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PIPE Market Activity Returns to Historical Levels in the Third Quarter: PrivateRaise and DealFlow Media Announce Q3 Transaction Data and League Tables

October 14, 2009 10:30 am EST   |  view website  | 

NEW YORK -- Deal activity in the PIPE market returned to historical levels in the third quarter, albeit at lower levels of capital investment, according to PrivateRaise, DealFlow Media's database service (www.dealflow.com/privateraise).

U.S.-listed public companies raised $7.91 billion in 290 PIPE deals in the third quarter, a 27% increase over the second quarter in deals, but a 24% decrease in capital raised over the second quarter. The average amount of capital raised per deal fell by 40%, to $27.3 million. Overall, the third quarter's activity was squarely within the historical range of the PIPE market during the past five years.

While the rebound in PIPE transactions in the third quarter was significant, comparisons to the same period a year ago show that issuance remains off recent levels. Deal activity declined 10% from the third quarter of 2008, and total investment plunged 65% from a year ago, when multi-billion dollar "mega-PIPEs" issued by distressed financial institutions dominated the market. Looking at the first three quarters of 2009, PIPE issuance fell 26% to 690 deals, raising $25.8 billion in capital, a 69% decline in total investment from the first three quarters of 2008.

PIPE issuing companies continued to use registered shelf offerings, or "registered directs," to raise capital in lieu of more traditional unregistered common stock placements. Issuers closed 70 registered direct offerings, raising $1.14 billion, compared to 54 deals that raised $951.6 million in the second quarter. Year-over-year comparisons of registered direct issuance showed a 119% increase in completed deals and a modest 14% increase in total capital raised, reflecting the impact of recent shelf registration rule changes which allow smaller companies to participate in shelf offerings.

Looking forward, the trend toward increased issuance of registered directs, which unlike traditional PIPE securities are registered and publicly tradable immediately upon issue, continues to build steam. According to PrivateRaise's Shelf Screener, more than 100 companies with market caps of $100 million to $500 million filed shelf registration statements in the third quarter, to potentially raise $19.2 billion. So far this year, more than $118.5 billion in shelf registrations have been filed by 728 public companies of all sizes.

"The trend toward registered direct offerings as the private placement structure of choice for eligible issuers appears likely to sustain the current momentum for the foreseeable future," said J.B. Summitt, Director of Research at PrivateRaise.

Equally compelling as the strong growth in the registered direct market is the return to normalcy seen in the critical microcap segment of the traditional unregistered PIPE market, said Brett Goetschius, Editor and Publisher of DealFlow Media's The PIPEs Report.

"Microcap issuers raised nearly $3 billion in 242 deals in the third quarter, at an average $12.4 million per deal. This represents a nearly complete return to issuance levels of a year ago, before the full brunt of the economic crisis hit the market and brought issuance activity to its lowest level in seven years. For all intents and purposes, the traditional PIPE market is back," said Goetschius.

Healthcare was the most active industry in the third quarter with 100 deals for $1.7 billion raised. According to PrivateRaise's PIPEscreener analysis, there are 267 U.S.-listed healthcare companies that have less than $10 million of cash on the balance sheet and will burn through that cash in less than one year, indicating that the trend for healthcare companies raising money via PIPEs will likely continue.

Overall, the demand for capital remains strong. There are 3,693 U.S.-listed companies with negative cash flow identified by PIPEscreener that have less than four quarters of cash remaining on their balance sheets. Of those, 928 have closed at least one PIPE since 2007.

Complete data and analysis of second quarter PIPE market activity, along with league tables of active investors, bankers and attorneys, is available at http://www.privateraise.com/press/2009-10-14.php.

2009 Q1-Q3 PRIVATERAISE LEAGUE TABLES

 

2009 Q1-Q3 Top 25 PIPE Issuers

(ranked by $ raised)

Raised $ (m)

Avg. $ (m)

Deals

 

 

 

 

 

