PE Week Wire — 1/9/06-2/3/06

Random Ramblings

I was working on a comprehensive column on M&A, but ran out of time (I’m sure you’re shocked, just shocked). So instead here are the salient points, followed by some unrelated notes:

*** The majority of M&A professional believe that M&A activity will continue to rise in 2006, according to the ACG/Thomson DealMakers’ Survey. A related survey found that 90% of investment bankers, private equity pros and corporate executives believe that the current environment for M&A and corporate growth is excellent or good, which represents a 5% rise over June 2005 results. Nearly 30% of 1,977 survey respondents expect the technology sector to experience the most merger activity in 2006, followed by manufacturing and distribution (19%), healthcare and life sciences (18%), business services (11%), financial services (9%) and retail (3%). The 355 private equity respondents, however, ranked healthcare and life sciences first with 33 percent. This was followed by tech (20%), business services (17%), financial services (9%), consumer products/services (8%), manufacturing and distribution (7%) and retail (2%).

*** All of this optimism – not to mention rising M&A tallies — is driven by four separate factors: (1) Sarbanes-Oxley costs have dampened private company enthusiasm for going public on U.S. exchanges. Some of this drop-off will be soaked up by alternative exchanges like London’s AIM, but most liquidity-seeking companies will try the M&A route. (2) Banks continue to lend out acquisition-related financing like its going out of style. Sure I think this has to slow down, but I thought that a year ago. (3) M&A valuations continue to rise, in large part due to the aforementioned lending environment. This turns possible sellers into probable sellers. (4) Finally, strategic buyers have come back in full force. The strategy of hiding cash under corporate mattresses is over.

*** There are two major categories of corporate acquirer: Strategic buyers and private equity firms. Traditionally, strategic buyers are viewed as the more preferable option. Sure you may lose control in both instances, but at least the strategic buyer theoretically is interested in how its new wicket can be utilized, rather than how its books can be recapped in prepatation of subsequent liquidity. Therefore, private equity has largely been viewed as the alternative – largely for companies too messed up to be a likely strategic acquisition target. I think that paradigm has flipped, however, with private equity firms becoming preferred buyers and strategics becoming the new alternative. This isn’t true for VC-backed companies with less than $30 million or $50 million in revenue, but certainly for the larger targets. Credit it to a massive escalation in fund sizes and private equity market publicity.

*** Not everyone is yet sold on the idea that NYSE or Nasdaq floatations are going away for VC-backed companies. The proof, skeptics say, will be in Q1 2006 IPO figures. More on this tomorrow.

*** Many VCs have a decidedly mixed reaction to this outpouring of M&A interest in their companies. And I’m not talking about their obvious preference for IPOs. Instead, there are some concerns that the advent of “reverse auctions” for VC-backed companies could depress M&A valuations in 2006. Charley Lax of Grandbanks Capital introduced me to this concept yesterday. This thesis is that VCs no longer have many public liquidity options, so they must instead tap the M&A market. At the same time, however, strategic buyers are no longer waiting for potential targets to come to them. Instead, they go into the M&A market looking for a specific type of technology that is offered by multiple VC-backed players (how many truly unique offerings do you have in your portfolio? Thought not). They then leverage’ the seller’s market to drive down prices. This gets alleviated if there are enough strategic buyers looking for the same thing at the same time, but the VC tendency to copycat has tipped the scales in the strategics’ favor.
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*** I spoke yesterday with Richard Bressler, the former Viacom and Time Warner exec who recently joined Thomas H. Lee Partners as a managing director and head of its strategic resource group. The full skinny will be in the next issue of Buyouts, but a couple of interesting nuggets. First, Bressler believes that the old media/new media dichotomy is not a terribly useful concept for forward-looking investors. Instead, media companies will have to successfully merge elements of both into future product offerings (yes, you too new media). Speaking of such convergence, Bressler maintains that the strategic rationale for the AOL/Time Warner merger was sound. The mistakes, he says, related to terms and execution. Finally, he has become a seasoned private equity pro after just 10 hours on the job. When I asked about his role in Thomas H. Lee Partners’ reported bid for Knight Ridder, he provided “no comment.

*** Riya didn’t get bought by Google. It got funded by Bay Partners.

*** Yesterday, this space reported that former VSP Capital portfolio company Evil Twin Studios had raised new venture capital. Today, another ex-VSP company is making headlines, with AOL’s announcement that it has acquired video search company Truveo Inc. When VSP began its limited auction for Fund III companies last year, Vince Vannelli wanted both Evil Twin and Truveo, but ultimately agreed to a sealed bidding process whereby he won Evil Twin and VSP partner John Hamm won Truveo. No financial terms of AOL’s acquisition were disclosed.

