PE Week Wire — Friday 3/16


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Acoustic Technologies Inc., a Mesa, Ariz.-based communications software provider, has raised $13.8 million in third round venture funding. Signature Capital led the oversubscribed deal.

Cadent Holdings Inc., a New York-based provider of dental and orthodontic technologies, has raised $5.3 million in Series D funding. Investors included JPMorgan Partners, Apax Partners, Schroder Ventures Life Sciences and Pitango Venture Capital. The company has now raised $30 million since its 1994 founding. In related news, Cadent has named Douglas Stickney as its new chairman and CEO. Stickney was a co-founder of Quantum Health Resources Inc., which went public and was eventually sold to Olsten Health Services.

Hispania Capital Partners has launched a $70 million private equity fund focused on Hispanic-owned businesses and those providing goods and services to the Hispanic market. The Chicago-based fund has received SBIC backing, and is run by firm co-founders Victor Maruri and Carlos Signoret.

Evergreen Solar Inc. (Nasdaq: ESLR), a Malborough, Mass.-based maker of solar power products, has completed a previously announced private placement of Series A convertible preferred stock. Buyers of the $29.475 million PIPE offering included Beacon Power Corp., CDP Capital-Technology Ventures, Perseus, RockPort Capital Partners and Nth Power.

H.I.G. Capital and HALO Industries Inc., a Northbrook, Ill.-based provider of promotional products, have completed a $22 million deal whereby a newly formed affiliate of H.I.G. Capital will acquire the U.S. and European operations of HALO, including Lee Wayne Corp., HALO Branding Solutions and HALO Europe.

The European Commission has approved a $317 million buyout of gym chain Fitness First PLC by UK private equity firm Cinven.

Allegiance Telecom Inc. (Nasdaq: ALGX), a Dallas-based phone company, declared bankruptcy earlier this week. The company is currently weighing its reorganization options, which include conversations with private equity firms.

The State Loan and Investment Board of Wyoming has approved a plan that would invest $125 million of permanent mineral trust fund money into the private equity market.

Edward Sopher has joined the law firm of Gibson Dunn & Crutcher to focus on private equity. He was previously with Akin Gump Strauss Hauer & Feld.

Vivendi Universal has agreed to sell its Hungarian fixed-line telephone unit for €325 million ($373 million) to AIG AIG Emerging Europe Infrastructure Fund and GMT Communications Partners.

PrivateEquityCentral.net is reporting that New York-based Charterhouse Group International has held a first close of around $300 million on its fourth private equity fund. The vehicle was originally launched last November, and is capped at $1 billion.
NEWS FROM THURSDAY 5/15
VhaYu Technologies Inc., a Los Gatos, Calif.-based provider of real-time data capture, storage and analytics for the financial industry, has raised $6.5 million in Series B funding. Menlo Ventures led the deal.

RLX Technologies Inc., a Woodlands, Texas-based provider of scale-out blade server and management solutions, has raised $23 million in Series C funding. Austin Ventures led the deal, and was joined by return backers Soros Private Equity Investors, Sternhill Partners, Ignition Partners, ComVentures, Cracken, Harkey & Co. and Cockrell Investment Partners.

National Financial Partners Inc., a New York-based financial services provider, has filed for a $250 million IPO on the New York Stock Exchange. Apollo Management owns around 45% of the company thanks to a $125 million investment that closed at the beginning of 1999.

iPayment Inc. (Nasdaq: IPMT), a Nashville, Tenn.-based payment processing company, earlier this week priced an $80 million IPO. The company had raised around $17 million in private equity funding, with shareholders including First Avenue Partners, Summit Partners and Harbinger Mezzanine Partners.

Intalio Inc., a San Mateo, Calif.-based provider of business process management systems, has raised $5 million in new venture funding from return backers Woodside Fund, 3i, XML Fund, SAP Ventures and Sippl MacDonald Ventures. The company has now raised around $33 million since its 1999 founding, including a $6 million round last summer at a post-money valuation of around $20 million.

IBM Corp. has acquired Toronto-based systems management software developer Think Dynamics Inc. Terms of the deal were not disclosed, but Canadian press reports put the figure at around US$50 million – even though the company has less than $1 million in annual sales. Think Dynamics has raised $7 million in venture capital since its late 2000 founding, from investors like Brightspark Ventures, CDP Capital and the Ontario Municipal Employees’ Retirement System.

