Volume bounces back; Gyrus Group leads private placement news with £154 million deal

By Sheri Kasprzak

Atlanta, June 16 - Private placement volume made a slight comeback Thursday, sell-siders said, after suffering from a dearth of offerings over the course of the week.

With a mix of both technology and natural resources offerings announced, market sources said that even though stocks have made less than stellar gains this week, the tech sector and resources names, like diamonds, gold and certain minerals, have performed well.

"The broad market certainly does count for something, but specific sectors have performed well despite the overall picture," said one sell-sider. "The sectors that tend to do PIPE deals traditionally have been performing well enough to garner investor interest."

Another sell-sider said that wasn't the case earlier in the week when mineral stocks took a dive in Canada, removing those issuers from the PIPE market for at least a couple of days. Uncertainty in the oil sector has also left some issuers holding off, at least for the short term.

"We have seen tech deals, biotech deals pretty much across the board this week," said that sell-sider. "But those companies are really the only ones performing decently. Everything else, not really."

In the broad market Thursday, all of the major indexes made gains with the Dow Jones Industrial Average up 12.28 to close at 10,578.65; the Nasdaq composite 14.23 higher at 2,089.15 and the S&P 500 up 4.38 to end at 1,210.96.

Heading up private placement news was an offering from across the pond. Cardiff, Wales-based Gyrus Group plc said it plans to conduct a £153,900,062 offering.

The deal includes 61,560,025 shares at 250p each.

The company plans to use the proceeds to fund a portion of its acquisition American Cystoscope Makers Inc., a company that makes medical devices for the urology and gynecology sectors.

Numis Securities and Panmure Gordon are the placement agents in the stock offering.

Gyrus makes surgical instruments.

On Thursday, the company's stock gained 21.5p to end at 282p.

Anthony Clark's $25 million deal

Heading up private placement deals in the United States was a US$25 million offering from Anthony Clark International Insurance Brokers Ltd., a Calgary, Alta.-based insurance brokerage holding company.

Two institutional investors bought the term loan, which matures in five years and bears interest at Prime plus 625 basis points.

The investors also received warrants for 1,439,128 shares, exercisable at C$0.80 each for five years.

The proceeds from the loan will be used to retire existing credit facilities. The remainder will be used to fund future acquisitions.

The company's stock closed unchanged at $0.55 on Thursday.

Rainmaker Systems raises $2.68 million

Software developer Rainmaker Systems, Inc. wrapped a $2.68 million private placement of stock Thursday, the company said.

The company issued 6.7 million shares at $0.40 each. Members of the company's management and its board of directors also participated in the offering, paying $0.45 per share based on the company's closing stock price of $0.48 per share on June 14.

The investors also received warrants for 1 million shares, exercisable at $0.48 each.

"We continue to focus on driving towards profitability," said the company's chief executive officer, Michael Silton, in a statement. "We have expanded our suite of services, consolidated our workforce and are making excellent progress in completing the transition to our Austin facility.

"We believe that this current round of financing will allow us to strengthen our balance sheet in order to attract additional business opportunities from both our current and potential clients. We are very pleased by the quality of the investors who are participating in this transaction and appreciate the confidence in the company and its prospects."

After announcing the closing Thursday morning, the company's stock gained $0.06, or 13.95%, to close at $0.49 and gained another penny in after-hours trading.

Based in Scotts Valley, Calif., Rainmaker develops and sells software through an outsourced marketing service. The proceeds will be used to strengthen the company's balance sheet and help generate new business.

Superior Mining prices C$6 million deal

Moving to Canada and the natural resources sector, Vancouver, B.C.-based Superior Mining Corp. announced its plans to raise up to C$6 million through the sale of up to 60 million units at C$0.10 each.

The units include one share and one warrant. The warrants provide for an additional share at C$0.12 each for two years.

The proceeds will be used to fund acquisitions and phase 2 of its drill program on the Wonderkop platinum joint venture project.

"Gold was very much down today, but earlier this week, prices were impressive," said one market source. "This one looks okay. I think the units could have gone a bit higher than that, but I think they'll do fine."

After the deal was announced late Wednesday, the company's stock remained unchanged at C$0.10 Thursday.

Superior is a gold and platinum exploration company.

ViroPharma rally triggers interest

ViroPharma Inc. shares have been on a tear over the past six weeks or so, although the stock was off slightly on Thursday. Still, as of Wednesday interest stepped up another notch, at least among players picking its convertible bonds to play the story. The 6% convertible senior notes due 2009 are especially in the spotlight.

Once the stock finished Wednesday above a $3.75 per share threshold for 20 of 30 trading days, the company can now force conversion of up to 25% of the issued amount. A convertible market source pointed out that the conversion applies to the issued amount of $75 million, not the amount outstanding because there has been a frenzy of voluntary conversions since the stock began its run. After the latest conversion notices on Tuesday, ViroPharma said there was $40.35 million outstanding on the 2009 notes.

Holders will get three years of coupon make-whole payments, less any interest already paid. If holders voluntarily convert, the company must pay the make-whole in cash; but if the company forces conversion it can pay it in cash or stock.

ViroPharma shares slipped by 5 cents, or 0.78%, to end Thursday at $6.38.

Exton, Pa.-based ViroPharma, which is focused on treatments for viral diseases such as herpes and hepatitis, has partnerships with GlaxoSmithKline and Wyeth.

Secured Services' stock rises

A day after announcing the closing of a $7 million convertible debenture offering, Secured Services Inc.'s stock made gains.

The company's stock closed up $0.19, or 18.45%, to close at $1.22 Thursday.

After the closing was announced Wednesday, the company's stock remained unchanged at $1.03.

The debentures are convertible into a total of 5,837,146 common shares.

Based in New York, Secured Services is a software company focused on identity and access-management security products.

Ronda Fears contributed to this report

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