Top Three

GTech Holding Corp. (NYSE: GTK) reportedly will be bought for $4.2 billion by consortium that includes Italian publishing group De Agostini (lead), Carlyle Group, Goldman Sachs Capital Partners and Providence Equity Partners. GTech is a West Greenwich, R.I.-based gaming technology and services company. www.gtech.com

Made2Manage Systems Inc., an Indianapolis-based provider of enterprise software for manufacturers and distributors, has raised $50 in new private funding that wqill support future acquisitions. The deal includes equity from Thoma Cressey Equity and debt from Harris Nesbitt. Made2Manage was acquired by Battery Ventures in 2003, with both Thoma Cressey and Battery now serving as company shareholders. www.made2manage.com

Zonare Medical Systems Inc., a Mountain View, Calif.–based manufacturer of ultrasound technologies, has raised $30 million in Series F funding led by 3i Group. The company also said that certain existing backers also participated, but did not identify them. Zonare now has raised over $140 million in VC funding since its 1999 inception, from firms like 3i, CB Health Ventures, Draper Fisher Jurvetson, Frazier Healthcare Ventures, Earlybird Venture Capital, Kaiser Permanente Ventures, Merrill Lynch, Mosaix Ventures, Montagu Newhall Associates, Sciens Capital Partners and Siemens Venture Capital. www.zonare.com

VC Deals

EraGen Biosciences Inc., a Madison, Wis.-based biotech company focused on automating molecular diagnostics, has raised $12 million in additional Series A funding. First Analysis Corp. and Prolog Ventures co-led the deal, and were joined by Stonehenge Capital, unnamed Midwestern backers and returning shareholder Novartis Venture Fund. The company raised a $9.08 million first tranche last October. www.eragen.com

BazaarVoice Inc., an Austin, Texas–based provider of brand-building solutions, has raised $4 million in Series A funding. Austin Ventures led the deal, and was joined by entrepreneurs like Josh Kopelman (founder of Half.com), Julie Constantin (co-founder of Constantin Partners), Jamie Crouthamel (founder and former CEO of Performics), David Reibstein (co-founder of BizRate) and Eric Simone (founder of Compete, which was acquired by Perficient). www.bazaarvoice.com

iBloks Inc., a San Francisco–based provider of personalized online media and entertainment solutions, has raised $500,000 in angel funding from: Michael Ostin, former Warner Music and Dreamworks executive; Freddy DeMann, founding partner of Maverick Recording Co.; and Maurice Marciano, founder of Guess? www.ibloks.com

Objectworld Communications Corp., an Ottowa-based provider of business communications software for the Microsoft-based IT environment, has raised Cdn$6.5 million in second-round funding. Growthworks Canadian Fund led the deal, and was joined by return backer Latitude Partners and company founders David Levy and David Schenkel. www.objectworld.com

QuIC Financial Technologies Inc., a Vancouver, Canada-based provider of enterprise risk management and financial analytics solutions, has raised US$10 million in Series B funding. JMI Equity led the deal, and was joined by Ventures West, GrowthWorks and Springbank. www.quic.com

MailFrontier Inc., a Palo Alto, Calif.-based provider of email security solutions, has raised $1.5 million in Series C-1 funding, according to a regulatory filing. Backers include New Enterprise Associates, Menlo Ventures and Draper Fisher Jurvetson. The company has raised $16.5 million in total VC funding since its 2002 inception. www.mailfrontier.com

Scalix Corp., a San Mateo, Calif.-based provider of an enterprise messaging platform for Linux, has secured $6 million of a $6.8 million Series B round, according to a regulatory filing. Return backers include Mayfield, Mohr, Davidow Ventures and New Enterprise Associates. The company now has raised over $25 million in total VC funding since its 2002 inception. www.scalix.com

Code Green Networks Inc., a Sunnyvale, Calif.-based provider of content security systems, has raised $15 million in Series C funding, according to a regulatory filing. Sierra Ventures led the deal and was joined by return backer Bay Partners. www.codegreennetworks.com

Nanocast Labs Inc., a San Mateo, Calif. startup, has secured $2.65 million of a $3.17 million Series A funding round led by ComVentures, according to a regulatory filing. ComVentures operating partner Keyur Patel is involved with the company. www.comventures.com