Energy & Engine Technology Corp. (OTC BB: EENT), a Plano, Texas-based provider of power generation for vehicles, has received $3.5 million in private equity funding from Cornell Capital Partners.

Advent International is planning to argue before a Bulgarian court that its Viva Ventures subsidiary was illegally blocked from buying a 65% stake in telecom operator Bulgarian Telecommunications Co. The rejection decision had been made by the Bulgarian Privatization Agency.

Trivest Partners, has recapitalized Regional Diagnostics, a Cleveland-based operator of outpatient diagnostic imaging centers. The deal was done in concert with company management, and terms were not disclosed.
NEWS FROM WEDNESDAY 5/14

Visto Corp., a Redwood City, Calif.-based provider of mobile access solutions, has raised $30.3 million in new venture capital funding. The deal continued to wash out existing investors, who had already seen a post-money valuation of $194 million in 1999 drop to around $39 million in 2001. This latest deal gave Visto a pre-money mark of less than $5 million. It was co-led by new backers Oak Investment Partners and Draper Fisher Jurvetson, and included returning investors like Allegis Capital, Blueprint Ventures, New Enterprise Associates, Rustic Canyon Group and Wheatley Partners.

Tellabs Inc. has agreed to acquire San Jose, Calif.-based switchmarker Vivace Networks Inc. for $135 million in cash and employee stock options. Vivace has raised around $119 million of venture capital since its May 1999 founding, including an $84.5 million Series C deal in late 2000 at a post-money valuation of around $585 million. Company investors included Brentwood Venture Capital, Enron Broadband Ventures, Foundation Capital, Meritech Capital Partners, Putnam Management, Redpoint Ventures and Sutter Hill Ventures.

Sabrix, a San Ramon, Calif.-based provider of global transaction tax management software and research, has raised $10.5 million in Series C funding led by Trinity Ventures. Return backers include Mohr, Davidow Ventures and Venture Strategy Partners. Sabrix now has raised $29.6 million since being founded in early 1999, including a $6.2 million Series B round last fall at a post-money valuation of around $25 million.

Seattle Genetics Inc. (Nasdaq: SGEN) has agreed to sell $40 million of Series A convertible stock and common stock warrants to JPMorgan Partners, Baker Brothers Investments, Delphi Ventures and existing shareholder BA Venture Partners. As part of the agreement, Srinivas Akkaraju of JPMorgan Partners and Felix Baker of Baker Brothers will join the Seattle Genetics board of directors.

Bertelsmann has agreed to sell its scientific publishing arm (BertelsmannSpringer) for €1.05 billion euros ($1.2 billion) to UK-based private equity firms Cinven and Candover Investments.

Warner Village, a UK-based multiplex cinema operator, has agreed to be acquired for £250 million ($404 million) by Legal & General Ventures, Boston Ventures and Clarity Partners. Its previous owners were AOL Time Warner and Australia-based Village Roadshow.
NEWS FROM TUESDAY 5/13

Nuera Communications Inc., a San Diego-based provider of voice-over-IP infrastructure solutions for cable television, broadband and telecom service providers, has raised $20 million in a recap of its 1997 Series A funding. The investment was led by Comcast Interactive Cable, Cox Communications, Sandler Capital Management and Argo Global Capital. Return backers included HarbourVest Partners, Bay Partners, Gleacher & Co., Goldman Sachs, Deutsche Bank Capital Partners, SAIC Venture Capital and J.F. Shea.

Venture Economics and the National Venture Capital Association released new data today showing that 65 venture-backed companies were acquired through merger or acquisition for a total disclosed value of $1.34 billion in the first quarter of 2003. These figures represent a decline from the fourth quarter of 2002, when 83 companies attracted $1.62 billion. Mirroring conditions in the broader, non-venture-backed, domestic M&A market, the decline in the first quarter represents the lowest dollar total since the first quarter of 1996, when 27 companies were acquired for $1.23 billion.

Rowland Boonstoppel is out as a London-based general partner with Crescendo Ventures. No reason was given for the move, save for a desire to add more operating experience to the firm’s upper ranks. The move follows last year’s dismissal of Palo Alto-based general partner Richard Grogan-Crane. In related news, Kevin Spreng, in-house general counsel to Crescendo, is planning to return to private practice. PE Week subscribers can read more about Crescendo’s restructuring in the latest print edition, or in the protected Fund News section of www.PrivateEquityWeek.com.

