MoneyGram gets $760 million payday; Corcept snags $60 million equity line

By Laura Lutz

Des Moines, March 28 - Friday's stand-out deal came from MoneyGram International, Inc., which announced the settlement of a $760 million private placement of preferred stock.

As usual, the biotech sector was prominent in the day's PIPE news. Corcept Therapeutics Inc. picked up a $60 million equity line; Oculus Innovative Sciences, Inc. priced a $13.93 million offering of units; and Pharmasset, Inc. settled another $10 million of its $30 million financing with warrants.

Meanwhile, Metalico, Inc. said it will raise $28.51 million from a stock placement.

MoneyGram pockets $760 million

MoneyGram International, Inc. sold 495,000 shares of series B participating convertible preferred stock and 265,000 shares of series B-1 participating convertible preferred stock, according to an 8-K filing.

Affiliates of Thomas H. Lee Partners, L.P. and affiliates of Goldman, Sachs & Co. were the investors.

The preferred shares will initially be convertible into about 79% of the common equity of MoneyGram, and the percentage will increase if the company decides to accrue dividends instead of paying cash dividends.

The series B preferred stock is convertible into common shares at an initial conversion price of $2.50 per share and the series B-1 preferred stock is convertible into shares of series D participating convertible preferred stock.

The placement priced on March 17 and settled on March 25. It was part of a recapitalization plan that also included $500 million of debt financing from Goldman Sachs affiliates and another $250 million of senior debt financing.

"With the completion of this important transaction, MoneyGram now has the financial resources to support our customers and their growth plans," Philip W. Milne, president and chief executive officer of MoneyGram said it a news release.

When plans for the recapitalization were first announced in January, the company said the deal was designed to support realignment of its portfolio away from risk associated with the asset-backed security market and to provide enough financial flexibility to support the long-term needs of the business.

In today's release, Milne expressed optimism about the company's outlook.

"The extension of our agreements with Wal-Mart Stores, Inc. and ACE Cash Express are very important developments for MoneyGram," he said. "Our money transfer business continues to enjoy excellent growth and last month we surpassed a significant milestone by adding our 150,000th agent location."

MoneyGram is a Minneapolis-based provider of payment services.

The company's stock unchanged closed at $1.99 on Friday before gaining 2.83 cents in after-hours trading (NYSE: MGI).

Corcept gets $60 million equity line

Corcept Therapeutics arranged a $60 million, three-year committed equity financing facility with Kingsbridge Capital Ltd., according to an 8-K filed on Friday.

The deal was arranged on March 25.

Corcept can access up to $10 million from Kingsbridge in each tranche, in exchange for newly issued common shares.

In total, Corcept may not issue more than 9.6 million shares under the agreement.

Each tranche will be issued and priced over an eight-day pricing period. Kingsbridge will buy common shares at discounts ranging from 6% to 10%, depending on the average market price of the common stock during the eight-day pricing period.

The minimum acceptable purchase price for any shares Kingsbridge may buy is determined by the higher of $1.50 or 90% of Corcept's common stock closing price the day before each draw down.

Kingsbridge also received a five-year warrant for 330,000 shares, exercisable at $3.525.

Menlo Park, Calif.-based Corcept develops medications for severe psychiatric and metabolic diseases.

The company said it will some of use the proceeds to conduct a new phase 3 clinical trial for its Corlux product, which is intended to treat psychotic depression, and to conduct clinical trial on the management of weight gain induced by antipsychotic medications.

The rest will be used for other drug development and general corporate purposes.

Corcept's stock lost 3.6 cents, or 1.14%, to finish Friday at $3.134 (Nasdaq: CORT).

Oculus to sell units

A few miles north, Oculus Innovative Sciences, Inc., said it has arranged a $13.93 million direct offering of units.

The Petaluma, Calif.-based company said it will sell 2,652,673 units at $5.25 apiece under a shelf registration that was declared effective on Feb. 26.

Each unit consists of one common share and one half-share warrant. Each whole warrant will be exercisable at $6.85.

Rodman & Renshaw, LLC is the agent. The deal is expected to settle April 1.

Proceeds will be used for general corporate purposes, including preparations related to a planned phase 3 clinical trial, for working capital and operational purposes, and future acquisitions and strategic investment opportunities.

Oculus develops and markets products for the prevention and elimination of infection in chronic and acute wounds.

Its stock fell $1.79, or 26.17%, to close at $5.05 on Friday (Nasdaq: OCLS).

Pharmasset raises $10 million

Pharmasset, Inc. said it has settled a second $10 million tranche under its $30 million working capital loan agreement with Horizon Technology Finance LLC.

The loan was arranged in September, and the company closed an initial $10 million tranche in October.

At Pharmasset's option, it may receive a third loan of $10 million by Nov. 30, 2008.

In connection with the agreement, Horizon received a seven-year warrant for up to 149,377 common shares with a strike price of $12.05 per share.

The warrant is exercisable for up to 66,390 shares associated with the first loan and up to 49,793 shares associated with the second loan. It will become exercisable for the remaining 33,194 shares if the third loan settles.

The loan amounts will bear interest at 12% per year and mature in 45 months.

Pharmasset's chief financial officer, Kurt Leutzinger, expressed satisfaction with the deal in a news release on Friday.

"In light of the recent stock market volatility, this facility has proved to be valuable in providing flexibility regarding the timing of any future equity financings," Leutzinger said.

The Princeton, N.J.-based pharmaceutical company is focused on treatments for viral infections.

Its stock gained 7 cents, or 0.39%, on Friday to close at $17.95 (Nasdaq: VRUS).

Metalico prices $28.51 million

Metalico, Inc. has negotiated a $28.51 million private placement of stock and warrants, according to an 8-K filed on Friday.

The company will sell 2,925,000 common shares at $9.75 per share along with 1.17 million warrants.

Each warrant will be exercisable at $12.65 for six years.

Canaccord Adams, Inc. is the agent.

Metalico is a Cranford, N.J., scrap metal recycler and lead products fabricator. Its said it will use the proceeds to reduce debt, fund potential acquisitions and for general corporate purposes.

"The proceeds from this equity offering will help position us to take advantage of opportunities in the marketplace and fuel our continued growth," Carlos E. Aguero, Metalico's president and chief executive officer, added in a news release.

The company's stock lost 86 cents, or 8.15%, to end Friday at $9.69 (Amex: MEA).

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