Tioga Pharmaceuticals Inc., a San Diego-based drug company focused on gastrointestinal diseases, has raised $24 million in Series A funding. Forward Ventures led the deal, and was joined by New Leaf Venture Partners and BB Biotech Ventures. www.forwardventures.com

Buyout Deals

 

Nautic Partners has sold CDRY Holdings Inc. to The Home Depot (NYSE: HD). No financial terms were disclosed. CDRY is a Logan, Utah–based franchisor of carpet and upholstery cleaning businesses, and was acquired by Nautic in 2002. www.chemdry.com

GFI Energy Ventures has acquired a majority interest in GT Equipment Technologies Inc., a Merrimack, N.H.–based provider of turnkey manufacturing lines for wafers, cells and solar modules. No financial terms were disclosed. www.gfienergy.com www.gtequipment.com

Westlake Hardware Inc., a Lenexa, Kansas-based Ace Hardware dealer, has received an undisclosed amount of private equity funding from Goldner Hawn Johnson & Morrison. Goldsmith Agio Helms advised Westlake on the deal. www.westlakes.com www.ghjm.com

Hellenic Casinos Co. has agreed to sell its 51.57% stake in Hyatt Regency Hotels & Tourism SA to BC Partners for approximately 476 million euros (or 11 euros per share). News reports suggest that BC Partners then will try to buy the remaining 48.43% stake via a public-to-private buyout.

PE-Backed IPOs

 

Smart Modular Technologies (WWH) Inc., a Fremont, Calif.-based provider of memory modules, memory cards and communications products, has set its proposed IPO terms to around 20.45 million ordinary shares being offered at between $10 and $12 per share. It plans to trade on the Nasdaq under ticker symbol SMOD, with Citigroup, JPMorgan and Lehman Brothers serving as lead underwriters. Significant shareholders include Texas Pacific Group, Francisco Partners and Shah Capital Partners. www.smartm.com

Iomai Corp., a Gaithersburg, Md.-based developer of vaccines and immuno-stimulants delivered to the skin, has set its proposed IPO terms to 6.25 million common shares being offered at between $11 and $13 per share. It plans to trade on the Nasdaq under ticker symbol IOMI, with UBS and SG Cowen serving as lead underwriters. Iomai has raised over $65 million in VC funding, from firms like New Enterprise Associates, Essex Woodlands Health Ventures, MedImmune Ventures, Domain Associates, Technology Partners and ProQuest. www.iomai.com

Firm & Fund News

 

Fifth Street Capital has closed its second mezzanine fund with $157 million in capital commitments. Approximately 7% came from firm principals, while outside limited partners include DuPont Capital Management, Sumitomo Mitsui Banking Corp., Bruce Toll, GKM Capital Inc., Diaco Investments, Sterling Stamos Capital Management and WP Global Partners Inc. www.fifthstreetcap.com

Mid Europa Partners (fka EMP Europe) has closed its second fund with 650 million euros in committed capital. The firm will continue its focus on opportunities in Central Europe. www.mideuropa.com

Orchid Asia Group Management has closed its third fund with more than $180 million in capital commitments. The firm focuses on venture capital opportunities in China, and has offices in Hong Kong, Shanghai and San Francisco. www.orchidasia.com

Lincoln Partners of Chicago and Peters Associates of Frankfurt, Germany have merged with a group of corporate finance professionals in France to form Lincoln International. The new firm will provide M&A and private capital-raising services to mid-market companies. www.lincolninternational.com

Genesis Partners, an Israel-based VC firm, has secured over $156 million in capital commitments for its third fund, according to a regulatory filing. Limited partners include AlpInvest and Caisse de Depot et Placement du Quebec. www.genesisvp.com

Bison Capital Asset Management of Santa Monica, Calif. has opened a second office in Charlotte, North Carolina. It will be run by Louis Bissette, a partner who joined Bison last summer after 12 years with Brentwood Associates. www.bisoncapital.com

Gilde Investment Management is planning to raise 125 million euros for its second healthcare-focused venture fund, according to Dow Jones. The firm recently spun out of Rabobank, but says that its former parent will serve as the new fund’s largest limited partner. Telefonica SA’s pension fund also has made a commitment. www.gilde.nl

