Services Acquisition to fund merger with $205.5 million PIPE; Broadwing to wrap $74 million stock sale

By Sheri Kasprzak

New York, March 13 - Services Acquisition Corp. International led PIPE news to kick off the week with what may be the largest offering of the year so far.

The company is in talks to settle a $205.5 million stock deal to help finance its acquisition of Jamba Juice Co., a San Francisco-based juice bar operator.

The deal includes 27.4 million shares at $7.50 each, a slight premium to the company's closing stock price of $7.48 on March 10.

News of the placement sent the company's stock up early with Services' stock gaining more than 15% before noon ET. By the end of the day, the stock ended up 14.97%, or $1.12, at $8.60 (Amex: SVI). This is the biggest movement in the company's stock so far this year.

Broadview Capital Management, LLC was the placement agent.

Julie Silver, a spokeswoman for Services, did not return calls Monday for comment on the offering and the merger.

Under the terms of the merger, Services Acquisition will buy Jamba Juice for $265 million in cash, less debt and some transaction expenses.

After the merger closes, Services will change its name to Jamba, Inc.

To fund the purchase of Jamba, the proceeds from the placement will be combined with $127 million in cash currently held in trust.

"When we looked at Jamba Juice, we saw a unique lifestyle brand with strong management, category dominance and solid store-level economics," said Steve Berrard, SVI's chairman, in a statement. "With increased working capital and the experience of SVI's management in rolling out concepts, we are very excited about Jamba Juice's ability to expand its current market presence. With a long-established operating history and an excellent opportunity for organic growth, we believe the opportunity for Jamba Juice is tremendous. We look forward to partnering with management to achieve that vision."

"With more than 15 years of history and a strong, passionate customer base, we view this transaction as an opportunity to expand our footprint and extend our brand into additional markets," said Jamba chief executive officer Paul Clayton in the statement. "The unique circumstances of this merger have produced a very powerful partnership. Teaming with SVI offers both short- and long-term benefits for Jamba Juice and its current shareholders, including an attractive capital structure that provides a cost-effective method of giving liquidity to our shareholders."

Prior to the merger, Services, based in Fort Lauderdale, Fla., had no operations.

In the broader markets, mergers and acquisitions, according to two sellsiders, may be sparking more significant private placement offerings.

"Well, we're certainly in M&A season and I imagine a lot of what we're going to be seeing for the coming weeks will be related in some way or another to mergers," one of the market sources said.

"I've seen quite a few huge [offerings] today so I think it's a sign of things to come, at least through M&A season," said another sellsider.

The latter source noted that mergers make offerings like the Services deal more appealing because investors feel more confident with issuers that are combining with already developed organizations.

"It allows for more transparency, more security from the buyers' standpoint," he noted.

In fact, a spate of mergers lifted stocks early Monday with the Dow Jones Industrial Average making gains before eventually giving up 0.32 to end at 11,076.02. The Nasdaq composite index advanced 4.99 to close at 2,267.03, and the Standard & Poor's 500 composite index lifted 2.55 to settle at 1,284.13.

Broadwing to raise $74 million

In another substantial PIPE offering Monday, Broadwing Corp. announced the imminent completion of a $74 million stock deal.

The news sent the company's stock down early with the stock falling 79 cents, or 6.47%, by 9 a.m. ET. However, the stock rebounded by the end of the day to gain 4.91%, or 60 cents, to close at $12.81 (Nasdaq: BWNG).

Broadwing plans to sell 7.4 million shares to a group of institutional investors. The $10.00 price per share is an 18% discount to the company's closing stock price of $12.21 on March 10.

Proceeds from the deal will be used for general corporate purposes.

Austin, Texas-based Broadwing is a communications products and services company.

Wherify raises $40 million

Elsewhere in the communications sector, Wherify Wireless, Inc. has entered into a $40 million equity line and closed a $5 million convertible debenture deal with Cornell Capital Partners, LP.

At the same time, the company terminated a $35 million equity line it entered into with Dutchess Private Equities Fund, LP not even a week ago.

Under the terms of the Cornell equity line, the investor will buy shares of Wherify at 93% of the lowest closing bid price for the five trading days before notice of a draw over two years.

Under the Dutchess line, the investor had agreed to buy shares of Wherify over two years at 95% of the lowest closing bid price for the five trading days before a draw.

Newbridge Securities Corp. was the placement agent for the equity line.

The company also received $5 million from three-year convertible debentures.

The 7% debentures are convertible into common shares at the lower of $1.60 each or the lowest closing bid price for the 15 trading days before a registration statement is filed with the Securities and Exchange Commission.

For the debentures, Cornell received warrants for 2.5 million shares. Half of the warrants are exercisable at $2.00 each and half are exercisable at $2.25 each.

"This infusion of funds will be used to expand our manufacturing capability and to provide for corporate requirements," said Timothy Neher, the company's CEO, in a statement. "Completing this financing is an important milestone for Wherify as we focus on launching the Wherifone and bringing the benfits of Wherify's Aided-GPS [global positioning system] location technology to customers in North America and around the world."

The stock remained unchanged Monday at $1.44 (OTCBB: WFYW).

Based in Redwood Shores, Calif., Wherify develops wireless infrastructure products.

Columbia Labs' $30 million PIPE

In the biotech sector, Columbia Laboratories, Inc. is gearing up to close a $30,010,008 stock deal later this week.

