PIPE volume light on oil fears; Regeneration Technologies raises $23.94 million

By Sheri Kasprzak

New York, Aug. 25 - Even though private placement volume was relatively light on Thursday, sell-siders said the lag in issuance may be more from fear over record-high oil prices than any actual impact those higher prices are having on the stock market.

Stocks, in fact, shrugged off an extreme jump in oil prices from Wednesday.

"There's a lot of hoopla about nothing," said one market source, who is not convinced the higher oil prices will impact PIPEs that much. "The [stock] market doesn't revolve around oil all the time and that's where this [worry about lower volume] comes from."

The sellside source said that even if there is a small dip in placement volume, that will be made up quickly since there still is an open window for deals, especially in the tech and biotech sectors.

Another source, however, disagreed.

"We're already seeing it," he said of the drop in volume Thursday. "Just because stocks didn't tank doesn't mean they were doing great either. [There's] just other data to take into consideration."

The Dow edged up 15.76 to close at 10,450.63, and the Nasdaq composite index gained 5.46 to close at 2,134.37. The S&P 500 rose 2.78 to close at 1,212.37.

Oil, meanwhile, continued to make its way upward, gaining $0.17 to end at $67.49 per barrel.

Heading up private placement news Thursday was an announcement from Regeneration Technologies, Inc. that it will soon close a $23.94 million offering.

The company has received definitive agreements for the deal, which is comprised of 2.8 million shares at $8.55 each.

Wendy Crites Wacker, the company's spokeswoman, could not provide any details about the investors in the offering. She noted that once the deal closes early next week, the full details of the investors will be released.

"We are conducting the deal," Crites Wacker said in an interview Thursday, "to improve our cash position to better enable ourselves to reach our corporate goals, such as our direct distribution force and aggressively grow and launch our xenograft [operations]."

Crites Wacker said this is not the first PIPE issue that Regeneration Technologies has conducted. The company closed a $27.55 million offering of 3.8 million shares at $7.25 each in November 2002.

Proceeds from the most recent deal will be used for working capital.

The company's stock slipped $0.04 to close at $9.51 Thursday but gained $0.03 in after-hours trading.

According to Regeneration's latest earnings statement, the company sustained net losses of $997,000 for the quarter ended June 30, compared to net gains of $1,507,000 for the same quarter in 2004.

The company reportedly had 26,735,955 outstanding common shares as of July 29.

Alachua, Fla.-based Regeneration makes allograft and xenograft tissue into shaped implants for orthopedic, cardiovascular and other surgeries.

Flotek raises $21.19 million

Flotek Industries, Inc. wrapped a $21.19 million stock offering Thursday with a group of institutional investors.

The company sold 1.3 million shares at $16.30 each.

The proceeds will be used for general corporate purposes and for acquisitions, including the purchase of Harmon's Machine Works, Inc. The remainder will be used to pay down debt and a revolving credit line.

After the offering was announced Thursday afternoon, Flotek's stock gained $0.23 to close at $17.32.

Houston-based Flotek provides tools, chemicals and other supplies to the oil industry.

National Diversified gets $20 million equity line

National Diversified Services, Inc., a Piscataway, N.J.-based company that imports construction and hardware products to the United States, received a standby equity distribution agreement for $20 million, the company reported Thursday.

Cornell Capital Partners, LP will buy shares from National at 95% of the lowest volume weighted average price for the five trading days after notice of a draw.

For its commitment fee, National Diversified issued a $990,000 convertible debenture to Cornell.

The debenture matures in 15 months, bears interest at 12% annually and is convertible into common shares at $0.16 each.

Monitor Capital Inc. was the placement agent.

Berens prices C$13.67 million offering

Leading news in Canada Thursday was a C$13,675,000 private placement from Berens Energy Ltd.

One market source north of the border said the deal is just the beginning of what could become an influx of new energy offerings.

"It's a pretty sizable one, looks like," he said.

The pricing, he said, seemed a bit low for the common-stock portion.

"They probably could have gotten at least C$2 a share," he said.

The company plans to sell 4.5 million common shares at C$1.95 each and 2 million flow-through shares at C$2.45 each.

On Thursday, the company's stock dipped C$0.03 to end at C$2.15.

The offering is being placed through a syndicate of underwriters led by Peters & Co. Ltd.

Proceeds will be used for the company's capital expenditure programs in 2005 and 2006. The remainder will be used for general corporate purposes.

The pricing comes on the heels of news that Berens increased its 2005 capital program to C$26.5 million from C$20 million.

Based in Calgary, Alta., Berens is an oil and natural gas exploration, development and production company.

WellPoint wraps C$3 million deal

Elsewhere in Canada, WellPoint Systems Inc. closed a C$3 million private placement of convertible debentures.

The 7.5% debentures were purchased by Quorum Secured Equity Trust and Quorum Investment Pool LP.

The debentures mature Dec. 15, 2009 and are convertible into common shares at C$0.45 each.

Proceeds from the deal will be used to expand product offerings in Canada and the United States through internal development and acquisitions. The remainder will be used for working capital.

Connected to the offering, Quorum Group chief executive officer Wanda Dorosz will join WellPoint's board of directors.

"Quorum's involvement will allow us to rapidly implement our strategic growth plans," said Frank Stanford, WellPoint's chief executive officer. "We are pleased to be involved with Quorum and to have Wanda join our board of directors."

Based in Calgary, Alta., WellPoint provides software to the oil and natural gas sector. The company presently has 20,824,159 outstanding common shares.

On Thursday, the company's stock slipped C$0.02 to end at C$0.30.

pSivida stock closes up

Australia's pSivida Ltd.'s stock made slight gains on Thursday after closing a $4.2 million private placement on Wednesday.

The company's American depositary receipts gained $0.05, or 0.75%, to close at $6.70.

On Wednesday, when the deal closed, the company's ADRs gained $0.0499 to close at $6.6499.

pSivida sold ADRs at $6.50 each. Each ADR represents 10 common shares.

Based in Sydney, pSivida makes nanotechnology products used by pharmaceutical and other medical providers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.