $7.64 on Tuesday, higher by 2% or $0.15.

The preferreds were sold to TCV VI, LP and TCV Member Fund, LP.

MarketAxess, a New York-based provider of corporate bond and other fixed income trading platforms used by institutional investors, said it will use the proceeds for general purposes.

As part of the investment agreement, Technology Crossover Ventures will have the right to elect one member to MarketAxess's board of directors.

"We are pleased to join forces with TCV to expand and execute our growth agenda," MarketAxess chairman and chief executive Richard M. McVey said in a statement. "The TCV investment reflects confidence in our business model and our market position.

"This additional capital will allow us to invest in broadening our capabilities while actively managing our balance sheet to build stockholder value. TCV has a long history of success in the financial technology space and we will benefit from their expertise as well as their industry relationships."

TCV general partner Robert Trudeau added: "Since going public in 2004, MarketAxess has greatly expanded its product and service offering and cemented their position as a premier provider of electronic trading and technology solutions for the credit markets. Our investment in MarketAxess reflects the strength of their client franchise, their e-trading leadership position in large global credit markets and the superior growth opportunity for their technology solutions product offering."

Genesis funds product acquisition

Genesis Pharmaceuticals said it sold $30 million worth of convertible notes to pay for the rights to an anti-blood clotting treatment.

The company said it sold the three-year 6% notes with an initial conversion price of $0.20 per share. Investors also received 75 million five-year warrants that are exercisable at $0.25.

Genesis common stock (OTCBB: GTEC) dropped 6.9% or $0.02 to close at $0.27 on Tuesday.

The lead investor in the deal was Pope Investments, LLC.

Genesis, a Laiyang, China-based drug company, said it will use the proceeds to pay for the rights to manufacture and distribute a new Chinese class I drug, Ligustrazine Ferulic Acid Acetate (LFAA), a cardiac cerebral vascular medicine that helps to reduce blood clotting and prevent blood platelets from clumping together, and for the marketing expenses associated with the launch of the drug.

The drug expects to receive approval for the drug in China in the first half of 2009 and to start generating revenue from the drug in the second half of 2009, the company said in a statement. Genesis is forecasting revenue of more than $23 million from the drug in the year ending June 2010.

"'We believe that this financing provides Genesis with new capital with which to pay the balance of what it costs to acquire and market LFAA, a drug that we believe has the potential to significantly enhance our future growth and profitability," Genesis chairman and chief executive Cao Wubo said in a statement. "We are investing in our future growth and development while working to increase company value for our shareholders."

Archangel raises $170 million

Archangel Diamond said it is selling $170 million worth of subscription receipts as part of its acquisition of a mining license.

The deal involves 136 million subscription receipts at $1.25 apiece. Archangel common stock (TSX: AAD) closed unchanged at C$1.36 on Tuesday.

Cencan SA, a wholly owned subsidiary of De Beers SA, is buying 92.8 million of the receipts for $116 million. Archangel's second-largest shareholder, Firebird Global Master Fund Ltd., has also expressed a willingness to participate in the placement, the company said in a statement.

The proceeds of the deal will be held in escrow until, among other conditions, Archangel can complete its planned acquisition from OAO Lukoil of a 49.99% interest in OAO Arkhangelskoe Geologodobychnoe Predpriyatie, a mining and exploration license. If any of the release conditions have not been met 115 days after the deal settles, the subscription receipts will be cancelled and the escrowed funds will be returned to the investors.

Each subscription receipt from the deal will be exchanged for one unit of one common share and a half-share warrant after the release conditions have been satisfied. Each whole warrant is exercisable at $1.50 for two years.

Canaccord Capital Corp. and RBC Capital Markets are the agents. The agents have a greenshoe for an additional 24 million receipts, or $30 million.

Based in Toronto, Archangel is a diamond exploration company.

Junex to sell stock

Junex said it is selling C$20.46 million worth of stock in a private placement.

The company is selling 3.3 million common shares at C$6.20 per share. Junex common stock (TSX: JNX) declined by 5.64% or $0.39 to close at C$6.52 on Tuesday.

The underwriters, who are led by Merrill Lynch Canada Inc., have an over-allotment option for a further C$3.07 million, or 495,000 shares.

Junex, a junior oil and gas exploration company based in Quebec City, said it will use the proceeds for capital expenditures related primarily to its projects in the St. Lawrence Lowlands and Gaspesie regions of Quebec. It will also use the proceeds for general corporate purposes.

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