Foamex wraps $18.5 million of $20 million sale; TRM sells $11 million of notes with warrants

By Laura Lutz

Des Moines, April 23 - Wednesday was another slow day in the PIPE market, featuring only a handful of deals from the United States and Canada.

Foamex International Inc. closed an $18.5 million initial tranche of a $20 million private placement of preferreds while TRM Corp. raised $11 million from loan notes and warrants.

In the biotech industry, Champions Biotechnology Inc. said it completed a $2.5 million private placement of shares.

Up north, Canada Energy Partners Inc. said it arranged a private placement of stock for between C$15 million and C$25 million.

Foamex pockets $18.5 million

Foamex said it sold 18,500 series D convertible shares at $1,000 apiece.

D.E. Shaw Laminar Portfolios, LLC, Goldman, Sachs & Co. and Sigma Capital Associates, LLC were the investors.

The series D shares will be convertible into common stock for one year and pay dividends monthly at a rate of 4.5% per annum.

The investors also received 620,083 common shares, a 5% premium to their purchased shares, at no additional charge.

This closing was the first tranche of a $20 million private placement that priced on Feb. 13.

At the time, Foamex planned to sell a combination of series D convertible preferred shares and series E preferred shares to the three investors.

D.E. Shaw was expected to buy about 52.23% of the shares for a maximum of $10.45 million, Goldman Sachs was expected to buy 27.94% of the shares for a maximum of $5.59 million, and Sigma had agreed to buy 19.83% of the offered shares for a maximum of $3.97 million.

The series E shares will pay dividends monthly at a rate of 9% per annum.

When the deal was originally announced, Foamex said it would use the proceeds to assist in its compliance with financial covenants under its credit agreements for 2008.

In addition to this $20 million placement, the company said on April 1 t hat some of its major stockholders have agreed to buy $100 million of its stock for $0.65 per share.

At that time, the company also said it plans to make a $115 million rights offering to all of its stockholders, allowing them to buy stock at $0.65 per share.

The investors in the $100 million deal may satisfy their commitment by participating in the rights offering with cash, but Foamex said it expects them to satisfy most of their commitment by exchanging second lien loans at par.

The company said it expects to complete those additional offerings in the second quarter of 2008.

Based in Linwood, Pa., Foamex manufactures flexible polyurethane and polymer foam products.

The company's shares lost 2 cents, or 2.86%, on Wednesday to close at $0.68 (Pink Sheets: FMXL). Wednesday's close is 76.6% below $2.90, the closing price of the stock when the placement first priced on Feb. 13.

TRM gets $11 million

TRM said it closed an $11 million placement of secured loan notes and warrants with investor LC Capital Master Fund, Ltd.

The notes are secured by a first lien on all of the company's and its subsidiaries' assets. They have a 13% coupon and mature on April 18, 2011.

The notes are subject to mandatory prepayment if the company issues other debt or equity. In addition, the company may prepay the notes at any time, with a prepayment premium of 102% until April 18, 2009 and 101% after that date.

LC Capital also received warrants for 12.5 million shares, exercisable initially at $0.28 until April 18, 2015.

TRM is a Portland, Ore.-based provider of ATM and photocopying services. The company said it will use the proceeds to repay debt.

Its stock gained 3 cents, or 7.5%, to close at $0.43 on Wednesday (Nasdaq: TRMM).

Champions Biotech sells stock

Champions said it sold 1,428,572 restricted common shares at $1.75 apiece, for total proceeds of $2.5 million.

Based in Arlington, Va., the company develops advanced preclinical platforms and tumor-specific data to enhance the value of oncology drugs.

The company said it would use the proceeds to advance its development programs and accelerate business growth.

"Dr. David Sidransky, Champions Biotechnology's chairman, has established a compelling vision and a high potential business. We are very pleased to have successfully completed this early strategic financing on favorable terms," Doug Burkett, Champions president, said in a news release.

"In addition to the cash reserve that we have generated from operations this fiscal year, this investment is expected to enable us to accelerate the development of the company's preclinical platform, advance the development of our chemotherapeutic drug candidate and accelerate growth of our Personalized Oncology and Preclinical EValuation businesses."

Champions' stock climbed 30 cents, or 27.27%, to finish Wednesday at $1.40 (OTCBB: CSBR).

Canada Energy to price shares

Canada Energy Partners said GMP Securities LP has agreed to act as agent for a private placement of common shares that will raise between C$15 million and C$25 million.

Pricing for the shares will be set in the context of the market, but it will not be less than C$1.18 per share.

Canada Energy is a Vancouver, B.C.-based oil and gas company specializing in natural gas, mostly from coal bed methane.

It said it will use the proceeds to for its Montney exploration in northeast British Columbia, for commencement of commercial production on its Peace River coal bed methane project, for additional exploration and for general working capital.

The company's shares lost C$0.02, or 1.53%, to close at C$1.29 on Wednesday (TSX Venture: CE).

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