PE Week Wire — Friday 7/18


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Rustic Canyon Partners has held a $130 million initial closing on a new SBIC fund that is slated for a Q3 final close of $175 million. The Los Angeles-based venture firm also announced that John Staenberg has signed on as a Seattle-based partner. He is founder of Staenberg Venture Funds.

 

Riverside Co. has acquired Nordco Inc., a Milwaukee-based designer and provider of railroad maintenance-of-way equipment and repair partners. No deal terms were disclosed.

Compellent Technologies Inc., an Eden Prairie, Minn.-based network storage company, has raised $14.31 million in Series A-1 and Series A-2 financing. New investor Cargill Ventures participated, as did return backers El Dorado Ventures and Crescendo Ventures. The company now has raised over $23 million since its 2002 inception.

ArQule Inc. (Nasdaq : ARQL) has agreed to acquire Cyclis Pharmaceuticals Inc., a Norwood, Mass.-based cancer therapeutics company focused on small molecule drug discovery. The deal is for approximately $25 million in stock, and is expected to close in August. Cyclis is backed by Ampersand Ventures, which invested $5 million in Series A funding in early 2002 at a post-money valuation of $16 million.

eUniverse Inc. (Nasdaq : EUNIE), a Los Angeles-based interactive gaming network operator, has received $2 million in debt financing from VantagePoint Venture Partners. VantagePoint also has agreed to purchase $10 million of preferred stock and a $20 million line of credit to be used in future transactions. The debt capital is available immediately, while the rest is subject to certain conditions and is expected to close within the next 75 days.

Lumenos Inc., an Alexandria, Va.-based provider of consumer-based healthcare services, has raised $10.02 million in the first closing of an $18 million financing round (according to an SEC filing). A Washington Post report says that investors on the initial tranche included Draper Fisher Jurvetson, Internet HealthCare Group, KBL Healthcare Ventures, Liberty Partners and Novartis AG.

Private Equity Online is reporting that Baring Private Equity Partners is planning to raise a second Central European private equity fund.

Adam Davidson has been named executive vice president of the professional services group at RSM EquiCo. He most recently served as a vice president of strategic planning and business development at J.P. Morgan Chase & Co.

Didier Perez, a managing partner of venture firm Inovation Ventures, has been elected to the board of Mount Zion Health Fund, a grant-making public charity that features a $45 million endowment.

NEWS FROM THURSDAY 7/17

Tercica Inc., a South San Francisco-based drug developer focused on growth biology, has raised $44 million in Series B funding. Rho Ventures led the deal, alongside fellow new investors Care Capital and MedImmune Ventures. Also returning were existing backers MPM Capital and Prospect venture Partners, both of which participated in the company’s $21.5 million Series A funding last year.

Intercell AG, a Vienna-based developer of vaccines for infectous diseases and cancer, has raised $34 million in Series C funding led by Global Life Science Ventures. New investor STAR Ventures also participated, alongside return backers Apax Partners, Nomura, TVM and NIB Capital.

Starbak Communications Inc., a Waltham, Mass.-based provider of media content delivery infrastructure, has raised $3 million in Series B funding at a post-money valuation of over $15 million. Investors included Atlas Venture, Carlyle Venture Partners and Venrock Associates.

Scale8 Inc., a San Francisco-based data storage service provider, has gone out of business. The company raised over $56 million of venture capital since its 1999 inception, including a $25 million Series C deal in late 2001 at a post-money valuation of approximately $75 million (it was valued at approx. $100 million in an earlier deal). Investors included CenterPoint Venture Partners, InterWest Partners, Oak Investment Partners and STAR Ventures.

Global Asset Capital and Hamilton Lane Advisors have completed their acquisition of Viventures Partners, the venture capital arm of Vivendi Universal SA.

venture capital arm. The unit currently has approximately $400 million under management.

Alex Ott and Haim Kopans have both joined Jerusalem Venture Partners as venture partners. Ott is a former senior executive with Siebel Systems and SAP, while Kopans was co-founder and CTO of Precise Systems Software.

State Street Global Alliance LLC, a jointly-owned subsidiary of State Street Global Advisors and Dutch pension fund ABP, has signed a definitive agreement to acquire a majority interest in the assets of Shott Capital Management LLC (SCM), a Boston-based investment advisor specializing in distribution management and private equity partnership investing. SCM, which was founded in 1991, will maintain its name and operate as a separately capitalized, independently managed Global Alliance company. The transaction is expected to close in the fourth quarter of 2003.

