PE Week Wire — Friday 8/29


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Beverly Berman has joined Advent International as a partner responsible for investor relations and fund marketing activities in North America. She has 19 years of professional experience, including positions as a private equity fund investment professional for Credit Suisse First Boston and as a portfolio manager for the Public Employees’ Retirement Association of Colorado (Colorado PERA).

The Carlyle Group has acquired 90.94% of Kito Corp., a Japan-based maker of hoists and cranes. The transaction is valued at approximately 13.4 billion yen ($111.8 million). Kito is currently listed as a public company on the JASDAQ stock exchange, but Carlyle intends to delist the company and take it private in early November.

American Fiber Systems Inc., a Rochester, N.Y.-based provider of metropolitan fiber optic network infrastructure, has raised $6 million in new venture funding. North Atlantic Capital led the round, with managing director Mark Morrissette taking a board seat. Return backers Sierra Ventures and Lucent Venture Partners also participated. American Fiber Systems now has raised over $40 million since its 1999 inception, including a $19 million round in early 2001 at a post-money valuation of approximately $58 million.

Andigilog Corp., a Chandler, Ariz.-based fabless analog and mixed-signal semiconductor company, has raised $4.2 million in Series A funding. Valley Ventures led the deal and was joined by Mission Ventures and Riconada Investments. The deal was sold with a pre-money valuation of $2.5 million.

Eagle Broadband Inc. (AMEX:EAG), a League City, Texas-based supplier of broadband products, services and content, has completed its previously announced $10 million round of financing led by Aggregate Networks LLC. The funding includes the purchase of a note and the issuance of Series A Preferred shares, with the terms calling for an initial investment of $3 million followed by an additional minimum of $7 million within 90 days.

Vector Capital Group has closed its acquisition of Corel Corp. (Nasdaq: CORL, TSX: COR), with all outstanding common shares of Corel being purchased for $1.05. Corel’s securities are expected to cease trading by the close of markets today on the Nasdaq, and by the close of markets on Tuesday, Sept. 2, 2003 on the TSX.

Monterey Design Systems Inc., a Sunnyvale, Calif.-based maker of EDA software for ASIC design, has received $4.96 million in new funding from Nokia Venture Partners and Information Technology Ventures. The capital is part of a previously announced round that is now worth a total of $15.16 million, and also included Sevin Rosen Funds, Excelsior Venture Partners, RHO Management Trust, Lucent Venture Partners, Kaufman LLC and Vertex Partners. The company now has raised over $85 million since its 1997 inception, including a $25 million round in late 2000 at a post-money valuation of $146 million, and an $18.7 million round in late 2001 at a post-money valuation of around $59 million.

IGN Entertainment (Nasdaq: IGNX) and Boston-based private equity firm Great Hill Partners have completed a “going private” merger transaction in which stockholders of IGN Entertainment accepted an offer of $12 in cash (without interest) for each outstanding share of IGN common stock they own. As a result of the merger, IGN is now majority-owned by Great Hill Partners, with Chris Anderson, Mark Jung and Ken Keller (IGN’s chairman, CEO and VP of engineering, respectively) continuing as company stockholders. Great Hill Partners and IGN management provided all funding for the transaction. Trading in the company’s common stock on the Nasdaq SmallCap Market has officially ended, and IGN Entertainment is no longer a public company.

Kriptiq Corp., a Beaverton, Ore.-based provider of middleware platforms for automating healthcare workflows, has raised $7.9 million in Series A funding. Voyager Capital led the deal with a $2.45 million investment, and Voyager principal Erik Benson took a company board seat. SmartForest Ventures also participated.

Harvest Growth Partners, a Salt Lake city-based private equity and banking boutique focused on the Mountain West region, announced its formation yesterday. The firm also announced its first investment: a $1 million infusion into Metro Waste, a Utah-based construction and demotion waste hauler.

Goldman Sachs has been added to the syndicate of investors on U.S. Airways Group‘s $37 million private equity placement. Already participating were affiliated funds of Fallaron Capital Management and Oaktree Capital Management.

