PrivateRaise Releases First Quarter PIPE Market Activity and League Tables;
Venture Capitalists Emerge as Active Investors Amid Slowest Period Since 2002
NEW YORK -- Private placements of equity securities by publicly traded companies decreased again in the first quarter in both the number of transactions and investment volume, as the traditional investors in the market remained on the sidelines and the financial rescue mega-deals that marked the previous quarter's activity receded from prominence, according to data tracked by PrivateRaise, a service of DealFlow Media (www.dealflowmedia.com/privateraise).
Public companies closed 190 PIPEs, raising $10.28 billion in the first quarter, a 5% decrease in deals but a 72% decrease in capital investment over the previous quarter. The low number of closed deals marked only the third time since 2001 that total quarterly PIPE market issuance dropped below 200 deals, and nearly reached the market's nadir in the third quarter of 2002, when only 180 deals were completed.
Compared to the year-ago quarter, deal activity fell 36% while total investment plummeted 76%. Unlike the previous four quarters, PIPE issuance in the first quarter was not dominated by financial institutions, but by life science and natural resource companies, the market's traditional leading sectors. Media companies emerged as the third largest sector for total investment, raising $931.5 million in seven deals.
Specifically, pharmaceutical companies led the market with 23 deals, raising $345 million, followed by biotech companies raising $255 million in 20 deals. Metals and minerals companies led in total investment, with $4.75 billion raised in 12 deals, representing 46% of total investment in the market for the quarter. Mining companies raised an additional $473 million in eight deals.
Investment volume in PIPEs fell as the multi-billion dollar recapitalization activity by large-cap financial firms at the center of last year's credit crisis ebbed and the market reverted to its traditional focus on small-cap emerging growth companies. Five companies with market caps in excess of $1 billion raised $5.28 billion in the first quarter, compared to 17 which raised $33.2 billion in the fourth quarter of 2008.
As the financial rescue-related "mega-PIPEs" of 2008 recede into history, the prominence of convertible structures over straight common stock deals likewise is beginning to revert to more traditional levels. Common stock PIPEs accounted for 47% of the deals and 24% of the total investment in the first quarter. Convertible structures accounted for 32% of deals, and 57% of investment, down from representing 81% of investment in the year-ago quarter.
"While the first quarter was not dominated by the multibillion dollar convertible deals of previous quarters, investors active in the market nonetheless remain defensive, and are relying on convertible structures to insulate themselves from market risk to the degree they can," said J.B. Summitt, Director of Research at PrivateRaise. "It suggests that PIPE market investors have yet to come to a consensus on the level of downside risk remaining in the small-cap segment of the market."
In the aftermath of the financial crisis, a new type of investor may be emerging as a significant participant in the PIPE market, noted Brett Goetschius, Publisher at DealFlow Media and Editor of The PIPEs Report, which will release its full review of first quarter activity in its April 21 issue.
"Venture capital and private equity investors have emerged as leading participants in PIPE transactions for the first time," Goetschius said. "Together, they were involved in 20% of deals and accounted for 15% of total capital raised in the first quarter. Two years ago, their role in the market was negligible. Collectively, venture and PE firms invested nearly $1.5 billion into the PIPE market in the first quarter, three times the amount invested by hedge funds, the market's traditional capital suppliers."
Venture and PE funds' involvement in the market is changing the type of issuers seeking PIPE financing as well, Goetschius noted. "With the average deal size being $52 million, these investors are clearly interested in fundamental investments in larger, later-stage growth companies rather than the financially-engineered investments in nanocap issuers that hedge fund investors have focused on in the past. It suggests that we may be on the cusp of an era when the promise of PIPEs as 'public venture capital' will become a reality."