1
Dow Chemical Company 
$4,000.00
$4,000.00
1
2
Daimler AG 
$2,519.15
$2,519.15
1
3
ArcelorMittal 
$1,695.83
$1,695.83
1
4
Teck Resources Ltd. 
$1,500.00
$1,500.00
1
5
BlackRock, Inc. 
$800.00
$400.00
2
6
Prudential Financial, Inc. 
$500.00
$500.00
1
7
Crucell NV 
$443.79
$443.79
1
8
Sirius XM Radio Inc. 
$430.00
$215.00
2
9
SkyTerra Communications, Inc. 
$400.00
$400.00
1
10
Office Depot, Inc. 
$350.00
$175.00
2
11
Lihir Gold Limited 
$324.45
$324.45
1
12
Eastman Kodak Company 
$300.00
$300.00
1
13
Flagstar Bancorp, Inc. 
$280.32
$140.16
2
14
Maiden Holdings, Ltd. 
$260.00
$260.00
1
15
NCI Building Systems, Inc. 
$250.00
$250.00
1
15
New York Times Company
$250.00
$250.00
1
17
Central European Media Enterprises Ltd. 
$241.50
$120.75
2
18
Precision Drilling Trust 
$230.53
$115.26
2
19
Hertz Global Holdings, Inc. 
$200.00
$200.00
1
19
Seaspan Corporation 
$200.00
$200.00
1
21
SINA Corp 
$180.00
$180.00
1
22
Great Atlantic & Pacific Tea Company, Inc.
$175.00
$175.00
1
22
Nuance Communications, Inc. 
$175.00
$175.00
1
24
Quiksilver, Inc. 
$152.98
$76.49
2
25
Regal-Beloit Corporation
$156.33
$156.33
1

 

2009 Q1-Q3 Top 25 PIPE Placement Agents

(ranked by # of deals placed)

Placed $ (m)

Avg. $ (m)

Deals

 

 

 

 

 

1
Rodman & Renshaw, LLC 
$820.46
$16.09
51
2
Roth Capital Partners, LLC 
$486.01
$23.14
21
3
Midtown Partners & Co., LLC 
$69.64
$4.64
15
4
Lazard
$424.24
$32.63
13
5
Canaccord Capital Corp.
$346.33
$28.86
12
6
Piper Jaffray & Co. 
$418.33
$38.03
11
7
Merriman Curhan Ford & Co. 
$160.83
$17.87
9
8
Oppenheimer & Co. Inc. 
$211.13
$26.39
8
8
Chardan Capital Markets, LLC 
$34.73
$4.34
8
10
Thomas Weisel Partners LLC
$90.33
$12.90
7
11
Needham & Company, Inc. 
$146.63
$24.44
6
11
Cowen and Company, LLC
$88.44
$14.74
6
11
Dundee Securities Corporation 
$61.82
$10.30
6
11
Garden State Securities, Inc. 
$20.42
$3.40
6
15
Leerink Swann & Company 
$262.34
$52.47
5
16
GMP Securities Ltd. 
$53.56
$13.39
4
16
Ladenburg Thalmann & Co., Inc. 
$44.95
$11.24
4
16
Toll Cross Securities Inc. 
$36.29
$9.07
4
16
Maxim Group, LLC 
$17.97
$4.49
4
20
Robert W. Baird & Co.
$247.89
$82.63
3
20
RBC Capital Markets 
$145.98
$48.66
3
20
JMP Group, Inc.
$125.73
$41.91
3
20
Wunderlich Securities, Inc. 
$118.81
$39.60
3
20
Deutsche Bank AG 
$68.83
$22.94
3
20
Wedbush Morgan Securities, Inc.
$35.30
$11.77
3

 

2009 Q1-Q3 Top 25 PIPE Placement Agents

(ranked by $ placed)

Placed $ (m)

Avg. $ (m)

Deals

 

 

 

 

 

1
Calyon Securities USA, Inc.
$1,721.31
$860.66
2
2
Societe Generale Group 
$1,695.83
$1,695.83
1
3
Rodman & Renshaw, LLC 
$820.46
$16.09
51
4
Roth Capital Partners, LLC 
$486.01
$23.14
21
5
Lazard
$424.24
$32.63
13
6
Piper Jaffray & Co. 
$418.33
$38.03
11
7
Goldman, Sachs & Co.
$379.08
$189.54
2
8
Macquarie Capital Advisors
$356.51
$178.25
2
9
Canaccord Capital Corp.
$346.33
$28.86
12
10
Leerink Swann & Company 
$262.34
$52.47
5
11
FBR Capital Markets & Co., Inc. 
$260.00
$260.00
1
12
SunTrust Robinson Humphrey 
$250.00
$250.00
1
13
Robert W. Baird & Co.
$247.89
$82.63
3
14
Oppenheimer & Co. Inc. 
$211.13
$26.39
8
15
Merriman Curhan Ford & Co. 
$160.83
$17.87
9
16
Needham & Company, Inc. 
$146.63
$24.44
6
17
RBC Capital Markets 
$145.98
$48.66
3
18
Pritchard Capital Partners LLC 
$135.40
$67.70
2
19
JMP Group, Inc.
$125.73
$41.91
3
20
Wunderlich Securities, Inc. 
$118.81
$39.60
3
21
ThinkEquity, LLC 
$101.25
$50.63
2
22
Imperial Capital LLC 
$100.35
$50.18
2
23
Bank of America Corporation
$100.00
$100.00
1
23
Credit Suisse Group 
$100.00
$100.00
1
25
BMO Financial Group
$99.05
$33.02
3