The Financial Times is reporting that Carlyle Group is considering a partnership with Russian bank Alfa Bank, which would result in a $500 million private equity fund focused on Russian companies.

The Boston Globe is reporting that Mass. Governor Mitt Romney has asked Alex Dunn to spearhead an effort to get more Republicans elected to the state legislature. Dunn most recently served as Romney’s chief-of-staff (resigned August 1), before which he was an entrepreneur-in-residence with venture capital firm General Catalyst.

The Globe and Mail is reporting that the Ca$1.23 billion (approx. $878 million) buyout price tag for Bombardier Inc. could be cut by up to $150 million (approx. $107.5 million). The reason for the price drop is an anticipated shortfall in the company’s pension fund for employees.
NEWS FROM THURSDAY 8/28
Draper Fisher Jurvetson is extending its venture capital network by launching a $100 million fund focused on Canada-focused companies. The Redwood City, Calif.-based firm’s latest effort will be managed by tech entrepreneur Ilse Treurnicht and the team from Primaxis Technology Ventures Inc., a Toronto-based investment shop established in 1998 by RBC Technology Ventures and BTG.

Amalfi Semiconductor Inc., a Los Gatos, Calif.-based fabless semiconductor company focused on low-power RF design, has raised $12 million in Series A funding. The deal was co-led by Doll Capital Management and Trinity Ventures.

Myogen Inc., a Denver-based biopharmaceutical company focused on cardiovascular diseases, has raised $40 million in its second round of Series D funding. The insider deal was led by New Enterprise Associates, and also included JPMorgan Partners, InterWest Partners, Sequel Venture Partners, Perseus-Soros Biopharmaceutical Fund, CMEA Ventures and Pacific Rim Ventures. This is the second time Myogen has raised Series D funding. The first was a $67.37 million deal closed in mid-2001 at a post-money valuation of approximately $102 million.

John MacIntyre, former president of TD Capital (1995-2000), has been appointed to the board of directors at Precyse Solutions, a King of Prussia, Pa.-based provider of outsourced medical transcription services.

Golden Gate Capital has agreed to acquire Itronix Corp., a mobile computing subsidiary of bankrupt Acterna Corp. (OTC BB: ACTRQ). No deal terms were disclosed, and the transaction is subject to bankruptcy court approval.

Invistics Corp. (f.k.a. SAK Logistics), an Atlanta-based developer of manufacturing software that accelerates factory performance, has held a $2.5 million first close on its Series A financing. H.I.G. Ventures and Intersouth Partners co-led the deal, and were joined by Imlay Investments and Atlanta Technology Angels.

Colorado Governor Bill Owens and Treasurer Mike Coffman yesterday said that they are opposed to the state’s CAPCO program. The Colo. CAPCO was established in 2001, and follows the standard model whereby insurance companies can divert some of their corporate taxes into the CAPCO, which makes venture capital investments into local companies.

MEMSCAP (Euronext: MENS) has agreed to acquire GalayOr Inc., and to increase its share capital by cash from financial investors. GalayOr (“Light Wave” in Hebrew) is an Israel-based maker of optical components that has joint development agreements with JDS Uniphase and Analog Devices. The 16-person company has a net cash position of $1.5 million, and has received over $8 million in venture capital funding from Evergreen Canada Israel Investments, Platinum-Neurone Ventures and STI Ventures.

TECO Energy (NYSE: TE) has agreed to sell its interest in the 370-megawatt, Florida-based Hardee Power Station to private equity firm GTCR Golder Rauner LLC and GTCR portfolio company Invenergy. The transaction price is $115 million, plus the assumption of all outstanding project- related debt. The deal is slated to close by the end of September, subject certain regulatory and lender approvals.

The Financial Times is reporting that UK-based private equity firm Permira and a Swisscom subsidiary are in talks to acquire a 70% stake in MobilCom AG. The shares in question are currently held by France Telecom (28.5%) and MobilCom founder Gerhard Schmid and his wife (40%).