2009 Q1 PRIVATERAISE LEAGUE TABLES
| 2009 Q1 Top 25 PIPE Issuers |
||||
| (ranked by $ raised) | Raised $ (m) | Avg. $ (m) | Deals | |
1 |
Rio Tinto plc | $4,534.90 |
$2,267.45 |
2 |
2 |
Sirius XM Radio Inc. | $430.00 |
$215.00 |
2 |
3 |
Lihir Gold Limited | $324.45 |
$324.45 |
1 |
4 |
China Tel Group, Inc. | $300.00 |
$300.00 |
1 |
4 |
Colonial BancGroup, Inc. | $300.00 |
$300.00 |
1 |
6 |
Flagstar Bancorp, Inc. | $280.32 |
$140.16 |
2 |
7 |
Maiden Holdings, Ltd. | $260.00 |
$260.00 |
1 |
8 |
AbitibiBowater, Inc. | $250.00 |
$250.00 |
1 |
8 |
Fidelity National Information Services, Inc. | $250.00 |
$250.00 |
1 |
8 |
New York Times Company | $250.00 |
$250.00 |
1 |
11 |
Central European Media Enterprises Ltd. | $241.50 |
$120.75 |
2 |
12 |
Nuance Communications, Inc. | $175.00 |
$175.00 |
1 |
13 |
SkyTerra Communications, Inc. | $150.00 |
$150.00 |
1 |
14 |
Developers Diversified Realty Corporation | $112.50 |
$56.25 |
2 |
15 |
Yingli Green Energy Holding Company Limited | $100.00 |
$50.00 |
2 |
15 |
CommScope, Inc. | $100.00 |
$100.00 |
1 |
15 |
Pacwest Bancorp | $100.00 |
$100.00 |
1 |
15 |
Palm, Inc. | $100.00 |
$100.00 |
1 |
15 |
Seaspan Corporation | $100.00 |
$100.00 |
1 |
20 |
Cadence Pharmaceuticals, Inc. | $86.60 |
$86.60 |
1 |
21 |
American Apparel, Inc. | $80.00 |
$80.00 |
1 |
22 |
NovaGold Resources Inc. | $75.00 |
$75.00 |
1 |
23 |
Apollo Gold Corporation | $70.00 |
$70.00 |
1 |
24 |
Insulet Corporation | $60.00 |
$60.00 |
1 |
25 |
Clinical Data, Inc. | $50.00 |
$50.00 |
1 |
| 2009 Q1 Top 25 PIPE Placement Agents |
||||
| (ranked by # of deals placed) | Placed $ (m) | Avg. $ (m) | Deals | |
1 |
Rodman & Renshaw, LLC | $53.43 |
$10.69 |
5 |
2 |
Roth Capital Partners, LLC | $37.01 |
$9.25 |
4 |
3 |
Piper Jaffray & Co. | $62.09 |
$20.70 |
3 |
3 |
GMP Securities Ltd. | $42.35 |
$14.12 |
3 |
3 |
Philadelphia Brokerage Corporation | $16.93 |
$5.64 |
3 |
6 |
Macquarie Capital Advisors | $356.51 |
$178.25 |
2 |
6 |
Lazard | $124.30 |
$62.15 |
2 |
6 |
Genuity Capital Markets | $40.51 |
$20.26 |
2 |
6 |
Dundee Securities Corporation | $33.90 |
$16.95 |
2 |
6 |
Canaccord Capital Corp. | $24.35 |
$12.18 |
2 |
6 |
Midtown Partners & Co., LLC | $13.00 |
$6.50 |
2 |
6 |
Rockport Venture Securities, LLC | $6.00 |
$3.00 |
2 |
6 |
Green Barn Advisors, LLC | $4.00 |
$2.00 |
2 |
14 |
Goldman, Sachs & Co. | $324.45 |
$324.45 |
1 |
14 |
Friedman, Billings, Ramsey & Co., Inc. | $260.00 |
$260.00 |
1 |
14 |
SunTrust Robinson Humphrey | $250.00 |
$250.00 |
1 |
14 |
J.P. Morgan Chase & Co. | $60.00 |
$60.00 |
1 |
14 |
Pritchard Capital Partners LLC | $48.00 |
$48.00 |
1 |
14 |
Leerink Swann & Company | $45.52 |
$45.52 |
1 |
14 |
BMO Financial Group | $32.06 |
$32.06 |
1 |
14 |
Research Capital Corporation | $32.06 |
$32.06 |
1 |
14 |