 

2009 Q1-Q3 Top 25 PIPE Investors

(ranked by # of deals invested)

Invested $ (m)

 

Avg. $ (m)

 

Deals

 

 

 

 

 

 

 

1
Downsview Capital, Inc. 
$64.32
*
$2.92
*
23
1
Iroquois Capital L.P. 
$58.86
*
$2.94
*
23
3
BAM Capital LLC 
$85.88
*
$5.37
*
17
4
Hudson Bay Capital Management LP 
$54.71
 
$4.21
 
13
5
Vicis Capital, LLC 
$37.25
*
$4.14
*
10
6
Heights Capital Management, Inc. 
$68.45
 
$7.61
 
9
6
Rockmore Capital 
$6.70
*
$0.84
*
9
8
Wellington Management Company, LLP 
$110.18
*
$18.36
*
7
9
Tisch Financial Management 
$24.99
*
$5.00
*
6
9
Special Situations Funds 
$12.95
 
$2.16
 
6
9
LH Financial Services Corp.
$1.60
*
$0.40
*
6
9
Gemini Strategies, LLC
$0.40
*
$0.20
*
6
13
Frost Group, LLC
$60.49
*
$15.12
*
5
13
UBS AG
$25.62
 
$5.12
 
5
13
Ramius Capital Group, LLC 
$18.59
 
$3.72
 
5
16
Deerfield Management Company, L.P. 
$170.32
 
$42.58
 
4
16
International Finance Corporation 
$71.72
 
$17.93
 
4
16
Commonwealth Associates, L.P. 
$38.00
 
$9.50
 
4
16
Bay City Capital 
$19.30
 
$4.82
 
4
16
New Enterprise Associates 
$15.55
 
$3.89
 
4
16
T. Rowe Price Group, Inc. 
$11.07
 
$2.77
 
4
16
Federated Equity Funds 
$10.00
*
$10.00
*
4
16
Atoll Asset Management, LLC
$5.30
 
$1.33
 
4
16
Vision Capital Advisors, LLC 
$5.19
*
$1.73
*
4
16
Empery Asset Management, LP 
$3.50
*
$1.75
*
4

 

2009 Q1-Q3 Top 25 PIPE Investors

(ranked by $ invested)

Invested $ (m)

 

Avg. $ (m)

 

Deals

 

 

 

 

 

 

 

1
Berkshire Hathaway Inc. 
$3,000.00
 
$3,000.00
 
1
2
Aabar Investments PJSC 
$2,519.15
 
$2,519.15
 
1
3
China Investment Corporation Ltd. 
$1,500.00
 
$1,500.00
 
1
4
Kuwait Investment Authority 
$1,000.00
 
$1,000.00
 
1
5
Nippon Life Insurance Company 
$500.00
 
$500.00
 
1
5
PNC Financial Services Group 
$500.00
 
$500.00
 
1
7
BC Partners, Inc. 
$425.00
 
$212.50
 
2
8
Clayton, Dubilier & Rice, Inc. 
$375.00
 
$187.50
 
2
9
Harbert Management Corp. 
$325.00
 
$325.00
 
1
10
Kohlberg Kravis Roberts & Co. 
$300.00
 
$300.00
 
1
11
Matlin Patterson Global Advisers LLC 
$275.00
 
$275.00
 
1
12
Warburg Pincus LLC 
$259.82
 
$86.61
 
3
13
Alberta Investment Management 
$230.53
 
$115.26
 
2
14
Deerfield Management Company, L.P. 
$170.32
 
$42.58
 
4
15
Deep Water Holdings, LLC 
$160.00
 
$160.00
 
1
16
Rhone Group LLC 
$152.98
 
$76.49
 
2
17
EPCO Holdings, Inc. 
$150.00
 
$150.00
 
1
18
Grupo Financiero Inbursa 
$125.00
 
$125.00
 
1
18
Inmobiliaria Carso S.A. de CV 
$125.00
 
$125.00
 
1
20
Yucaipa Companies, LLC
$115.00
 
$115.00
 
1
21
Wellington Management Company, LLP 
$110.18
*
$18.36
*
7
22
CapGen Financial Group 
$100.00
 