NEWS FROM WEDNESDAY 8/27

TolerRX Inc., a Cambridge, Mass.-based biopharmaceutical company focused on the immune system, yesterday filed for a $75 million initial public offering. The company hopes to trade on the Nasdaq under the ticker symbol TLRX. TolerRX has raised a total of $58 million in venture capital funding, including a $35 million Series C deal in late 2002/early 2003 at a post-money valuation of approximately $75 million. Major company shareholders include HealthCare Ventures (31.2% pre-IPO ownership), Skyline Venture Partners (16.8%), Sprout Group (10.8%), Rho Capital Partners (9%), Artal Services NV (7.6%) and Genentech Inc. (5.3%). Smaller shareholders include Vertex Management, Lehman Brothers, Mizuho Capital, Aozora Investments and Duke University.

TA Associates has acquired One Call Medical Inc., a Parsippany, N.J.-based provider of outsourcing solutions for the worker’s compensation industry. The deal is worth $115 million, although additional details were not disclosed. Brown Brothers Harriman & Co.‘s 1818 Mezzanine Fund, previously the largest shareholder in One Call Medical, will maintain a stake in the future.

Bombardier Inc. is expected to announce today that it has agreed to sell its recreation products group (which includes Ski-Doo snowmobiles and jet-skis) for Ca$1.23 billion (approx. $878 million), according to the Globe & Mail. The buyers include Bain Capital (50%), Caisse de dépôt et placement du Québec (15%) and the Bombardier family (35%).

American Pad & Paper LLC (a.k.a. Ampad), a Plano, Texas-based maker of writing pads, retail envelopes and specialty papers, has emerged from Chapter 11 bankruptcy after an eight month stay. The recapitalization includes $27 million of equity from Crescent Capital, and a $34.5 million revolving line of credit from PNC Bank

Metabolex Inc., a Hayward, Calif.-based pharmaceutical focused on diabetes and related metabolic diseases, has raised $27 million in new venture funding. The deal was co-led by return backer Bay City Capital, and new investors Biotech Turnaround Fund BV and CDP Capital Technology Ventures. Previous investor Charter Ventures and new investor KBC also participated, while CIBC World Markets served as an agent on the financing. Metabolex now has raised over $100 million of venture capital since its 1988 founding, including a $10.8 million infusion in early 2000 at a post-money valuation of approximately $140 million.

The Swedish government has abolished capital gains taxes on the sale of subsidiary companies, in an effort to attract foreign investment into Swedish companies. In addition, a new “Companies Act” is expected to be implemented in 2005, at which point overseas stockholders will be allowed to register votes via the Internet of by power of attorney.

Fortinet, a Santa Clara, Calif.-based provider of network security solutions, has raised $30 million in Series D funding. Redpoint Ventures led the deal, and was joined by fellow new investor Meritech Capital Partners and unnamed return backers. The company now has raised $43 million since its 2000 inception.

Citigroup Venture Capital (CVC) has expressed interest in making a $350 million private equity investment into Federal-Mogul Corp. (OTC BB: FDMLQ), a Southfield, Mich.-based supplier of automotive parts. The company filed for Chapter 11 bankruptcy protection on October 1, 2001 due, in large part, to asbestos liabilities. Federal-Mogul has asked the U.S. Bankruptcy Court in Delaware to grant CVC 90-day exclusive negotiating rights and to authorize Federal-Mogul to reimburse CVC for such necessary fees and expenses.

The Business Development Bank of Canada (BDC) and the Caisse de dépôt et placement du Québec (Caisse) have teamed up to increase the amount of financing available to Canada’s small-and medium-sized enterprises. First, BDC will purchase a 50% interest in a stipulated portfolio of private investments previously managed by CDP Capital – Americas (formerly managed by CDP Accès Capital). Under the terms of this agreement, BDC will take over the management of this portfolio. Under the terms of the second part of the alliance, BDC and the Caisse will create a Ca$300 million (approx. $214 million) investment fund to support the growth of Canadian small business. This fund will be invested over the next three years, with both parties committing an amount of Ca$150 million.