Ionix Pharmaceuticals Ltd., a Cambridge, UK-based analgesic drug discovery company, announced today that it raised 10 million (approx. $15.9 million) via a Series B funding round back in March. Return backers included Apax Partners and The Wellcome Trust. The company now has raised over $27 million since its 2001 inception, including an $11.3 million Series A deal at a post-money valuation of approximately $19.7 million.

Andigilog Inc., a Chandler, Ariz.-based fabless analog and mixed-signal semiconductor company, has held a $1.2 million first close on its Series A funding round. The deal is slated to raise upwards of $3.7 million (according to an SEC filing), and so far has secured capital from Valley Ventures.

Lightyear Capital, a New York-based private equity firm, has agreed to acquire the European institutional equity brokerage division of the Julius Baer Group. Current management of the firm, led by Stephane Michel, CEO of Julius Baer Brokerage, is remaining and participating in the buyout, providing approximately 15% of total capitalization. In addition, Julius Baer Holdings will retain a 15 percent minority interest.

 

Darby Asia Investors Ltd. has invested $35 million into power provider First Philippine Holdings Corp. Forrester Research Inc. (Nasdaq: FORR) today launched the Forrester Research VC Program, a new stream of research and consulting services dedicated to serving the specific needs of venture capital firms.

Jim Lash, chairman of venture firm Manchester Pricnipal LLC, has been nominated for first selectman by the Greenwich, Conn. Republican Town Committee.

Reuters is reporting that Kleinwort Capital has raised $36.69 million to acquire a 45% stake in Hat Trick Productions, a UK-based television show production company.

HandyLab Inc., an Ann Arbor, Mich.-based provider of health-care diagnostics company, has been awarded a $2 million grant from the National Institute of Standards and Technology’s Advanced Technology Program to develop a highly sensitive, low-cost, and portable broad spectrum DNA analysis device using electrochemical detection. The company is backed by such venture firms as EDF Ventures, SBV Venture Partners and XR Ventures.

The Carlyle Group is reportedly planning to bid for a controlling interest in Kito Corp., a Japanese crane producer.

NEWS FROM WEDNESDAY 7/16

Interquest Communications, a provider of broadband Internet services to the multi-family real estate industry, has closed a $5 million Series B funding. Chrysalis Ventures led the deal and joined by ComVentures.

W. P. Carey & Co. LLC has acquired the national distribution center of Lillian Vernon Corp. for approximately $37 million. The sale-leaseback transaction was an instrumental part of the acquisition financing used by Ripplewood Holdings LLC, a private equity investor, and ZelnickMedia, a New York-based media company, to purchase Lillian Vernon, headquartered in Rye, N.Y., for $60.5 million.

HSBC Private Equity received the go ahead from the European Commission to go through with its acquisition of Actaris from LBO France. Actaris, once part of Schlumberger, is a gas-, water- and heat metering business.

FlexLight Networks Inc., an Atlanta-based optical access company, has raised $17 million in a Series C round of venture capital funding. New investors include St. Paul Venture Capital, Accel Partners and Applied Materials Ventures, while Concord Ventures and Coral Ventures represented the returning backers. Additionally, St. Paul General Partner Bill Cadogan, Fahri Diner, a general partner with Applied Materials, and Accel Partners General Partner Joe Golden were all added to FlexLight’s board of directors.

BlueArc Corp. has secured an additional $47 million in funding that will further promote the company’s expansion in the network attached storage (NAS) market. Meritech Capital Partners led the deal, with co-investments from Crosslink Capital and RWI Group.

Teamplate, a provider of business process workflow technology for Microsoft environments, received strategic investment from Siemens Venture Capital (SVC). Teamplate will use the capital infusion to expand its product offerings to meet the demands in the global IT market.

David E. Poltack has been promoted to a general partner with Techno Venture Management. Poltack works with TVM’s finance team out of the firm’s Boston office.

Michael Sweeney has been promoted to a general partner with InterWest Partners. Sweeney has more than 20 years’ experience in the field of cardiovascular technology. He has worked with InterWest portfolio companies since 1985, both as an investor and a CEO. In 1998, Sweeney joined InterWest nas an entrepreneur-in-residence.

Shore Capital sold a 13% stake in Israel’s XTL Biopharmaceuticals to a Healthcare Ventures. Shore Capital says the London-listed biotech firm needed investors with more sector knowledge.

NEWS FROM TUESDAY 7/15

AppForge Inc., an Atlanta-based provider of products and services for the mobile and wireless industry, has raised $8.3 million in Series B funding. The Grosevenor Funds led the deal, and was joined by fellow new investors Council Ventures, The Warren Group and Tim Draper, a managing director of Draper Fisher Jurvetson. Return backers include Draper Atlantic, C&B Capital and Sinclair Ventures. The company now has raised $14.8 million in venture capital, including a $6.5 million Series A deal in early 2001 at a post-money valuation of approximately $19.75 million.

