Matrix raises $30 million in convertible notes; resources continue to make comeback

By Sheri Kasprzak

Atlanta, April 25 - Matrix Service Co. led private placement news Monday with word that it closed a $30 million offering of convertible notes.

The notes bear interest at 7% annually, are due April 25, 2010 and are convertible into common shares at $4.69 each.

"Conversion price looks good for them," said one market source who had seen the deal. "[Their] stock had responded well early on and they still closed up, so I'd say it went well."

The company's stock closed up $0.11 at $4.04 Monday.

On the same day, Matrix announced that it has increased a revolving credit facility it received April 8 to $35 million from $32 million.

JP Morgan Chase Bank, NA was the placement agent in the stock offering.

Based in Tulsa, Okla., Matrix provides industrial construction and repairs for the petroleum, petrochemical, bulk storage terminal, pipeline and industrial gas industries. The company will use $20 million of the proceeds to repay a term note with an 18% interest rate. The remainder will be used for additional liquidity and for working capital.

Elsewhere in the market, sell-siders said they felt offerings were scarce Monday, despite improved stocks.

"There's really not much to report today," said one U.S.-based sell-side source. "Nothing I can really say in particular [affecting volume]."

One sell-sider said he felt resources are continuing to make a comeback.

"We have several areas within the resources sector that are really seeing improved stocks," said the source. "We're seen some real improvements in gold and silver, minerals are getting better as well, so these are the types of deals you're going to be seeing more of."

Choice prices C$10 million deal

Choice Resources Corp. priced a C$10 million private placement it announced earlier this month

The company plans to sell 10 million common-share units at C$0.65 each and 4,666,667 flow-through shares at C$0.75 each.

The units are comprised of one share and one half-share warrant. The whole warrants allow for an additional share at C$1 each for 18 months.

"It looks pretty good to me," said one market source who had seen the deal. "The warrants are at a really solid premium, so that will be good.

"The flow-through shares priced well, so I'd say it will go well. I'd say they probably waited to price this deal because of some of the instability with oil prices over the past couple of weeks. This was probably the most stable time they could get it done."

A syndicate of underwriters led by Research Capital LLC and including CIBC World Markets Inc., Dundee Securities Inc. and Wolverton Securities Ltd. has an over-allotment option for up to C$5 million.

Based in Calgary, Alta., Choice is an oil and natural gas exploration company. The proceeds from the flow-through shares will be used to fund exploration expenditures. The proceeds from the units will be used for an expanded capital budget and for general corporate purposes.

The company's stock closed unchanged at C$0.62 on Monday.

Apex's $5.5 million direct deal

Moving away from private placements, Apex Silver Mines Ltd. raised $5,570,027 in a direct placement.

The company sold 357,741 shares at $15.57 each to San Cristobal Transportadora de Electricidad SA.

There is no discount on the offering, which was priced according to the company's closing stock price on April 12.

The shares are being sold under Apex's shelf registration.

"We have seen some improvements in silver stocks, generally speaking," said one market source. "It doesn't hurt that it was a direct deal, so they had a little more room to name their price, so to speak."

After the deal was announced Monday morning, Apex's stock dropped $0.10 to close at $15.

Based in George Town, Cayman Islands, Apex is a silver exploration company. It plans to use the proceeds from the deal to design and construct a power line to supply its San Cristobal project.

Beacon closes $4.4 million deal

Beacon Power Corp. wrapped a $4.4 million private placement of stock with Perseus, LLC.

The company sold 5,310,802.65 shares at $0.8285 each to Perseus with $2.9 million in proceeds received so far. The remainder of the proceeds will be received during and after the company's acquisition of NxtPhase T&D Corp., a private Canadian company that provides digital and fiber optic products for electric power and grid monitoring.

Perseus will receive warrants for up to 1.22 million shares, exercisable at $1.01 each.

Beacon will purchase NxtPhase for 15.7 million common shares and immediately after closing Beacon will grant restricted stock units for 2.7 million common shares to NxtPhase's employees.

"The global electric power infrastructure requires a technology overhaul," said John Fox, managing director at Perseus and NxtPhase board member, in a statement. "We are committed to funding strong companies that can offer innovative solutions to serve this sector and, in doing so, build the foundation for a solid long-term investment."

Based in Wilmington, Mass., Beacon designs energy storage and power conversion devices to provide electric power for the utility, renewable energy and distributed generation markets.

The company's stock closed unchanged at $0.96, but lost $0.02 in after-hours trading.

Geron wraps $4 million offering

Geron Corp. completed a direct placement with Hong Kong-based investors for $4 million.

The company sold 741,000 shares at $5.40 each.

The investors also received warrants for 370,000 shares, exercisable at $5.40 each for five years.

The shares were sold under Geron's shelf registration.

The company conducted the direct placement to meet commitments to TA Therapeutics, Ltd., a company Geron has half ownership of with Biotechnology Research Corp.

"The formation of TAT was important for Geron because it allowed us to capitalize on the development of our compounds, which, if they prove efficacious, have potential to be used in a number of disease indications," said David Greenwood, Geron's executive vice president and chief financial officer, in a statement.

"A number of investors in Hong Kong expressed interest in TAT. This placement, which funds Geron's financial commitment to TAT, is a means for this group to promote the joint venture. We are very pleased with the relationships Geron has formed in Hong Kong and the support we have received. We look forward to the potential for building on this foundation."

Based in Menlo Park, Calif., Geron is a biopharmaceutical company that develops therapeutic products for oncology, pharmaceuticals to treat tissues affected by senescence, injury or degenerative diseases, and cell-based therapies derived from human embryonic stem cells.

BearingPoint's stock down

After pricing a downsized $200 million - from its previously announced $250 million - 20-year convertible debenture offering after the close Thursday, BearingPoint's stock slid Monday.

The company's stock closed down $0.06 at $5.72 on Monday.

On Friday, when the company announced that it has trimmed the deal, the company's stock made a comeback, gaining $0.50 to close at $5.78. After the deal was first announced, the company's stock dipped $2.49, or 32%, to close at $5.28.

The debentures have a 5% coupon and 25% initial conversion premium.

Based in McLean, Va., BearingPoint is a management consulting company.

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