Boulder Specialty Brands pockets $246 million; MathStar to wrap $12.6 million stock sale

By Sheri Kasprzak

New York, Sept. 27 - Heading up a light day of private placement action were two private placements settled by Boulder Specialty Brands, Inc. as part of its merger with GFA Holdings, Inc. The two offerings total $246 million.

In the stock portion of the deal, the company issued 14,410,188 shares at $7.46 each for proceeds of $107.5 million. In the convertible preferreds portion of the deal, the company sold 15,388,889 shares of series A convertible preferred stock at $9.00 each for proceeds of $138.5 million.

The 8% preferreds are convertible into common shares at $9.00 each.

The investors received warrants exercisable at $9.00 each. The warrants are for the same number of shares as will be issued on conversion of the preferreds and can be exercised for five years after they become exercisable, with a limit of 10 years.

Citigroup Global Markets, Inc. was lead placement agent.

Merger to cost $465 million

Under the terms of the merger, GFA stockholders will receive $465 million in cash, which will be paid for with $100 million in cash held in a trust account, with the proceeds from the private placements, and with proceeds from a $180 million debt financing.

GFA distributes organic and natural foods under the Earth Balance brand.

"The acquisition of GFA Brands represents a significant step in our strategy to be a leading marketer of healthy and organic brands targeting two of the most powerful trends in the global food and beverage market," said Boulder's chief executive officer Stephen Hughes in a news release.

"GFA is the ideal platform for Boulder to leverage our management team's skills and expertise in the categories in which Smart Balance competes today as well as our brand-building experience. GFA Brands CEO Bob Harris and his team have done a remarkable job. We look forward to continuing to expand Smart Balance and Earth Balance into a wide range of food and beverage categories."

After the offering was announced late Wednesday, the stock gained a penny to settle at $7.65 (OTCBB: BDSB).

Based in Longmont, Colo., Boulder Specialty Brands is a beverage and food distribution company.

Stocks edge up, volume remains light

Looking to broader PIPE volume, activity remained light as oil prices rebounded. Stocks made gains, but the gains were mostly slight.

Oil prices gained $1.95 to end the session at $62.96 per barrel. Meanwhile, the Dow Jones Industrial Average edged up by 19.85 to close at 11,689.24 and the Nasdaq composite index gained 2,263.39. The Standard & Poor's 500 composite index ended the day up 0.25 at 1,336.59.

Some sellsiders have speculated the PIPE volume is hinging upon oil prices, which have been sliding over the past couple of weeks. Stocks, meanwhile, have seen some gains from the dipping oil prices.

MathStar raises $12.6 million

Elsewhere in PIPE activity, MathStar, Inc. announced the pending completion of a $12.6 million stock deal.

The offering sent the company's stock down by 10% and pushed the volume of shares traded up. By the end of the day, the stock had lost 50 cents to close at $4.50 (Nasdaq: MATH). Volume climbed to 61,758 shares, compared to the average 18,421.

The company said it plans to sell about 3.1 million shares. The exact number of shares and the price per share could not be determined by press time Wednesday.

The investors will receive warrants for 1.3 million shares, exercisable at $6.00 each for five years.

Piper Jaffray & Co. is the placement agent for the offering, which is scheduled to close in the coming days.

"MathStar is currently making the transition from a research and development company to a commercial enterprise," said Doug Pihl, the company's CEO, in a statement. "This financing will be used to speed the commercialization of our Arrix family of FPOA [Field Programmable Object Arrays] products."

Headquartered in Hillsboro, Ore., MathStar develops programmable logic chips called Field Programmable Object Arrays.

LJ raises $5.5 million

In other private placement news, LJ International Inc. settled an offering of stock for $5,500,005.

The company sold 1,466,668 shares at $3.75 each to a group of institutional investors.

The investors received warrants for 366,668 shares, exercisable at $4.50 each for five years and warrants for 236,909 shares, exercisable at $4.22 each for 90 days after the registration statement is declared effective.

The stock lost 4.16%, or 16 cents, to close out the session at $3.69 (Nasdaq: JADE). The stock gained a penny in after-hours trading activity.

Proceeds will be used to expand the company's retail jewelry chain in China.

Based in Hong Kong, LJ International is a jewelry company.

Buffalo Gold's stock climbs again

In secondary market activity, Buffalo Gold Ltd.'s stock climbed for the second straight session after completing a $20,000,225 private placement with a completely exercised greenshoe.

The stock gained 15 cents, or 6.98%, to end Wednesday at $2.30 (TSX Venture: BUF). The stock gained 7 cents on Tuesday to end at $2.15 after the greenshoe was exercised.

In the placement, Buffalo sold 11,428,700 units of one share and one half-share warrant. The offering includes the over-allotment option exercised by Canaccord Adams Inc. for 2,857,200 units.

The offering priced Aug. 30 as a $15,000,125 deal comprised of 8,571,000 units. After the deal priced, the stock closed unchanged at $2.08.

Proceeds will be used for exploration and a feasibility study on the Mt. Kare property in Papua New Guinea.

Buffalo, based in Vancouver, B.C., is a gold, uranium and nickel/copper/platinum group metals exploration company.

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