$100.00
 
1
22
Elevation Partners, L.P. 
$100.00
 
$100.00
 
1
22
Paulson & Co., Inc. 
$100.00
 
$100.00
 
1
25
Annaly Capital Management, Inc.
$90.08
 
$45.04
 
2

 

2009 Q1-Q3 Top 25 PIPE Investor Law Firms

(ranked by # of deals advised)

Advised $ (m)

Avg. $ (m)

Deals

 

 

 

 

 

1
Schulte Roth & Zabel LLP 
$444.60
$19.33
23
2
Greenberg Traurig, LLP 
$331.76
$15.80
21
3
Latham & Watkins LLP 
$1,392.55
$116.05
12
4
Simpson, Thacher & Bartlett LLP 
$430.00
$61.43
7
4
Weinstein & Smith, LLP
$16.60
$2.37
7
6
Sullivan & Cromwell LLP 
$512.80
$102.56
5
6
O'Melveny & Myers LLP 
$131.60
$26.32
5
8
Seward & Kissel LLP 
$121.98
$30.49
4
8
Goodwin Procter LLP 
$75.00
$18.75
4
8
Ellenoff Grossman and Schole LLP 
$27.00
$6.75
4
8
Cooley Godward Kronish LLP 
$22.01
$5.50
4
8
Bingham McCutchen LLP 
$8.62
$2.16
4
8
Grushko & Mittman, P.C. 
$5.78
$1.45
4
14
Willkie Farr & Gallagher LLP 
$416.50
$138.83
3
14
Cleary, Gottlieb, Steen & Hamilton 
$278.00
$92.67
3
14
Katten Muchin Rosenman LLP 
$165.00
$55.00
3
14
Troutman Sanders LLP 
$53.00
$17.67
3
14
Chadbourne & Parke LLP 
$43.50
$14.50
3
14
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo
$24.99
$8.33
3
14
Ropes & Gray LLP 
$22.80
$7.60
3
14
Wilson Sonsini Goodrich & Rosati, PC 
$18.00
$6.00
3
14
Quarles & Brady Streich Lang LLP 
$12.50
$4.17
3
23
Debevoise & Plimpton LLP 
$450.00
$225.00
2
23
Baker Botts, L.L.P. 
$430.00
$215.00
2
23
Skadden, Arps, Slate, Meagher & Flom LLP 
$113.00
$56.50
2

 

2009 Q1-Q3 Top 25 PIPE Issuer Law Firms

(ranked by # of deals advised)

Advised $ (m)

Avg. $ (m)

Deals

 

 

 

 

 

1
Sichenzia Ross Friedman Ference LLP 
$116.50
$4.31
27
2
Cooley Godward Kronish LLP 
$489.00
$21.26
23
3
Morgan, Lewis & Bockius LLP 
$353.32
$25.24
14
4
K & L Gates
$289.76
$22.29
13
5
Wilson Sonsini Goodrich & Rosati, PC 
$670.16
$55.85
12
5
Latham & Watkins LLP 
$371.83
$30.99
12
7
DLA Piper 
$162.51
$14.77
11
7
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo
$155.02
$14.09
11
9
Skadden, Arps, Slate, Meagher & Flom LLP 
$1,228.24
$122.82
10
9
Stradling Yocca Carlson & Rauth 
$183.66
$18.37
10
11
Morrison & Foerster LLP 
$91.64
$10.18
9
12
O'Melveny & Myers LLP 
$270.29
$33.79
8
12
Hogan & Hartson L.L.P. 
$145.77
$18.22
8
12
Pillsbury Winthrop Shaw Pittman LLP 
$115.93
$14.49
8
12
Goodwin Procter LLP 
$109.26
$13.66
8
16
Edwards Angell Palmer & Dodge LLP 
$308.97
$44.14
7
16
WilmerHale
$206.21
$29.46
7
16
Greenberg Traurig, LLP 
$103.21
$14.74
7
19
Wachtell, Lipton, Rosen & Katz 
$684.82
$136.96
5
19
Simpson, Thacher & Bartlett LLP 
$600.00
$120.00
5
19
Seyfarth Shaw LLP 
$152.06
$30.41
5
19
Ropes & Gray LLP 
$53.35
$10.67
5
19
Cozen O'Connor 
$7.73
$1.55
5
24
Shearman & Sterling LLP
$4,160.08
$1,040.02
4
24
Sullivan & Cromwell LLP
$215.83
$53.96
4