Refractec Inc., an Irvine, Calif.-based ophthalmic device manufacturer, has raised $9 million in a continuation of its Series D financing. Return backers included TH Lee Putnam Capital Management, The Entrepreneur’s Fund of R.B. Webber & Co., Brentwood Venture Capital and Delphi Ventures. New investor Versant Ventures also participated. The company now has raised approximately $35 million to date, including the first $5.1 million Series D tranche at a post-money valuation of $63 million.

Insight Equity has completed a $220 million acquisition of Texas-based fuel distributor Direct Fuels. Insight provided most of the deal’s equity, with Najeti Ventures purchasing a minority stake and PNC Bank providing a $20 million revolving credit facility. The company’s president and CTO will remain in place, but Ross Gatlin of Insight will become CFO and Victor Vescovo of Insight serving as COO.

The City of Philadelphia Board of Pensions and Retirement has selected Franklin Park as advisor for its private equity portfolio, replacing Hamilton Lane Advisors. Franklin Park, which recently changed its name from Franklin Investment Advisors, was formed earlier this year by six former Hamilton Lane professionals.

Fiberlink Communications, a Blue Bell, Pa.-based provider of remote access solutions, has raised $50 million in new funding. Technology Crossover Ventures led the deal, and was joined by return backers Goldman Sachs, GE Equity, Edison Venture Fund and NewSpring Ventures. The company now has raised approximately $85 million, including a $30 million round in 2000 at a post-money valuation of $90 million.

C.H. James & Co. has entered into a partnership with the Goldman Sachs Urban Investment Group. The two firms will work together to identify and assess potential acquisition opportunities in the food processing industry, targeting minority-owned or operated companies with revenue of $50 million or more.

Sea Containers Ltd. (NYSE: SCRA) has sold the Isle of Man Steam Packet Co. to Montagu Private Equity Ltd. for 142 million pounds sterling ($233 million).

Edison Schools, the nation’s largest manager of public schools, has signed a definitive merger agreement with a company formed by Chris Whittle, its founder and CEO, and an affiliate of Liberty Partners, a private equity firm based in New York City. The transaction will bring Edison back into the private markets, and is valued at approximately $174 million.

FatPipe Networks Inc., a Salt Lake City-based developer of router clustering devices, has raised $3 million in new venture funding. VSpring led the deal, and was joined by return backers Tim Draper, Wasatch Venture Fund and Japan’s Odyssey Ventures. The company reports that it hit profitability three months ago. KnowledgeStorm, an Atlanta-based operator of an online business technology directory, has raised $2.4 million in new venture funding from return backers Apex Venture Partners, Imlay Investments, Live Oak Equity Partners, Sterling Venture Partners and Total Technology Ventures. The Israel Venture Capital Research Center is reporting that 86 private Israel-based high-tech companies raised $271 million in venture capital during Q2 2003, which is up 28% over Q1 2003 totals. ChannelWeb is reporting that AltoWeb Inc. has gone out of business. The Palo Alto, Calif.-based provider of J2EE automation solutions had raised over $33 million in venture capital, including a $15 million Series B deal in 2000 at a post-money valuation of $46 million. AltoWeb investors included Accenture Technology Ventures, Intel Capital, McKenna Ventures and Norwest Venture Partners

NEWS FROM MONDAY 7/14

Intersperse Inc., a Pasadena, Calif.-based provider of enterprise application management software, has raised $9.3 million in third-round funding. The insider round – which was actually transacted as an extension of the company’s $12 million Series B deal from October 2001 — included return investments from Palomar Ventures, Kleiner Perkins Caulfield and Byers, Clearstone Venture Partners and Rustic Canyon.

Atrica Inc., a Santa Clara, Calif.-based provider of optical Ethernet equipment for the metro networking market, recently raised $17 million in a first close of an ongoing Series D round that is expected to raise upwards of $25 million The only new investor on the first close was Intel Capital, while return backers included Accel Partners, Ascend Technology Ventures, Benchmark Capital, Challenge Fund, Innovacom (the venture capital subsidiary of France Telecom), Gemini Israel Fund, Investor Growth Capital, JK&B Capital and St. Paul Venture Capital. The company now has raised a total of $134 million since its early 2000 inception, including a $75 million round in early 2002 at a post-money valuation of $160 million.

Kalido Group has officially broken off from its corporate parent via an $18 million investment from Atlas Venture and Benchmark Capital. The London-based provider of data warehouse management solutions had been spun off as a separate entity by the Royal Dutch/Shell Group of Cos. in 2001, but until now had been 100% owned by the energy conglomerate. In related news, Kalido has hired Boston resident Bob Potter as its new CEO, replacing founder Andy Hayler, who remains with the company as chief strategist.

