SPI Plans Stock Offer to Raise Growth Capital : Acquisitions Figure in Company’s Plans
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In a bid to raise $2.4 million for acquisitions and working capital, SPI Pharmaceuticals Inc. said Friday it plans to sell 300,000 shares of common stock.
As part of the same transaction, two of the company’s larger shareholders plan to sell off 426,666 of their shares.
The issuance of new shares by SPI would decrease slightly the holdings of the parent company, ICN Pharmaceuticals Inc., from 88% to about 85%.
Continued growth through acquisitions is a key objective of the Costa Mesa-based drug manufacturer and distributor, the company said. Although the company spent nearly $19 million in acquiring three companies in 1984, “we are still in a growth mode,” said Paul Maier, vice president of finance. But he noted that SPI is not now in “active” negotiations for an acquisition.
Revlon Selling Stock
The two selling shareholders are Revlon Inc. of New York and R.G.M.B. Corporate Profit Sharing Plan of Beverly Hills, Maier said.
Revlon is selling 266,666 shares, which it acquired in November, 1984, when SPI purchased a Revlon pharmaceutical subsidiary in Mexico City, Laboratorious Grossman, S.A., for $12.2 million in cash and stock. At the time, the SPI stock price was about $5 per share, and the company guaranteed Revlon a minimum resale value of $7.50 per share on the stock, Maier said. The stock was selling Tuesday for $10.50.
Among its other acquisitions last year, SPI purchased Elder Pharmaceuticals of Bryan, Ohio, for $4 million, and Legere Pharmaceuticals of Scottsdale, Ariz. for $2.7 million in Sept.
Income Nearly Triples
Last month, SPI reported record second-quarter earnings, nearly tripling its net income to $1.35 million, from $493,000 in the year earlier period.
For the six months, net income jumped 116% to $2.07 million from $958,000 during the first half of 1984.
Maier declined to project the company’s third-quarter earnings.
The stock offering was managed by Prudential-Bache Securities Inc. and Rauscher Pierce Refsnes Inc.
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