Freedom arranges $25 million stock sale; York will use £3.92 million to fund rights to new drugs

By Devika Patel

Knoxville, Tenn., July 31 - Freedom Bank, a Florida community bank, announced Thursday that it could raise $20 million and as much as $25 million in a private placement of shares and will add two members to its board of directors from the among the equity investors.

On the news, shares of the bank (OTCBB: FBBF) remained unchanged on Thursday, closing at $0.90.

Meanwhile, York Pharma plc completed a £3.92 million sale of ordinary shares, which the company hopes will help it fund the acquisition of the sales and worldwide commercial rights to two leading dermatological wound care products, Flammazine and Flammacerium.

Freedom Bank's $25 million

Bradenton, Fla.'s Freedom Bank said it has negotiated a deal with Community Bank Investors of America, LP in which Community Bank will buy Freedom's common shares in multiple tranches. The company expects to raise between $20 million and $25 million.

Community Bank has signed an agreement to buy at least $5 million of the shares, priced at $1.00 per share, later this year.

As a part of the agreement, two of Community Bank's principals, Laurence C. Fentriss and Timothy A. Anonick, will be elected to Freedom Bank's board of directors upon closing of the sale.

The proceeds of the stock sale will be used to maintain the community bank's tier one leverage capital ratio at a level acceptable to banking regulators.

"Entering into a definitive agreement with Community Bank is a significant accomplishment for Freedom Bank," Freedom Bank chairman Howard Seider said in a press release.

"Community Bank is a highly regarded organization and having Messrs. Fentriss and Anonick joining our board to assist president and chief executive officer David Zuern in managing the current challenges and building the bank for the future gives Freedom Bank a level of management expertise and industry reputation rarely seen in a bank of Freedom's size," Seider concluded in the deal's announcement.

The Community Bank agreement is conditioned on the bank raising at least an additional $15 million in capital from other investors.

On this point, president and chief executive officer Zuern commented, "Due to the current banking climate, capital raising has taken some time, as many investors have adopted a 'wait and see' posture as it relates to community bank investments.

"However, we believe having the agreement with Community Bank for the first $5 million in hand is already opening many doors for Freedom Bank as Community Bank has a well-deserved reputation for successful community bank investments.

"Investors with whom we have previously spoken are expressing renewed interest in participation."

Kendrick Pierce & Co. is the agent.

York Pharma wraps £3.92 million

York Pharma, a Milton Keynes, England-based pharmaceutical company focused on dermatology products, has raised money to help it acquire the rights to two new dermatological wound care products from Solvay Pharmaceuticals BV as well as to provide increased working capital.

The company's shares (London: YRK) rose 4.74%, or 1.56p, to close at 34.5p on Thursday.

The placement consisted of 8,904,611 shares sold at 44p per share. Investors also received 1,149,997 warrants, exercisable at 50p until Feb. 16, 2009.

Both of the new products the company plans to acquire with these funds, Flammazine and Flammacerium, contain silver sulfadiazine and are approved in 21 countries for the prevention and treatment of infections in burn wounds and topical wound infections. Silver sulfadiazine is also available in a combination with cerium nitrate.

The global market for topical anti-infective products is estimated to be valued at $445 million, the company said in a news release.

Currently, sales of the drugs are concentrated in the major European markets of France, Germany, Belgium and Spain.

The acquisition of the two products by York Pharma will provide an opportunity to grow their sales in these key territories and to extend the brands' reach into new geographic markets. The North American market is a key strategic area for York Pharma's future expansion, it said in the release.

"We are very grateful to shareholders for their support in this fundraising and look forward to completing the acquisition of the Solvay brands in the first half of August," York Pharma chief executive officer Terry Sadler said of the drug acquisition and share sale in the press release.

"We believe that the addition of these brands will substantially broaden our offering in the dermatology and wound care markets and are confident that we can maximize their potential under our ownership."

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