Atlas Pipeline wraps $30 million PIPE; LSB pockets $18 million from Rule 144A deal

By Sheri Kasprzak

New York, March 14 - Atlas Pipeline Partners, LP led private placement activity Tuesday settling a $30 million convertible preferred offering that sent its stock down slightly.

Atlas issued 30,000 units of cumulative convertible preferred units of limited partner interest to Sunlight Capital Partners, LLC, an affiliate of Elliott Associates, LP, at $1,000 apiece.

The offering sent the company's stock down 0.12%, or a nickel, to close at $41.20 (NYSE: APL).

The placement wrapped after market close on Monday.

Sunlight has the option to buy another 10,000 preferred units before June 11.

The preferred units pay annual dividends at 6.5% after March 13, 2007 and are convertible into common units at the lesser of $0.41 or 95% of the average closing price of the company's stock for the 10 trading days before conversion.

Proceeds will be used to construct the company's Sweetwater plant and to finance other growth projects.

As to the company's latest earnings report, Atlas reported net income of $25,752,000 for the year ended Dec. 31, 2005, compared with net income of $18,334,000 for the year ended Dec. 31, 2004.

Located in Moon Township, Pa., Atlas acquires and operates natural gas exploration companies.

Elsewhere in the PIPE market Tuesday, LSB Industries Inc. closed an $18 million private placement of convertible debentures under Rule 144A at a 27% initial conversion premium.

The placement sent the stock up a touch with it gaining 5 cents, or 0.8%, to finish at $6.35 (Amex: LXU).

Six institutions bought the 7% debentures, which are due March 1, 2011.

The debentures feature a staggered conversion price. The initial conversion price is $8.00, a 27% premium to the company's closing stock price of $6.30 on March 13. From Sept. 1, 2006 through March 1, 2009, the conversion price will change every six months beginning at $7.08 and ending at $7.74. From March 1, 2009 through maturity, the conversion price will return to $8.00.

J. Giordano Securities Group was the bookrunner for the offering.

A market source said Tuesday that the staggered conversion price prevents accounting problems following the passage of new rules from the Securities and Exchange Commission covering embedded derivatives.

In the case of LSB, a provision like a make-whole coupon, which would ensure investors receive the full amount of interest due should the issuer repay the note early, may cause some "accounting nightmares" under the new rules. However, a staggered conversion premium would eliminate some accounting problems, the market source said.

LSB intends to use the proceeds from the deal to repay existing debt. The rest will be used for general corporate purposes.

Looking to the company's latest earnings statement, LSB reported net income of $2,077,000 for the quarter ended June 30, 2005, compared with net income of $1,601,000 for the same quarter of 2004.

Oklahoma City-based LSB manufactures climate-control products.

Services stock jumps 20.8%

Services Acquisition Corp. International, which is preparing to close a $205.5 million PIPE as part of its acquisition of Jamba Juice Co., saw its stock skyrocket a day after the offering was announced.

The stock climbed 20.81%, or $1.79, to close the day at $10.39 (Amex: SVI).

On Monday when the deal was announced, the company's stock gained 14.97%, or $1.12, to close at $8.60.

In the placement, Services will sell 27.4 million shares at $7.50 each, a slight premium to the company's closing stock price of $7.48 on March 10.

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

Jamba is a San Francisco-based juice bar operator.

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

Chapeau raises $3 million

Another manufacturing company, Chapeau, Inc., polished off a $3 million private placement of convertible promissory notes with an existing investor - the Gordon V. and Helen C. Smith Foundation.

The offering was announced Tuesday afternoon, and the company's stock gained more than 10.5%. The stock advanced 10 cents, or 10.53%, to end at $1.05 (OTCBB: CPEU). On Monday, the stock had gained 15 cents.

The 12% notes mature March 10, 2009 and are convertible into common shares at $1.25 each for the first year. After the first year, the notes become convertible at the lesser of 75% of the average closing bid price of the company's stock for the 90 trading days before conversion or $1.25.

The initial conversion price represents at 56.25% premium to the company's closing stock price of $0.80 on March 10.

Based in Sparks, Nev., Chapeau develops engines that circulate emissions to produce additional power.

Golden Band prices C$3.5 million deal

Among Canadian issuers, Golden Band Resources Inc. priced a C$3.5 million unit deal to head up PIPE activity in Canada.

The non-brokered offering includes 7,777,778 units of one share and one warrant at C$0.45 each. The warrants allow for the purchase of another share at C$0.65 each for two years.

Proceeds will be used for exploration on the company's La Ronge project in Saskatchewan and for working capital.

The stock slipped 1 cent to close at C$0.45 (TSX Venture: GBN).

Located in Saskatoon, Sask., Golden Band is a gold exploration company.

In other Canadian offerings, Advantex Marketing International Inc. settled a C$3 million stock deal.

The company issued 37,037,037 shares at C$0.081 each, a 57.3% discount to the company's closing stock price of C$0.19 on March 13.

The deal was first announced as a C$2 million offering but was increased due to investor demand, according to a statement from the company.

"We are pleased with the strong response and confidence expressed by the investment community in the company," said G. Randall Munger, the company's CEO, in a statement. "The completion of this financing is a key step toward achieving our growth strategy."

Proceeds will be used for growth initiatives and for working capital.

The stock closed unchanged at C$0.19 Tuesday (Toronto: ADX).

Based in Toronto, Advantex is a marketing services company.

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