TD Bank Financial Group | $32.06 |
$32.06 |
1 |
14 |
Thomas Weisel Partners LLC | $32.06 |
$32.06 |
1 |
14 |
RBC Capital Markets | $29.13 |
$29.13 |
1 |
14 |
Kaufman Bros., L.P. | $24.75 |
$24.75 |
1 |
| 2009 Q1 Top 25 PIPE Placement Agents |
||||
| (ranked by $ placed) | Placed $ (m) | Avg. $ (m) | Deals | |
1 |
Macquarie Capital Advisors | $356.51 |
$178.25 |
2 |
2 |
Goldman, Sachs & Co. | $324.45 |
$324.45 |
1 |
3 |
Friedman, Billings, Ramsey & Co., Inc. | $260.00 |
$260.00 |
1 |
4 |
SunTrust Robinson Humphrey | $250.00 |
$250.00 |
1 |
5 |
Lazard | $124.30 |
$62.15 |
2 |
6 |
Piper Jaffray & Co. | $62.09 |
$20.70 |
3 |
7 |
J.P. Morgan Chase & Co. | $60.00 |
$60.00 |
1 |
8 |
Rodman & Renshaw, LLC | $53.43 |
$10.69 |
5 |
9 |
Pritchard Capital Partners LLC | $48.00 |
$48.00 |
1 |
10 |
Leerink Swann & Company | $45.52 |
$45.52 |
1 |
11 |
GMP Securities Ltd. | $42.35 |
$14.12 |
3 |
12 |
Genuity Capital Markets | $40.51 |
$20.26 |
2 |
13 |
Roth Capital Partners, LLC | $37.01 |
$9.25 |
4 |
14 |
Dundee Securities Corporation | $33.90 |
$16.95 |
2 |
15 |
BMO Financial Group | $32.06 |
$32.06 |
1 |
15 |
Research Capital Corporation | $32.06 |
$32.06 |
1 |
15 |
TD Bank Financial Group | $32.06 |
$32.06 |
1 |
15 |
Thomas Weisel Partners LLC | $32.06 |
$32.06 |
1 |
19 |
RBC Capital Markets | $29.13 |
$29.13 |
1 |
20 |
Kaufman Bros., L.P. | $24.75 |
$24.75 |
1 |
21 |
Canaccord Capital Corp. | $24.35 |
$12.18 |
2 |
22 |
Apix International, Ltd. | $20.00 |
$20.00 |
1 |
23 |
Philadelphia Brokerage Corporation | $16.93 |
$5.64 |
3 |
24 |
Midtown Partners & Co., LLC | $13.00 |
$6.50 |
2 |
25 |
Euro Pacific Capital, Inc. | $11.16 |
$11.16 |
1 |
| 2009 Q1 Top 25 PIPE Investors |
||||
| (ranked by # of deals invested) | Invested $ (m) | Avg. $ (m) | Deals | |
1 |
Iroquois Capital L.P. | $2.70 * |
$0.90 * |
4 |
2 |
Vicis Capital, LLC | $18.00 |
$6.00 |
3 |
2 |
Bay City Capital | $11.00 |
$3.67 |
3 |
2 |
Downsview Capital, Inc. | $0.62 |
$0.21 |
3 |
5 |
Commonwealth Associates, L.P. | $30.00 |
$15.00 |
2 |
5 |
BAM Capital LLC | $25.67 |
$12.83 |
2 |
5 |
ProQuest Investments | $25.00 |
$12.50 |
2 |
5 |
Tisch Financial Management | $15.05 |
$7.52 |
2 |
5 |
International Finance Corporation | $14.13 |
$7.06 |
2 |
5 |
Wellington Management Company, LLP | $5.42 * |
$5.42 * |
2 |
5 |
Sanders Morris Harris Group Inc. | $5.27 |
$2.64 |
2 |
5 |
Special Situations Funds | $2.73 |
$1.36 |
2 |
13 |
Olotoa Investments, Inc. | $300.00 |
$300.00 |
1 |
13 |
Matlin Patterson Global Advisers LLC | $275.00 |
$275.00 |
1 |
13 |
Warburg Pincus LLC | $175.00 |
$175.00 |
1 |
13 |
Harbert Management Corp. | $150.00 |
$150.00 |
1 |
13 |
Grupo Financiero Inbursa | $125.00 |
$125.00 |
1 |
13 |
Inmobiliaria Carso S.A. de CV | $125.00 |
$125.00 |
1 |
13 |
CapGen Financial Group | $100.00 |