The Nordic Business Report says that Swedish venture firm Affarsstrategerna AB has proposed to acquire all shares of school photography company said on Wednesday (27 August) that it proposed to acquire all shares of school photography company Photometric AB. The Economics Times is reporting that Warburg Pincus has paid $50 million for a 25% stake in Radhakrishna Foodland, a Mumbai, India-based food distribution and logistics services company.
NEWS FROM TUESDAY 8/26
McData Corp. (Nasdaq: MCDTA/MCDT) has agreed to acquire Nishan Systems Inc., a San Jose, Calif.-based provider of storage network products. The deal is worth a total of approximately $83 million in cash and $2 million in debt. Nishan had raised around $80 million in venture capital funding since its 1999 inception, including a $52 million Series C deal in late 2000 at a post-money valuation of around $350 million. Investors on that financing included Altos Ventures, ComVentures, Dell Ventures, Lightspeed Venture Partners, QTV Capital, Siemens Venture Capital, Sofinnova Ventures, Sun Microsystems, Tamir Fishman Ventures and Texas Pacific Group.

McData Corp. also has agreed to acquire Sanera Systems Inc., a Sunnyvale, Calif.-based provider of storage network products. This deal involves around $102 million in cash. Sanera had raised over $100 million in venture capital funding, including a $35 million Series C deal earlier this year. Following its previous round of funding in early 2001, the company had been valued at approximately $85 million. Sanera investors included Acorn Venture Partners, ArrowPath Capital Group, CMEA Ventures, Enterprise Partners, Goldman Sachs, Greylock and Storm Ventures.

McData Corp. also made a $6 million strategic investment into Aarohi Communications Inc., a San Jose, Calif.-based provider of system-on-a-chip solutions for the storage networking market. The deal is listed as a B-1 investment, and values Aarohi at $40 million post-money. Aarohi has raised over $21 million in venture funding since its 2001 inception, from investors Evercore Partners, JumpStart Fund Advisors, Kennet Capital and TeleSoft Partners.

ONI Inc., a Wilmington, Mass.-based maker of MRI systems, has raised $8.5 million in the first tranche of new venture funding. The company – which is currently selling Series A stock even though it’s last venture infusion involved Series E securities – expects to hold a $3 million second close within the next three months. Investors on the closed tranche include Galen Partners, Ivy Healthcare Capital, Sage Hill Partners and various angel investors. ONI has raised approximately $20 million since its 1997 founding.

SIRVA Inc., a Chicago-based provider of relocation services, has filed for a $350 million initial public offering. The company was launched in 1998 as an acquisition platform by buyout firm Clayton, Dubilier & Rice, which owns 81% of the company pre-IPO. Its first acquisition was North American Van Lines, and SIRVA later merged with Allied Van Lines. Credit Suisse first Boston and Goldman Sachs will act as join book runners on the offering. In its offering papers, SIRVA acknowledged that it currently is under federal antitrust investigation.

Secure Elements, a Herndon, Va.-based security software startup, has raised $5 million in Series A funding. The Carlyle Group and DCM-Doll Capital Management co-led the funding. PE Week subscribers can read more on this exclusive story in the protected Deal News section of www.PrivateEquityWeek.com .

Afferent Corp., a Providence-based medical device maker focused on chronic neurological dysfunction, has received a $750,000 grant from the National Institute of Health, plus an additional $300,000 from an investor group that includes Rhode Island’s Slater Center for Biomedical Technology, the venture capital arm of Boston University and investment firm Pharos LLC.

LECG LLC (a.k.a. The Law & Economics Consulting Group), an Emeryville, Calif.-based provider of economics consulting services, has filed for a $97.75 million initial public offering. The company had been listed on the NYSE, but went private after being bought out by The Metzler Group (now known as Navigant Consulting Inc.) in August 1998. In September 2000, September 2000, 35 members of company management enacted a management buyout of LECG with the help of Thoma Cressey Equity Partners. Prior to the IPO, Thoma Cressey owns 39.4% of LECG.