A group of institutional investors agreed to buy 7,428,220 shares at $4.04 each. The price per share is a 10% discount to the company's closing stock price of $4.49 on March 10. The investors will also receive warrants for 1,857,041 shares, exercisable at $5.39 each for five years.

As of March 3, the company had 41,754,784 outstanding common shares.

The offering was announced on the same day as the company's year-end earnings report.

"We have a history of losses in each fiscal year since our founding," said the latest earnings report. "For the fiscal year ended Dec. 31, 2005, we had a net loss of $9.3 million. If we and our partners are unable to successfully market our products and otherwise increase sales of our products, and contain our operating expenses, we may not have sufficient funds to continue operations unless we are able to raise additional funds from sales of securities or otherwise. Additional funding may not be available to us on acceptable terms, if at all."

News of the placement and the earnings report sent Columbia's stock down 19 cents, or 4.23%, on Monday to close at $4.30 (Nasdaq: CBRX).

Livingston, N.J.-based Columbia develops pharmaceuticals for women's health and for endocrine-related disorders.

Rim raises $6 million

In the tech sector, Rim Semiconductor Co. wrapped a $6 million convertible debenture offering Monday that sent its stock down 3.75%.

The company issued two-year debentures to institutional and other investors.

The debentures bear interest at 7% annually and are convertible at the lesser of 70% of the volume weighted average price for the 20 trading days before conversion or the lowest share or conversion price of any subsequent equity placement while the debentures remain outstanding.

The investors received warrants for 70,955,548 shares, exercisable at $0.16 for three years.

Krieger & Prager, LLP was the placement agent.

The company's stock closed down $0.006 to end the day at $0.154 (OTCBB: RSMI).

Proceeds will be used for the commercialization of the company's Embarq product, a digital signal processor used in voice-over-internet protocol technology.

"The institutional and private investors who participated in these transactions enthusiastically and confidently support the Rim Semi management and advisory team and their successes in bringing the Embarq chip to market this year," said Ray Willenberg, the company's chairman, in a news release. "Most of the investors have invested previously and continue to show great confidence in the company and its team."

On March 9, Rim temporarily reduced the strike price on its class A, B and C warrants issued with a senior secured convertible debenture sold in May 2005.

The price reduction, to $0.05, expired on Friday. Of the warrants 12,443,442 had been exercisable at $0.1547 each and 27,149,316 were exercisable at $0.3094 each.

Based in Portland, Ore., Rim Semiconductor develops semiconductor technologies used in communications products.

Apogee leads resources offerings

Moving to the natural resources sector, Apogee Minerals Ltd. led offerings with a C$10 million offering of 10 million units.

The units are comprised of one share and one half-share warrant, the whole of which is exercisable at C$1.25 each for 18 months.

A syndicate of placement agents led by Salman Partners Inc. has a greenshoe for up to 2 million units.

The placement is set to close April 6.

Proceeds will be used for exploration on the company's Solucion and Pulacayo-Paca properties and for general corporate purposes.

On Monday, the stock fell 3 cents, or 2.86%, to end at C$1.02 (TSX Venture: APE).

Toronto-based Apogee is a mineral exploration company focused on silver-zinc projects in South America.

Elsewhere, as oil prices rebounded substantially, BPZ Energy, Inc. wrapped a $5.01 million placement, selling 1.67 million shares at $3.00 each to four investors on a non-brokered basis.

The price per share is a 19% discount to the company's closing stock price of $3.70 on March 10.

Following the placement, the company has 42,282,000 outstanding shares and 54.69 million fully diluted shares outstanding.

Proceeds will be used to advance the redevelopment of the company's Albacora oil field offshore Peru and for general corporate purposes.

BPZ's stock fell 20 cents to finish at $3.50 Monday (Pink Sheets: BPZI).

"We are very excited about the prospects for the Albacora oil field," said Manolo Zuniga, the company's CEO, in a statement. "With previous oil production and an existing platform in place, we believe this field presents an excellent opportunity to realize production on an accelerated basis. Also, as an oil project, it provides important diversification to BPZ. We are very pleased that these investors have demonstrated their confidence in the management team and the company."

"With substantially all of our current capital resources committed to the Corvina gas-to-power project, we believed it was prudent to raise additional capital at this time to commence the redevelopment of the Albacora oil field, which is also a very promising project in our portfolio," chief financial officer Randall Keys said in the statement. "We will continue to evaluate other sources of capital to fund the complete Albacora project, including industry and financial partners. With this capital raise, we will be able to advance the project, which should allow us to obtain better terms for any such future funding."

Houston-based BPZ is an oil and natural gas exploration and production company.

Oil prices advanced $1.81 on Monday to end at $61.77 per barrel after suffering mostly losses last week. Oil lost $0.51 on Friday to end at $59.96 per barrel.

Commercial prices C$10 million PIPE

Back to Canadian offerings, Commercial Solutions Inc. negotiated a C$10 million offering of special warrants Monday.

The company plans to sell up to 2 million special warrants which are exchangeable on a one-for-one basis for common stock.

A syndicate of underwriters led by Paradigm Capital Inc. has a greenshoe for up to 1 million additional special warrants.

The offering is scheduled to close March 28.

The stock closed unchanged Monday at C$5.05 (Toronto: CSA).

Proceeds will be used for strategic acquisitions and general corporate purposes.

Based in Edmonton, Alta., Commercial Solutions provides industrial distribution services to maintenance, repair and overhaul operations and original equipment manufacturer clients.

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