$100.00 |
1 |
13 |
Elevation Partners, L.P. | $100.00 |
$100.00 |
1 |
13 |
Asia Debt Management Hong Kong Limited | $80.00 |
$80.00 |
1 |
13 |
Lion Capital LLP | $80.00 |
$80.00 |
1 |
13 |
Deerfield Management Company, L.P. | $60.00 |
$60.00 |
1 |
13 |
Steelhead Partners, LLC | $50.00 |
$50.00 |
1 |
13 |
Third Security, LLC | $50.00 |
$50.00 |
1 |
| 2009 Q1 Top 25 PIPE Investors |
||||
| (ranked by $ invested) | Invested $ (m) | Avg. $ (m) | Deals | |
1 |
Olotoa Investments, Inc. | $300.00 |
$300.00 |
1 |
2 |
Matlin Patterson Global Advisers LLC | $275.00 |
$275.00 |
1 |
3 |
Warburg Pincus LLC | $175.00 |
$175.00 |
1 |
4 |
Harbert Management Corp. | $150.00 |
$150.00 |
1 |
5 |
Grupo Financiero Inbursa | $125.00 |
$125.00 |
1 |
5 |
Inmobiliaria Carso S.A. de CV | $125.00 |
$125.00 |
1 |
7 |
CapGen Financial Group | $100.00 |
$100.00 |
1 |
7 |
Elevation Partners, L.P. | $100.00 |
$100.00 |
1 |
9 |
Asia Debt Management Hong Kong Limited | $80.00 |
$80.00 |
1 |
9 |
Lion Capital LLP | $80.00 |
$80.00 |
1 |
11 |
Electrum Group of Companies | $69.68 |
$69.68 |
1 |
12 |
Deerfield Management Company, L.P. | $60.00 |
$60.00 |
1 |
13 |
Steelhead Partners, LLC | $50.00 |
$50.00 |
1 |
13 |
Third Security, LLC | $50.00 |
$50.00 |
1 |
15 |
Macquarie Bank Limited | $46.61 |
$46.61 |
1 |
16 |
Commonwealth Associates, L.P. | $30.00 |
$15.00 |
2 |
17 |
Oak Investment Partners | $29.13 |
$29.13 |
1 |
18 |
BAM Capital LLC | $25.67 |
$12.83 |
2 |
19 |
ProQuest Investments | $25.00 |
$12.50 |
2 |
19 |
Frazier & Company | $25.00 |
$25.00 |
1 |
21 |
FirstRand Limited | $23.39 |
$23.39 |
1 |
22 |
Domain Associates, L.L.C. | $20.00 |
$20.00 |
1 |
22 |
Frost Group, LLC | $20.00 |
$20.00 |
1 |
22 |
Israel Corporation Ltd. | $20.00 |
$20.00 |
1 |
22 |
Trustbridge Partners | $20.00 |
$20.00 |
1 |
| 2009 Q1 Top 25 PIPE Investor Law Firms |
||||
| (ranked by # of deals advised) | Advised $ (m) | Avg. $ (m) | Deals | |
1 |
Willkie Farr & Gallagher LLP | $416.50 |
$138.83 |
3 |
1 |
Simpson, Thacher & Bartlett | $280.00 |
$93.33 |
3 |
1 |
Bingham McCutchen LLP | $7.17 |
$2.39 |
3 |
4 |
Allens Arthur Robinson | $4,534.90 |
$2,267.45 |
2 |
4 |
Clifford Chance LLP | $4,534.90 |
$2,267.45 |
2 |
4 |
Mallesons Stephen Jaques | $4,534.90 |
$2,267.45 |
2 |
4 |
Baker Botts, L.L.P. | $430.00 |
$215.00 |
2 |
4 |
Weil, Gotshal & Manges LLP | $400.00 |
$200.00 |
2 |
4 |
Cleary, Gottlieb, Steen & Hamilton | $267.00 |
$133.50 |
2 |
4 |
Latham & Watkins LLP | $241.50 |
$120.75 |
2 |
4 |
Alston & Bird LLP | $112.50 |
$56.25 |
2 |
4 |
O'Melveny & Myers LLP | $88.60 |
$44.30 |
2 |
4 |
Greenberg Traurig, LLP | $53.00 |
$26.50 |
2 |
4 |
Troutman Sanders LLP | $52.00 |
$26.00 |
2 |
4 |
Chadbourne & Parke LLP | $40.00 |
$20.00 |
2 |
4 |
Akerman, Senterfitt & Eidson, P.A. | $30.00 |
$15.00 |