Greg Bohlen has been named chief financial officer with The Aurora Funds. He has spent the past two years as director of the private equity coverage group at UBS Warburg.

Jonathan Barek has joined Telos Venture Partners as a principal. He has spent the past year working on venture capital-related projects for independent VC Donald Lucas, and previous spent three years at venture firm RWI Group, which is managed by Donald Lucas Jr.

Packaged Ice Inc. (Amex: ICY), a Dallas-based packaged ice manufacturer and distributor, has agreed to be acquired in a management-led buyout worth $450 million. The deal is being backed by Trimaran Caital Partners and Bear Stearns Merchant Partners, with Packaged Ice shareholders receiving $3.62 per common share if the deal is closed on or before Sept. 15. If the close occurs after Sept. 15, then the price jumps to $3.50 per share. Credit Suisse First Boston LLC and US Bancorp Piper Jaffray advised Packaged Ice on the transaction.

Clickmarks Inc., a Palo Alto, Calif.-based provider of software solutions for web and wireless application development and deployment, has raised $5 million inew new funding from Draper Fisher Jurvetson ePlanet Ventures, RB Webber & Co. and Vodafone Ventures.

Eastman Kodak Co. has agreed to acquire Applied Science Fiction Inc., an Austin, Texas-based maker of rapid film processing technology. Terms of the deal were not disclosed. Applied Science Fiction has raised around $100 million in venture capital since its 1995 founding from such investors as Amerindo Investment Advisors, CenterPoint Venture Partners, IBM Corp., InterWest Partners, J&W Seligman, JPMorgan Partners, Lago Partners, Rho Ventures, STAR Ventures, Sevin Rosen Funds, TIAA-CREF, Technology Crossover Ventures and Triton Ventures. No recent valuation info for Applied Science Fiction is available, although the company’s worth was pegged at $77.5 million following a $40 million round in early 2001.

The Dwyer Group Inc. (Nasdaq:DWYR), a Waco, Texas-based household services franchisor, has signed a $48 million merger agreement with private equity firm The Riverside Co.. Under the terms of the merger agreement, Dwyer’s stockholders will receive $6.75 in cash for each share of common stock that they own. The purchase price represents approximately a 59% premium to the $4.25 closing share price on May 9. Upon completion of the proposed merger, Dwyer will become privately held by Riverside and certain other stockholders, including members of the Dwyer family and senior management of Dwyer.

Saratoga Partners has received bankruptcy court approval for its $28 million acquisition of Divine Inc.‘s managed services unit. Divine had originally purchased the group, named Data Return Corp., in late 2001 for over $30 million in stock. At the time, Divine said that the deal would help it become profitable. It has since gone bankrupt.

CogniTens Ltd., an Israeli maker of measurement technology, has raised $7.25 million in third round funding from Walden International, Vertex Ventures, Challenge Fund, Israel Infinity Fund, and Pitango Venture Capital. After doing some math from a Dow Jones report on the funding, the company’s post-money valuation appears to be around $9.4 million.

Mercury Interactive Corp. has agreed to purchase Performant Inc., a maker of enterprise performance optimization technology, for $22.5 million. Performant has received around $17 million of venture funding since its June 2000 founding from firms like Alexander hutton Venture Partners, Buerk Craig Victor, Madrona Venture Group, Paladin Partners and WRF Capital.

StemCells Inc. (Nasdaq:STEM), a Palo Alto, Calif.-based biotech company, has entered into an agreement to sell four million shares of its common stock at $1.625 per share to The Riverview Group. The $6.5 million deal is in addition to Riverview’s previous $5 million purchase of StemCells’ 3% Convertible Preferred redeemable stock. To date, Riverview has converted $3 million of its initial purchase, and as a result, still holds $2 million in the 3% Convertible Preferred redeemable stock.

The Daily Deal is reporting today that quarter century-old buyout firm Forstmann Little & Co. may not raise another fund. If true, this would mean that the firm would wind down after 2006.

