Banking & Finance

Secondaries Keep Flooding In (DVR, FSP, HBAN, MWA, NMM, HEAT, SAH, SXCI, VVUS, BRKR)

You know the market is still strong when secondary floodgates open up and are so well received that so many deals are seeing increased offerings.  Some of the deals we have seen this morning alone are Cal Dive International Inc. (NYSE: DVR), Franklin Street Properties Corp. (NYSE: FSP), Huntington Bancshares Incorporated (NASDAQ: HBAN), Mueller Water Products, Inc. (NYSE: MWA), Navios Maritime Partners L.P. (NYSE: NMM), SmartHeat Inc. (NASDAQ: HEAT), Sonic Automotive Corp. (NYSE: SAH), SXC Health Solutions (NASDAQ: SXCI), and VIVUS Inc. (NASDAQ: VVUS).  Of the deals that priced today, the total came to more than $1.4 billion.  We have also seen a new filing out of Bruker Corporation (NASDAQ: BRKR) for selling family members not tied to the business.  Full details and some added color on each deal are provided below.

Cal Dive International Inc. (NYSE: DVR) is seeing fairly active trading after it priced a 20.6 million share secondary offering of common stock at $10.00.  All shares are being sold by Helix Energy Solutions Group, Inc. (NYSE: HLX) in a sale conducted by Credit Suisse and BofA Merrill Lynch.

Franklin Street Properties Corp. (NYSE: FSP) is trading down by about 10 after its 8 million share secondary offering priced at $13.00 through Robert W. Baird.  This is after closing at $14.76 yesterday and was increased from a previously announced offering size of 6,000,000 shares. The use of proceeds will be for the repayment of outstanding debt.

Huntington Bancshares Incorporated (NASDAQ: HBAN) was supposed to sell 78 million shares oif common stock in a public secondary offering, but the size was bumped up.  It sold 95.2 million shares of its common stock at $4.20 per shares  a price to the public of $4.20 per share after closing at $4.51 Thursday.  Goldman Sachs is the book-running manager and Sandler O’Neill & Partners, L.P. is co-manager.

Mueller Water Products, Inc. (NYSE: MWA) is trading up after it priced a 32.28 million share secondary offering of common stock at $4.75 through BofA Merrill Lynch and Goldman Sachs.  The original amount of shares was to be 27.5 million shares and gross proceeds is to be used to purchase additional shares and to repay a portion of indebtedness outstanding under its credit agreement.

Navios Maritime Partners L.P. (NYSE: NMM) priced its 2,800,000 common units public offering of limited partnership interests at $12.21 per unit, down from a $13.06 closing price on Thursday. Navios Partners expects to use the proceeds to fund its fleet expansion and for general partnership purposes.  Joint book running managers for this offering are Citi and J.P. Morgan, while co-managers are listed as S. Goldman Advisors LLC, DVB Capital Markets, and Cantor Fitzgerald.  Shares are down 9% at $11.85 and the market cap here is listed as $293 million after the drop and before the effects of this offering.

SmartHeat Inc. (NASDAQ: HEAT) sold 7,246,087 shares of common stock at $9.00 per share after closing at $10.06 yesterday.  The size of the offering was increased from 5,000,000 shares based on strong demand and it granted the underwriters an over-allotment option to purchase 1,086,913 additional shares of common stock.  William Blair is the sole book-running manager and BMO Capital Markets is co-lead manager.  This is an interesting and under-followed company in China’s clean technology, energy savings industry as it makes standard plate heat exchangers, custom plate heat exchanger units and heat meters.  They must like it a lot because shares are up 13% at $11.44 on almost 2 million shares right after the open.  This even hit a 52-week high of $11.59 this morning.

Sonic Automotive Corp. (NYSE: SAH) priced two offerings, one debt and one stock.  It is selling 9 million shares at $10.10 through J.P. Morgan and BofA Merrill Lynch.  It is concurrently selling $150,000,000 aggregate principal amount of convertible senior notes due October 1, 2029.  The total gross proceeds from the offerings will be approximately $240.9 million and its current market cap before the effect of the offering is listed as $421 million.  Interestingly enough, Sonic Automotive is up almost 3% at $10.45 this morning.

SXC Health Solutions (NASDAQ: SXCI) sold 4,500,000 shares of common stock in a public secondary offering that priced at $41.50 per share.  This deal was sold through J.P. Morgan, Dougherty, SunTrust Robinson Humphrey, and Versant, and the offering size was originally supposed to only be 3.5 million shares.  The $176 million in gross proceeds is earmarked for general corporate purposes.  Its market cap before this offering was listed as $1 billion, but shares are up 5% at $43.87 and the 52-week high is $44.67.

VIVUS Inc. (NASDAQ: VVUS) is trading up after it priced a 9,000,000 share public secondary offering at $10.50 through J.P. Morgan, and JMP Securities, Lazard Capital Markets, and Merriman Curhan Ford are acting as co-managers.  Based upon the rise seen already, we expect that the 30-day overallotment option to purchase up to  1,350,000 shares will be exercised.  Shares are up 8% at $11.45 and this gives more R&D and launch capital for its obesity drug that is expected to be approved in 2010.

We have also seen a filing out of Bruker Corporation (NASDAQ: BRKR) for a proposed public secondary offering of 12,000,000 shares of common stock being sold by two members of the Laukien family not involved in the company’s business.  Goldman Sachs, J.P. Morgan, and Deutsche Bank are listed as joint book-running managers.

This is not even the full tally as there are several much smaller deals on the books as well.  Today’s deals that priced came to a total of right at $1.475 billion, and that is before the effects of any over-allotments.

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September 18, 2009

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