2 |
4 |
Schulte Roth & Zabel LLP | $15.52 |
$7.76 |
2 |
4 |
Quarles & Brady Streich Lang LLP | $8.00 |
$4.00 |
2 |
4 |
Lowenstein Sandler PC | $3.50 |
$1.75 |
2 |
4 |
Feldman Weinstein & Smith LLP | $3.30 |
$1.65 |
2 |
21 |
Balch & Bingham, LLP | $300.00 |
$300.00 |
1 |
21 |
Sullivan & Cromwell LLP | $275.00 |
$275.00 |
1 |
21 |
Sidley Austin LLP | $260.00 |
$260.00 |
1 |
21 |
K & L Gates | $100.00 |
$100.00 |
1 |
21 |
Katten Muchin Rosenman LLP | $60.00 |
$60.00 |
1 |
| 2009 Q1 Top 25 PIPE Issuer Law Firms |
||||
| (ranked by # of deals advised) | Advised $ (m) | Avg. $ (m) | Deals | |
1 |
Cooley Godward Kronish LLP | $143.49 |
$17.94 |
8 |
2 |
Morgan, Lewis & Bockius LLP | $288.93 |
$48.15 |
6 |
3 |
Skadden, Arps, Slate, Meagher & Flom LLP | $245.68 |
$61.42 |
4 |
3 |
Goodwin Procter LLP | $77.04 |
$19.26 |
4 |
3 |
Pepper Hamilton LLP | $53.32 |
$13.33 |
4 |
3 |
Sichenzia Ross Friedman Ference LLP | $32.07 |
$8.02 |
4 |
3 |
DLA Piper | $15.52 |
$3.88 |
4 |
8 |
Wilson Sonsini Goodrich & Rosati, PC | $207.50 |
$69.17 |
3 |
9 |
Linklaters LLP | $4,534.90 |
$2,267.45 |
2 |
9 |
Simpson, Thacher & Bartlett | $430.00 |
$215.00 |
2 |
9 |
Stikeman Elliott LLP | $295.60 |
$147.80 |
2 |
9 |
Kutak Rock LLP | $280.32 |
$140.16 |
2 |
9 |
Edwards Angell Palmer & Dodge LLP | $262.34 |
$131.17 |
2 |
9 |
Troutman Sanders LLP | $260.31 |
$130.15 |
2 |
9 |
Dewey & LeBoeuf LLP | $241.50 |
$120.75 |
2 |
9 |
Jones, Day, Reavis & Pogue | $112.50 |
$56.25 |
2 |
9 |
Latham & Watkins LLP | $88.60 |
$44.30 |
2 |
9 |
WilmerHale | $47.00 |
$23.50 |
2 |
9 |
Sheila Corvino, Esq. | $30.00 |
$15.00 |
2 |
9 |
Hogan & Hartson L.L.P. | $29.75 |
$14.88 |
2 |
9 |
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. | $25.47 |
$12.74 |
2 |
9 |
Baker & McKenzie LLP | $11.43 |
$5.72 |
2 |
9 |
Graubard Miller | $10.26 |
$5.13 |
2 |
9 |
Paul, Hastings, Janofsky & Walker LLP | $6.50 |
$3.25 |
2 |
9 |
Kelley Drye & Warren LLP | $4.00 |
$2.00 |
2 |
| 2009 Q1 Top 10 PIPE Placement Agent Law Firms |
||||
| (ranked by # of deals advised) | Advised $ (m) | Avg. $ (m) | Deals | |
1 |
Feldman Weinstein & Smith LLP |
$53.86 |
$10.77 |
5 |
2 |
Lowenstein Sandler PC |
$12.01 |
$3.00 |
3 |
3 |
Latham & Watkins LLP |
$51.57 |
$25.79 |
2 |
3 |
Goodwin Procter LLP |
$14.07 |
$7.04 |
2 |
5 |
Wilmer Cutler Pickering Hale and Dorr LLP |
$45.52 |
$45.52 |
1 |
5 |
Stradling Yocca Carlson & Rauth |
$24.75 |
$24.75 |
1 |
5 |
Proskauer Rose LLP |
$24.30 |
$24.30 |
1 |
5 |
Duane Morris LLP |
$7.00 |
$7.00 |
1 |
5 |
Littman Krooks LLP |
$3.50 |
$3.50 |
1 |
5 |
Wilson Sonsini Goodrich & Rosati, P.C. |
$2.00 |
$2.00 |
1 |
| 2009 Q1 Top 25 PIPE Accountants |
||||
| (ranked by # of PIPE Issuers represented) | Raised $ (m) |
Avg. MCap (m) |
Issuers |
|
1 |
Ernst & Young LLP | $956.36 |
$204.76 |