The Boston Globe is reporting that idealab! has decided to close the Boston office it originally opened on in late 1999. The article says that fewer than 20 people now work in the four company’s housed in the soon to be departed Newbury St. confines.
NEWS FROM MONDAY 5/12
Ed Zander will join Silver Lake Partners this summer as a managing director. Zander has spent the past 15 years at Sun Microsystems Inc., most recently as president and chief operating officer from 1998 through mid-2002.

Acorda Therapeutics Inc., a Hawthorne, N.Y.-based biotech company focused on spinal cord injuries, has raised $55.3 million in new funding led by Easton Hunt Capital Partners. Additional major investors are ABN AMRO Capital, Cross Atlantic Partners, JP Morgan Fleming Asset Management and Techno Venture Management. The company has now raised $129 million since its 1995 founding, including a $40 million round in early 2001 at a post-money valuation of just under $100 million.

Chris Greendale has joined Kodiak Venture Partners as a venture partner focused on software-related investment opportunities. Greendale has over 25 years of software and technology experience, and most recently worked as a venture partner at GrandBanks Capital.

Redline Networks Inc., a Campbell, Calif.-based company focused on increasing network server capacity, has raised $12 million in Series C funding. Charles River Ventures led the deal, and was joined by return backers Advanced Technology Ventures and Ken Oshman. The company now has raised $24.8 million since its early 2000 founding, including a $10 million Series B deal at a post-money valuation of around $21 million.

Jacques Garaïalde has been named managing director at Kohlberg Kravis Roberts & Co. He will work with the New York-based firm’s European team, and primarily focus on French investment opportunities. Garaïalde most recently served as managing director for European venture investments at The Carlyle Group.

Astaro Corp., a Burlington, Mass.-based network security solutions provider, has raised $6.2 million in Series A funding from Insight Venture Partners and Wellington Partners.

SoundBite Communications Inc., a Burlington, Mass.-based provider of interactive voice messaging solutions, has raised $5 million in new venture funding at a post-money valuation of $14 million. Investors included North Bridge Venture Partners, The Venture Capital Fund of New England and Mosaic Venture Partners. The company now has raised $19 million since being founded in 2000.

Ness Technologies Inc., an Israel-based provider of IT solutions, has merged with APAR Infotech, a Pittsburgh-based software services company, in a stock swap valued at $78 million. Warburg Pincus is an investor in both companies, and will have a 34% ownership stake in the combined entity. The Wolfsen Group, another major shareholder, also will hold a 34% ownership stake.

Acorn Systems Inc., a Houston, Texas-based provider of profit management and optimization solutions, has raised $9 million in Series B funding. Austin Ventures led the deal, and was joined by return backer Insight Venture Partners.

Ronald Richard has been named president of The Cleveland Foundation, effective July 1. The Cleveland Foundation is a public charity dedicated to enhancing the quality of life in Greater Cleveland. Richard most recently served a chief operating officer and managing director of In-Q-Tel, the venture capital arm of the CIA.

Prakash Melwani, a founder of Vestar Capital Partners in 1988, has joined The Blackstone Group has a senior partner.

McCormick & Co. Inc. has signed a definitive agreement to purchase Zatarain’s from Citigroup Venture Capital and other investors for $180 million in cash. This purchase price is a multiple of approximately 8X current year EBITDA. Zatarain’s is a national food products brand focused on New Orleans-style cuisine. Stephen Short has joined the law firm of Simpson Thacher & Bartlett as a partner in its London office. Short has been a partner at Ashurst Morris Crisp since 1998, specializing in acquisition finance and other leveraged finance transactions.

Tel Aviv University is launching a new venture capital fund devoted to commercializing technologies developed within the institution. The new $8 million vehicle was raised from U.S. investors, according to a report today from Reuters.

U.K. BioScience Managers and Imperial College London have teamed up on a £50 million (approx. $80 million) venture capital fund that will invest in between 12 to 15 startups in the life sciences sector.

Winterthur (insurance subsidiary of CSFB) has agreed to sell its Republic operation to an private equity syndicate led by Wand Partners for $127 million. Other investors include Banc of America Capital, Greenhill Capital Partners, Brazos Private Equity Partners, 21st Century Group (TW) and Norwest Equity Partners. Republic is Winterthur’s regional operation in the Southwestern U.S.

The Daily Deal is reporting that BancBoston Capital, Berkshire Partners and McCown De Leeuw & Co. are looking to sell pizza chain Papa Gino’s for around $100 million.

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