Insurance broker Brown & Brown Inc. will pay $395 million in cash to buy Arrowhead General Insurance Agency Inc., a company owned by Spectrum Equity Investors and JMI Equity, Reuters reported. The purchase price is subject to adjustments based on Arrowhead’s working capital, debt and net tax operating losses, Reuters wrote.

BMG Rights Management will pay about $300 million to buy Los Angeles song publisher Bug Music, beating out bidders including American Idol creator Simon Fuller, Reuters reported. Bug Music owns the rights to songs including “What a Wonderful World” and “Under The Boardwalk.” The company is currently owned by Spectrum Equity Investors. BMG Rights is a joint venture of giant German media company Bertelsmann and private equity firm KKR.

Online video creation service Animoto.com has sealed $25 million in financing led by Spectrum Equity Investors, with participation from existing Animoto investors Madrona Venture Group and Amazon.com. The money will help Animoto expand its video creation services. As a result of the round, Ben Spero, a managing director for Spectrum Equity, will join the Animoto [...]

Private equity shop Spectrum Equity Investors has paid $50 million for a minority stake in SeamlessWeb, a site that allows consumers to order restaurant delivery over the Internet. The firm is buying the stake from ARAMARK Corp. The company will use the infusion to help with expansion and possible acquisitions, the company announced in a press release Wednesday. Kirkland & Ellis LLP served as legal advisor to Spectrum.

The Department of Justice has approved Google Inc.’s acquisition of flight information software company ITA Software Inc. In July 2010, Google said it would pay $700 million in cash for Cambridge, Mass.-based ITA. ITA’s investors include Battery Ventures, General Catalyst Partners, PAR Investment Partners, Sequoia Capital and Spectrum Equity Investors.

Every month I compile a list of the top 10 largest tech, health care and cleantech deals for the prior month for Venture Capital Journal. VCJ subscribers can click on the following links for our top 10 lists.

Top 10 Tech Deals

Top 10 Cleantech Deals

Top 10 Health Care Deals

For peHUB members, here’s a taste from each of the categories, based on preliminary data gathered by Thomson Reuters (publisher of peHUB).

Two executives of Canopy Financial have left the company in the wake of accusations of financial fraud, a Canopy spokesman confirmed today.

President and chief operating officer Jeremy Blackburn has resigned, and chief technology officer Tony Banas has been placed on administrative leave. So far, peHUB has been unable to reach either one of them for comment.

CEO Vikram Kashyap released a statement yesterday through his attorney, saying that he had “no prior knowledge whatsoever of any fraud regarding Canopy’s financial statements” and that he “relied on financial and legal professionals in accepting the authenticity of the company’s financials.” Although Kashyap has stepped down as CEO of Canopy, he said he will remain as chairman to help hold any fraudsters accountable.

The spokesman also said that Canopy has informed its customers and investors of the fraud allegations and continues

Eight years ago, Vikram Kashyap left his job as an associate with Battery Ventures, in order to get the type of operating experience he felt was required to become a “world class” investor. After stops at eMeta and American Express, Kashyap launched Canopy Financial, a company whose technology helps streamline the administration of Health Savings Accounts. Canopy raised over $88 million in VC funding, including $62.5 million this past summer from Spectrum Equity Investors and return backer Foundation Capital.

Today, Kashyap is unemployed and Canopy executives are likely to face both criminal and civil accusations of fraud (although no charges have yet been filed).

As first reported this morning by TechCrunch, Canopy Financial appears to have largely been a facade. Its technology is real, but many of its tax statements, customer records and financial results were bogus. Sources tell peHUB that the company laid off approximately 100 of its 120 employees last Thursday, after an investor audit showed signs of severe impropriety.

“The entire company thought everything was going great until two or three weeks ago,” says a former employee who asked not to be identified. “Once that [audit] happened things moved very fast. The last week in our office was like going to a funeral.”

As usual, we have a week’s worth of ratings actions on the debt of PE-backed companies from ratings agencies Moody’s and Standard & Poor’s. This week was pretty boring (Perhaps Moody’s was too busy preparing its Mega-buyout report?).

There were just three ratings actions, one of which is a withdrawal on an already-bankrupt company. That company is Accuride, a company which Sun Capital took a stake in through its Sun Capital Securities hedge fund earlier this year. The company underwent a debt-for-equity swap as Sun Capital Securities transitioned out of its debt investment strategy to actively managed equity investments.

Company: Rafaella Apparel
Sponsor: Cerberus Capital Management LP
Downgrade: Moody’s downgraded the company’s corporate family and probability of default ratings to Caa3 from Caa1, and the rating on its 11.25% second lien notes to Ca from Caa2.
Highlights: “Rafaella’s liquidity is weak given its significant longer term debt maturities. However, balance sheet cash along with the expectation for modest free cash flow and revolver availability appear sufficient to cover cash needs over the next year.”

NEW YORK (Reuters) – Spectrum Equity Investors-backed website Ancestry.com Inc (ACOM.O) priced its initial public offering of 7.4 million shares at $13.50 per share on Wednesday, within the expected range. Ancestry.com, which operates a website that allows people to trace their family roots by scouring online records, will begin trading on Nasdaq under the symbol [...]