JPMorgan Partners and Candover Investments PLC have teamed up in an attempt to purchase the Oil, Gas and Petrochemicals division of ABB Ltd., the Switzerland-based electric engineering and automation company. According to a source close to the deal, the asking price is approximately $1 billion, although ABB officials have put the price tag in the $1.5 billion neighborhood.

 

Matrics Inc., a Columbia, Md.-based company focused on UHF Radio Frequency Identification (RFID) solutions, has raised $20 million in Series C funding from return backers The Carlyle Group, Novak Biddle Venture Partners and Polaris Venture Partners. The company now has raised over $35 million in venture capital since its 1999 inception, including a $14.5 million Series B round in late 2001 at a post-money valuation of around $30 million.

Charles Noski has agreed to become a senior advisor to The Blackstone Group. Noski retired from AT&T as vice chairman in November 2002, after serving as AT&T’s CFO from December 1999 to June 2002. Prior to joining AT&T, he was president and COO and a member of the board of directors of Hughes Electronics Corp.

Xelerated Holdings Inc., a Burlington, Mass.-based supplier of high-performance network processors, has raised $12.5 million from return backers Atlas Venture, Alta Partners and Startupfactory. The company now has raised a total of $26 million since its 2000 inception.

Cadence Design Systems Inc. (NYSE: CDN) has agreed to acquire Verplex Systems Inc., a Milpitas, Calif.-based developer of verification software solutions. Terms of the deal were not disclosed. Verplex was founded in 1997, and has received venture capital funding from such investors as VCEDA Partners Inc., Tallwood Venture Capital, Merubeni Solutions (Japan), Capital Plus Investment (Taiwan) and Champion Venture (Taiwan).

FirstRain Inc., a New York-based provider of business monitoring software, has raised $8.27 million in Series B funding. New investor Ampersand Ventures led the round, joining existing backers St Paul Ventures, Diamondhead Ventures and Myriad Investments. As part of the transaction, Marc Dulude and Charles Tie of Ampersand Ventures will join the FirstRain board of directors, with Dulude being assuming the role of chairman.

Jupitermedia Corp. (Nasdaq: JUPM) has acquired the assets of DevX.com from DevX.com Inc. for $2.25 million in cash, 200,000 restricted shares of Jupitermedia common stock and the assumption of certain liabilities. DevX is a Mountain View, Calif.-based provider of technical information and services for corporate application developers. It was formed through around $6 million in venture capital investment led by Hummer Winblad Venture Partners.

Austin Ventures has signed a definitive agreement to acquire Staktek Corp., an Austin, Texas-based designer of design of memory stacking technologies. Terms of the deal, which is expected to close by the end of August, were undisclosed. In addition to funds provided by Austin Ventures, senior debt financing is being provided by Comerica Bank and Guaranty Bank.

Carefx Corp., a Mesa, Ariz.-based provider of visual integration and context management technology that enables desktop integration of clinical data from hospital IT applications and databases, has raised $7.2 million in new funding from CB Health Ventures, Grayhawk Venture Partners, Highway12 Ventures, Solstice Capital, Village Ventures and members of Carefx’s management team.

Interquest Communications has purchased substantially all of the assets of the BroadBandNow! Network, an Irving, Texas-based ISP that filed for bankruptcy protection in February. BroadBandNow had raised over $50 million in venture capital from such investors as Geneva Merchant Banking Partners and Sportswood Capital. Interquest is backed by ComVentures.

Native Networks Ltd., a London-based developer of products for optical access networks, has raised $11.5 million in third-round funding. Infinity and Jerusalem Venture Partners led the deal, and were joined by fellow return backers Alta Berkeley Venture Partners, Anschutz Investment Company, Apax Partners, Delta Capital Investments, Israel Seed Partners, SkyPoint Capital Corporation and Soros Private Equity Partners.

Capital Management Advisor, a Geneva-based fund-of-hedge funds provider, has named former Israel PM Ehud Barak to its newly-established advisory board. The firm also added Meir Barel, founder and managing partner of Star Ventures, and Michael Garfinkle, managing director of Moore Capital Management.

LexisNexis U.S. has entered into an agreement to acquire Applied Discovery, a Seattle-based provider of Web-based electronic discovery services to U.S. law firms, large corporations and government agencies. Applied Discovery has raised over $10 million in venture capital from such firms as Westbury Partners and Zilkha Capital.

Cerberus Capital Management is contemplating a formal bid to acquire Clayton Homes Inc., according to various press reports. So far, Berkshire Hathaway is the leading contender with a $1.7 billion bid.

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