Whole Foods raises $425 million; Macatawa wraps deal; CMA to sell stock; Octavian sells convertibles

By Kenneth Lim

Boston, Nov. 5 - Whole Foods Market, Inc. is raising $425 million through a sale of preferred stock to a retail investor.

Macatawa Bank Corp. wrapped up a $26.19 million convertible offering to boost its capital ratios.

Australia's CMA Corp. Ltd. will take in A$11.25 million through a strategic stock placement to metal recycler Scholz AG.

Octavian International Ltd. said it sold $14.29 million of convertible debentures in a private placement as part of a reverse merger.

Whole Foods sells to Green Equity

Whole Foods Market plans to place $425 million of 8% series A preferred stock due 2020 with investment firm Leonard Green & Partners, LP's affiliate Green Equity Investors V, LP.

Each preferred has an initial conversion price of $14.50, an initial conversion premium of 32% over Whole Food's closing common stock price on Tuesday. Whole Foods common stock (Nasdaq: WFMI) closed at $10.31 on Wednesday, lower by 6.19% or $0.68.

Whole Foods is an Austin, Texas-based operator of natural and organic foods supermarkets.

"We are pleased that Leonard Green & Partners, LP, one of the most experienced and successful investors in the retail industry, has decided to make such a significant investment in Whole Foods Market," Whole Foods chairman and chief executive John Mackey said in a press release.

"We view it as a strong vote of confidence in our business model and our long-term growth prospects, despite the current economic environment. This investment, combined with our strong cash flow from operations, gives us the financial flexibility to manage through these difficult economic times while continuing to prudently invest in our long-term growth."

Leonard Green managing partner Jonathan Sokoloff added: "Whole Foods Market is an exceptional company that has revolutionized how consumers shop for natural and organic products. We are pleased to make this investment and look forward to a partnership with the board and management team to drive long-term growth, profitability and value for all shareholders."

Macatawa sells convertibles

Macatawa Bank said it placed $26.19 million of 12% series A non-cumulative convertible preferred stock to West Michigan investors.

The deal involved 26,190 preferreds at $1,000 apiece. Each preferred is convertible into common stock at $8.95 per share. Macatawa common stock (Nasdaq: MCBC) ended at $4.50 on Wednesday, down by 6.05% or $0.29.

Proceeds will be used to enhance Macatawa's capital ratios, and allow the company to continue making loans to customers and strengthen its balance sheet.

Macatawa is a Holland, Mich.-based financial holding company.

"We are gratified by West Michigan's continued confidence in the financial strength and prospects of Macatawa Bank," Macatawa chairman and chief executive Ben Smith said in a statement. "During the third quarter, we announced our intention to raise additional capital in order to maintain our financial strength and enhance our lending capabilities. Our local investors demonstrated their confidence in our bank."

"The additional capital will improve our capital ratios, liquidity and better position us to take advantage of lending opportunities in our market," he added. "We and our investors are confident in the future of West Michigan and are committed to our community for the long term."

CMA plans Scholz deal

CMA said it is placing A$11.25 million of its common stock with metal recycler and trader Scholz as part of a strategic partnership between the two companies.

The placement comprises 45 million shares at A$0.25 apiece. CMA common stock (ASX: CMV) gained 20% or A$0.04 to close at A$0.24 on Wednesday.

Based in Sydney, Australia, CMA is a scrap metal recycling group.

As part of the deal, Scholz and CMA will enter into a strategic partnership that includes Scholz helping to roll out CMA's technology in Europe and the United States.

"Scholz is one of the world's largest scrap companies with operations throughout Europe, U.S., Mexico and China and is an extremely prestigious company for us to be aligned with," CMA managing director Doug Rowe said in a statement. "In addition, we believe the premium Scholz has paid is a reflection of its confidence in CMA's business model and our potential for growth."

Octavian completes placement, merger

Octavian International said it placed $14.29 million principal amount of three-year convertible debentures through a private placement as part of a reverse merger with HouseFly, Inc.

The debentures were sold at a 9% discount, giving Octavian International proceeds of $13 million.

The initial conversion price was set at $3.10. Investors also received five-year warrants for up to about 2.1 million common shares at $3.10 per share, seven-year warrants for up to about 2.1 million common shares at $4.65 per share and about 4.62 million common shares.

Octavian International completed a reverse merger with public shell company HouseFly, Inc. HouseFly (OTCBB: HSLY) changed its name to Octavian Global Technologies, Inc. after the merger, but the new stock has not traded.

The five-year warrants are exercisable at $3.10; the seven-year warrants are exercisable at $4.65.

London-based Octavian is a provider of total gaming and lottery solutions. Housefly (OTCBB: HSLY) has not yet begun trading.

"This transaction allows us to forge ahead with many exciting opportunities that we have been planning and developing for some time," Octavian chief executive Harmen Brenninkmeijer said in a statement. "It also allows us to invest further in solution development...This will enable us to invest in our customers' future success by working with operators to maximize the business benefits of our new Octavian EasyStart casino system."

"Our strategy has always been to seek out and nurture opportunities in growth markets across the gaming world," Brenninkmeijer added. "Now, with strong backers, we can capitalize on those opportunities and take Octavian to the next level. Nevertheless, our core positioning as a strong and innovative, technology-focused company remains unchanged. We will continue to grow our technologies into major business-building pipelines, through which our customers can manage their gaming operations and generate and deliver business success."

© 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.