Brookdale Senior Living pockets $650 million; Momenta secures $74.87 million from collaboration deal

By Sheri Kasprzak

New York, July 25 - Brookdale Senior Living Inc. led a rather active day of private placements, settling a $650 million private placement connected to its acquisition of American Retirement Corp.

The company sold 17,600,867 shares at $36.93 each to RIC Coinvestment Fund LP, an affiliate of Fortress Investment Group LLC, its largest shareholder. The price per share is a slight discount to the company's $37.02 closing price on May 12, the day the deal was announced.

Brookdale also sold 17,721,519 shares at $39.50 in a follow on offering and shareholder Health Partners sold 4,399,999 shares.

The company's proceeds will be used to pay the company's $1.2 billion acquisition of American

"We are very pleased to have completed this transaction so quickly and smoothly," said William Doniger, Brookdale's vice chairman, in a statement. "With the addition of American Retirement, in our opinion, Brookdale now operates the highest-quality portfolio of senior housing assets in the United States."

"Internally, we have seen a lot of excitement about this combination and I speak for all American Retirement associates when I say that I look forward to the partnership with Brookdale," said American Retirement's former chief executive officer and Brookdale's current co-CEO W.E. Sheriff in a news release.

The acquisition closing and the placement were announced Tuesday afternoon and the stock climbed by 3.23%, or $1.40, to close at $44.80, gaining another 20 cents in after-hours trading (NYSE: BKD).

Chicago-based Brookdale operates senior living facilities throughout the United States. American Retirement, based in Nashville, Tenn., also operates senior living facilities.

Momenta raises $74.87 million

Biotech name Momenta Pharmaceuticals, Inc. settled its own sizable offering on Tuesday with Sandoz after announcing the two will collaborate on four generic product candidates.

Word of the collaboration sent Momenta's stock skyrocketing by 38.08%, gaining $4.97 to end at $18.02 before giving up 2 cents in after-hours trading.

In the placement, Sandoz, which is Novartis Pharmaceuticals Inc.'s generic business, agreed to buy 4.7 million shares at $15.93 apiece, a 30% premium to Momenta's 30-day trailing average stock price.

The offering was conducted as part of Momenta's collaboration to develop four follow-on and complex generic version of previously approved recombinant biotechnology and complex drugs with Sandoz.

According to the terms of the collaboration, Momenta can expect to receive up to $188 million in additional payments if it achieves all milestones on the four product candidates.

The new collaboration will expand the two companies' existing partnership to develop M-Enoxaparin, a generic version of Lovenox to treat deep-vein thrombosis and other cardiovascular conditions.

"Complex generics and follow-on proteins are one of the most rapidly evolving areas of product development in the pharmaceutical industry," said Alan Crane, Momenta's CEO, in a news release.

"With the partnership, we believe we will be well-positioned to capitalize on this untapped potential and realize significant product value. Sandoz's decision to partner with Momenta across a spectrum of products highlights the broad potential of our analytic technology and the role that it can play in helping to set the standard for bringing well-characterized complex generic and follow-on protein products to market."

Headquartered in Cambridge, Mass., Momenta develops and engineers complex sugars used to develop generic versions of sugar-based and other complex drug products.

PIPE volume picks up

In the broader market, sellside market sources said improved stocks and merger and acquisitions may push more private placements through the pipeline in the coming week or two.

"We're seeing a lot of deals hooked up to some acquisition or another," said one sellsider based in New York. "It's a quick way to fund a big transaction like that and you can generally negotiate a bit better [pricing] if you're merging into a bigger company."

In fact, several offerings that closed Tuesday were connected to mergers, including the previously mentioned Brookdale offering.

"I'd say that's a pretty accurate assumption," said another sellsider, this one based in San Francisco. "It'd be hard to get any slower than it had been though. Stocks have been down, down, down and now they're up, up, up, so you do the math."

The Dow Jones Industrial Average ended Tuesday up 52.66 to close at 11,103.71; the Nasdaq composite index climbed 12.06 to end at 2,073.90; and the Standard & Poor's 500 composite index edged up 7.97 to settle at 1,268.88.

Wentworth raises $30.85 million

Heading to the energy sector, Wentworth Energy, Inc. concluded a private placement of convertible notes for $30.85 million Tuesday, sending its stock down by more than 6.5%.

The stock fell 6.67%, or 15 cents, to end at $2.10 Tuesday (OTCBB: WNWG).

The 9.15% notes are due July 25, 2009 and are convertible at $1.40 each.

The investors received warrants for 44,071,430 shares, exercisable at $1.40 each for five years.

Proceeds will be used for acquisitions, ongoing development in Texas and general corporate purposes.

Fort Worth, Texas-based Wentworth is an oil and natural gas exploration and development company focused on projects in the Gulf Coast and eastern Texas.

Semafo's $20 million deal

Elsewhere in resources, Semafo Inc. sealed a $20 million loan facility with Natexis Banques Populaires, a Paris-based financial institution and issued warrants along with the deal.

The five-year loan bears interest at 8.5% annually.

Natexis Banques Populaires received warrants for 800,000 shares, exercisable at C$2.25 each for five years.

On Tuesday, the company's stock gained 1.54%, or 3 cents, to close at C$1.98 (Toronto: SMF).

Proceeds from the offering will be used to construct the company's Mana mine and to acquire mining equipment. The remainder will be used for general corporate purposes.

Montreal-based Semafo is a gold exploration company.

China Agro gets equity line

New York's China Agro Sciences, Inc. secured a $10 million equity line agreement with Dutchess Private Equities Fund, LP.

Over the next three years, Dutchess may buy shares of China Agro at 94% of the lowest closing bid price for the five trading days after notice of a draw.

American Union Securities was the placement agent.

The company's stock remained unchanged at $1.45 (OTCBB: CHAS).

China Agro was acquired by Dalian Raiser Chemurgy Co. Ltd. and is currently a business development company.

Earth Biofuels' stock closes down

Earth Biofuels, Inc. saw its stock dip on Tuesday after wrapping a $52.5 million private placement of convertible notes.

The stock fell 8.46%, or 27 cents, to close at $2.92 (OTCBB: EBOF). On Monday, when the deal closed, the stock dropped by 22 cents, or 6.45%, to settle at $3.19.

The 8% notes are convertible at $2.90 each, a 15% discount to the company's $3.41 closing stock price July 21.

Cowen & Co. was the placement agent.

Earth Biofuels, based in Dallas, develops alternative fuels, including biodiesel.

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