Evercore Asset Management has been formed by Evercore Partners and a quartet of former Sanford C. Bernstein & Co. colleagues (Greg Sawers, Andrew Moloff, Gail Landis and Margot Nones). The new institutional investment management firm will offer concentrated small- and mid-cap value equity products, pending SEC approval. www.evercore.com

Human Resources

 

Naser Partovi has joined SKY MobileMedia Inc., a San Diego-based wireless applications software platform provider, as president and CEO. He previously served as a managing director with Enterprise Partners Venture Capital. EPVC is SKY MobileMedia’s primary venture capital backer. www.skymobilemedia.com

Stroock & Stroock & Lavan LLP has named 10 new special counsel, including: Robert Guazzo (Corporate, New York) and Harold Olsen (Financial Restructuring, New York). www.stroock.com

Sergio Levi has joined Quester as an investment director. He previously was with ON Semiconductor Corp. as vice president of Europe, Middle East and Africa. www.quester.co.uk

Stephanie Spong has joined Wasatch Venture Fund as a principal and head of the firm’s New Mexico office. She previously served as a principal for Greystone Management Consulting. www.wasatchvc.com

Battelle Ventures has promoted senior associates Ralph Taylor-Smith and Tracy Warren to the position of principal. They also now are principals in the firm’s Innovation Valley Partners affiliate. www.battelleventures.com

Adveq, a Zurich-based fund-of-funds manager, has promoted Rainer Ender and Tom Eriksson to managing director and Nils Rode to executive director. www.adveq.com

Wednesday Warblings

They sky is gray, Doc Rivers still deserves a firing and I’m just now realizing how packed my travel schedule is for the rest of January (North Carolina, Philly, Pittsburgh and London). In other words, it’s time for some Wednesday Warblings.

Let’s begin with the Ohio Bureau of Workers’ Compensation disclosure mess. Specifically, there were lots of emails related to last Friday’s discovery that OBWC had asked GPs for new copies of lost documentation like LP subscription agreements. I felt this type of disarray was further proof that OBWC was probably the dumbest of all dumb money, and that GPs would be reticent to send in such documents while the disclosure issue was still up in the air. Larry writes: “Whoa boy.You are getting a little carried away. Trust me, there are lots of LPs that couldn’t put their hands on original subscription docs, LP agreements let alone side letters. GPs have no right to refuse this information as it relates to the investment in their fund and I assume they intend to hold OBW to its commitment. I agree OBW is acting outrageously regarding disclosure — but this request is quite legitimate. I think you damage your credibility when you make mountains out of molehills.

Regular respondent Philip chimes in: “Depending on the original agreement, they may have to grant the request whether they want to or not. I would suggest that even if the document does not require the document to be sent that the GP should at least send the portion of the document that covers confidentiality. As to the second part, yes I can imagine an institution losing documents affiliated with multi-million dollar investments. I worked for a large institution for almost 15 years. On more then one occasion, I had to get replacements because the original documents could not be found. Although the investments may be for millions of dollars, the people doing the filing were frequently paid only slightly above the minimum wage. I can only imagine what the files would have looked like after large-scale investigation of all the investments by an outside firm.

Finally there is Declan, who asks: “Sure Monica really appreciates being quoted without her permission? If she had meant the email to you she would havesentit to you.” Indeed it would have been easier had Monica sent it to me, but governmental organizations rarely send reporters memos that explicitly declare their own incompetence. If you’d prefer no more reporting of confidential letters, this might be the wrong publication to read.

Adam writes more generally on OBWC: “An observation here is the obvious learning curve and access issues when starting a private equity program. I wonder if OBWC could have done better by committing to an established fund-of-funds manager earlier and who would have steered the pension dollars towards some stronger performing funds in early 2000. Second, it is not really fair that Lexington Partners (predominately a secondary FoF) gets compared to HarbourVest (true FoF with a secondary component). A secondary fund will have a higher IRR because the assets they acquire are more mature and do not suffer from the J-Curve like a HVP fund would.

*** Moving on, a few comments on the concept of “reverse auctions.” S writes: “I don’t buy into the concept that strategics could develop a‘reverse auction’ market for VC-backed companies. In my experience (having served in a BizDev function for a Fortune5 company and in private practice representing VC/PE funds), the number of strategics looking for great technology always exceeds the number of VC-backed portfolio companies hawking same. Any price depression that results from the narrowingof the IPO window and the greater dependence on the M&A door probably results from the increased sophistication among the pool of purchasers.