NuCO2 Inc. (Nasdaq: NUCO), a Stuart, Fla.-based supplier of bulk CO2 systems for carbonating fountain beverages, has completed a $73 million refinancing of its existing debt. The package comprises a $50 million senior credit facility that includes a $10 million revolving line of credit, and the issuance of $30 million in new subordinated notes. The senior credit facility lenders are BNP Paribas, Royal Bank of Scotland, Merrill Lynch Capital and Bank of America. The subordinated notes – which come with detachable common stock warrants and are due in Feb. 2009 – were purchased by JPMorgan Partners, Royal Bank of Scotland and entities affiliated with existing shareholders Craig L. Burr and William P. Egan.

Philipp von Ilberg has joined law firm Dewey Ballantine LLP as a partner resident in its Frankfurt, Germany office. He will begin on October 1, and previously worked at Clifford Chance Punder.

Reuters is reporting that a $100 million India-focused private equity fund has been established by Standard Chartered Private equity and Temasek Holdings Ltd., which is the Singapore government’s investment arm.
NEWS FROM MONDAY 8/25

Zilliant Inc., an Austin, Texas-based provider of strategic profit and revenue optimization software, has raised $14.5 million in Series C funding. The deal included new investor JPMorgan Partners, plus return backers Austin Ventures, Trellis Partners and ABS Ventures. The company now has raised over $30 million since its 1998 inception, including a $7.05 million infusion in early 2001 at a post-money valuation of $20 million.

Morgenthaler Partners has acquired Gates Formed-Fibre Products Inc., from Gates Corp., a wholly owned subsidiary of Tomkins PLC. The company has been renamed Formed Fiber Technologies Inc., and it will continue to supply thermoformed, non- woven system solutions to North American automotive OEMs and automotive suppliers. Morgenthaler, working with FFT’s existing management, plans to use the company as a platform to acquire other fiber solution suppliers. Terms of the buyout were not disclosed.

LSSi Corp., an Edison, N.J.-based developer of advanced directory databases, has raised $16 million in new funding. Warburg Pincus led the deal, and was joined by return backer Granite Ventures. The company now has raised over $60 million in venture funding, including a $22 million infusion in late 1999 at a post-money valuation of approximately $110 million.

Coley Pharmaceutical Group Inc., a Wellesley Hills, Mass.-based developer of immunoregulatory drugs, has closed on $30 million of a $35 million preferred stock placement. The final $5 million tranche is expected to close within the next month. Thomas, McNerney & Partners led the deal, and was joined by fellow new investor Venrock Associates, and return backers like Techno Venture Management and Global Life Science Ventures. Coley now has raised over $165 million in private equity funding since its 1997 inception.

 

Rayovac Corp. (NYSE: ROV) has agreed to acquire Remington Products Co., a Trumbull, Conn.-based provider of personal care appliances like electric razors. The $322 million deal includes the assumption of $157 million in debt. Most of the company is co-owned by the family of the late Victor Kiam and Vestar Capital Partners, which invested around $30 million into Remington as part of a 1996 recapitalization.

SkyCross, a Melbourne, Fla.-based developer of wireless antenna solutions, has raised $10.5 million in Series B funding. Return backer BancBoston Capital led the deal, and was joined by BAE Systems and Investment Partners of Orlando. The company now has raised approximately $20 million since its 2000 inception.

Advanstar Communications Inc. has agreed to acquire the healthcare industry-specific publications of The Thomson Corp. (NYSE: TOC). The $135 million purchase price will be paid in cash, with some of the money coming from Advanstar private equity backer DLJ Merchant Banking Partners. (The PE Week Wire is published by Thomson Financial, a subsidiary of Thomson Corp.)

Raymond Lane, a partner with Kleiner Perkins Caufield & Byers and former Oracle Corp. president, has joined Arnold Schwarzenegger‘s economic team.

Cambridge Associates has announced a data sharing arrangement with Alternative Investor‘s VentureOne.

The South Florida Sun-Sentinel is reporting that David Bates was re-elected president of the Gold Coast Venture Capital Club for a fifth term. Bates is a shareholder with Gunster Yoakley.

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