 

2009 Q1-Q3 Top 15 PIPE Placement Agent Law Firms

(ranked by # of deals advised)

Advised $ (m)

Avg. $ (m)

Deals

 

 

 

 

 

1
Weinstein & Smith LLP
$445.80
$13.11
34
2
Proskauer Rose LLP
$316.15
$19.76
16
2
Feldman Weinstein & Smith LLP
$176.59
$11.04
16
4
Goodwin Procter LLP
$316.81
$22.63
14
5
DLA Piper LLP
$356.88
$50.98
7
5
Lowenstein Sandler PC
$44.96
$6.42
7
7
Latham & Watkins LLP
$204.18
$34.03
6
7
K&L Gates
$57.19
$9.53
6
9
Choate, Hall & Stewart LLP
$94.13
$18.83
5
10
Sichenzia Ross Freidman Ference LLP 
$59.99
$15.00
4
11
Ropes & Gray LLP
$112.18
$37.39
3
12
Stradling Yocca Carlson & Rauth
$38.25
$19.13
2
12
Morrison & Foerster LLP
$26.00
$13.00
2
12
Fraser Milner Casgrain LLP
$11.52
$5.76
2
12
Ellenoff Grossman & Schole LLP
$5.65
$2.83
2

 

2009 Q1-Q3 Top 25 PIPE Accountants

(ranked by # of PIPE Issuers represented)

Raised $ (m)
Avg. MCap (m)
Issuers

 

 

 

 

1
Ernst & Young LLP
$2,018.87
$188.25
64
2
KPMG LLP
$4,830.42
$968.51
46
3
PricewaterhouseCoopers LLP
$4,421.72
$1,201.26
44
4
Deloitte & Touche LLP
$11,269.74
$2,010.63
41
5
BDO Seidman, LLP
$557.79
$153.63
18
6
Grant Thornton LLP 
$283.87
$150.22
14
7
Sherb & Co., LLP 
$37.29
$35.62
9
8
Crowe Horwath LLP
$155.28
$87.43
8
8
UHY LLP
$168.15
$47.30
8
10
Amper, Politziner & Mattia, P.C.
$63.19
$22.33
7
10
Marcum LLP
$106.14
$36.72
7
10
McGladrey & Pullen, LLP
$120.82
$98.73
7
13
Hein & Associates LLP
$59.03
$84.83
6
14
Cherry, Bekaert & Holland, L.L.P.
$48.42
$136.67
5
14
Jewett, Schwartz, Wolfe & Associates
$49.38
$29.47
5
14
Moore Stephens Wurth Frazer and Torbet
$28.67
$75.29
5
15
BDO Dunwoody LLP
$49.14
$54.98
4
15
Burr, Pilger and Mayer LLP
$16.93
$26.89
4
15
Caturano and Company
$17.61
$38.52
4
15
Davidson & Company LLP
$26.59
$39.73
4
15
Kabani & Company, Inc.
$14.12
$35.23
4
15
Perry-Smith LLP
$22.99
$45.65
4
15
PKF International
$22.99
$52.25
4
15
PMB Helin Donovan LLP 
$27.54
$124.78
4
15
SingerLewak LLP
$10.03
$8.98
4

 

(1)

All Rankings for 1/1/09 - 9/30/09 (PrivateRaise.com data as of 10/9/09)

(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 five alternative investment reports and seven 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.

PrivateRaise information services can be accessed at www.dealflowmedia.com/privateraise.

Contact:
PrivateRaise, a service of DealFlow Media
Phil Kerewich
T: 516-876-8006
F: 516-876-8010
E: pkerewich@privateraise.com