21 |
2 |
KPMG LLP | $1,159.87 |
$158.81 |
16 |
3 |
Deloitte & Touche LLP | $734.93 |
$326.86 |
12 |
3 |
Pricewaterhousecoopers LLP | $5,393.11 |
$3,129.02 |
11 |
5 |
Marcum & Kliegman LLP | $89.09 |
$36.45 |
5 |
6 |
UHY LLP | $12.70 |
$31.34 |
4 |
7 |
Grant Thornton LLP | $68.08 |
$141.91 |
3 |
7 |
BDO Seidman, LLP | $273.30 |
$170.60 |
3 |
8 |
Amper, Politziner & Mattia, P.C. | $12.84 |
$9.67 |
2 |
8 |
BDO Dunwoody LLP | $46.35 |
$86.01 |
2 |
8 |
HEIN & ASSOCIATES LLP | $17.50 |
$111.34 |
2 |
8 |
Sherb & Co., LLP | $7.00 |
$10.06 |
2 |
8 |
Jewett, Schwartz, Wolfe & Associates | $4.38 |
$26.74 |
2 |
8 |
McGladrey & Pullen, LLP | $4.02 |
$16.57 |
2 |
15 |
Virchow, Krause & Company, LLP | $280.32 |
$57.70 |
1 |
15 |
Johnson Miller & Co., CPA’s PC | $43.63 |
$285.97 |
1 |
15 |
De Visser Gray LLP | $32.06 |
$212.61 |
1 |
15 |
Drakeford & Drakeford, LLC | $30.00 |
$5.48 |
1 |
15 |
Dixon Hughes PLLC | $27.25 |
$14.85 |
1 |
15 |
BKD, LLP | $22.64 |
$121.75 |
1 |
15 |
PMB Helin Donovan | $20.00 |
$143.67 |
1 |
15 |
Weinberg & Company, P.A. | $15.00 |
$18.27 |
1 |
15 |
Moss-Adams LLP | $10.13 |
$177.67 |
1 |
15 |
KBL, LLP | $10.00 |
$8.71 |
1 |
15 |
Payne Smith & Jones, P.C. | $10.00 |
$35.49 |
1 |
(1) |
All Rankings for 1/1/09 - 3/31/09 (PrivateRaise.com data as of 4/9/09) |
(2) |
PIPE Placement Agent Rankings, for co-agented transactions each Agent is allocated 100% of Issuance Amount |
(3) |
PIPE Investor Rankings, exclude Corporate Entities (e.g., Microsoft) |
(4) |
PIPE Investor Rankings, (*) Excludes transactions where Investment Amount is Unknown |
(5) |
All Rankings exclude Equity Line transactions |
(6) |
All Rankings exclude PIPE transactions executed by Foreign-Based Issuers that trade on the Over-the-Counter market (Pink Sheets) |
About DealFlow Media
DealFlow Media was founded in 2003 with the launch of The PIPEs Report, the premier research publication for the equity private placement market. Since its inception, DealFlow Media has distinguished itself as a provider of independent research and analysis of alternative asset markets. The company publishes six alternative investment reports and weekly news wires as well as hosting conferences and webinars throughout the year.
About PrivateRaise
PrivateRaise is the leading source for data and analysis of private investments in public equity (PIPEs), Reverse Mergers, and Special Purpose Acquisition Companies (SPACs). This award-winning service simplifies researching these investment structures and the entities associated with these transactions. PrivateRaise also offers the only comprehensive database of alternative public offerings and directory of market participants.
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Contact:
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