Ronald takes a more charitable view: “The idea of reverse auctions is completely industry-dependent. You’re not, for example, going to see it in retail or manufacturing. But it makes sense for VC-backed tech, which is what I assume Lax was talking about. I don’t think it’s there yet, but there have been a lot of second, third, fourth and even fifth movers in the tech space lately, particularly in terms of Web 2.0.

Top Three

CVC Capital Partners is leading a 1.4 billion euros buyout of Dutch waste management company AVR, according to multiple press reports. CVC would own 50% of AVR following the deal’s completion, with KKR and Oranje-Nassau Groep each owning 25 percent.

The Column Group LP is looking to raise upwards of $500 million for its inaugural healthcare/biotech VC fund, according to a regulatory filing. The Seattle Times reports that Column Group is formed by Richard Klausner, former executive director of the Bill & Melinda Gates Foundation’s global health program and onetime director of the National Cancer Institute. His partners are former Three Kings Capital managers Peter Svennilson and Harald Ekman.

Mywavez Corp., a Menlo Park, Calif.-based developer of mobile video-sharing solutions, has raised $3.04 million in Series A funding led by Menlo Ventures. www.mywavez.com

 

VC Deals

ESpot Runner Inc., a Los Angeles–based ad agency focused on enabling local businesses to advertise on television, has raised $10 million in Series A funding. Index Ventures and Battery Ventures co-led the deal, and were joined by Comerica Bank and others. www.spotrunner.com

SilverStorm Technologies Inc., a King of Prussia, Pa.-based provider of interconnect solutions for clustered computing, has raised $13 million in new VC funding. Core Capital Partners led the deal, and was joined by Axiom Venture Partners and return backers Bay Partners and Castile Ventures Partners. www.silverstorm.com

Pure Networks Inc., a Seattle-based provider of home networking software and services, has raised $12.5 million in new venture capital. Return backers include Bessemer Venture Partners, Ignition Partners and Mayfield. The company has raised $30.5 million in total VC funding. www.purenetworks.com

Cybera Inc., a Nashville, Tenn.-based provider of broadband wide area network solutions to multi-location businesses, has raised $12.8 million in new VC funding. Adams Street Partners led the deal, and was joined by Chrysalis Ventures, Claritas Capital and several prior Cybera investors.

ThePlatform Inc., a Seattle-based provider of digital media publishing solutions, has raised $8 million in Series B funding, according to a regulatory filing. Backers include Spark Capital, Generation Capital Partners and Sun Microsystems. www.theplatform.com

Syntricity Inc., a San Diego-based provider of enterprise yield management software for the semiconductor industry, has raised $5.8 million in Series B funding. Windward Ventures led the deal, and was joined by GKM Ventures and Osprey Ventures. www.syntricity.com

Newmerix Corp., a Superior, Colo.-based provider of automated testing and change management software for packaged applications, has raised $5 million in additional Series B financing. Siemens Venture Capital led the deal, and was joined by return backers Mobius Venture Capital and IDG Ventures. The Series B round total now stands at $12 million. www.newmerix.com

Axela Biosensors Inc., a Toronto-based developer of biosensors, has completed an exclusive in-licensing agreement with Kimberly-Clark (NYSE: KMB). The agreement includes exclusive rights to approximately 150 world-wide patents and applications, as well as transfer of significant immunodiagnostics assay technology. As part of the agreement, Kimberly-Clark also will be acquiring an equity interest in Axela. Other Axela shareholders include Primaxis Technology Ventures and Vengrowth. www.alexabiosensors.com

Buyout Deals

 

J.W. Childs & Associates has acquired a majority interest in WS Packaging Group Inc. of Algoma, Wisconsin from shareholders like Brantley Partners. No financial terms were disclosed. www.wspackaging.com

Dave & Buster’s Inc. (NYSE: DAB) will hold a special shareholders meeting on January 18, in order to vote on the proposed $18.05 per share buyout by Wellspring Capital Management. www.daveandbusters.com

Forming Technologies Inc. of Royal Oak, Mich. has agreed to acquire the North American forging operations of Metaldyne Corp. No financial terms were disclosed for the transaction, which is expected to close later this quarter. Forming Technologies was recently founded by GR Investment Group and Jacobson Partners, while Metaldyne is controlled by Heartland Industrial Partners.

Accel-KKR and Teachers’ Private Capital have completed their sale of Alias to Autodesk Inc. (Nasdaq: ADSK) for $197 million in cash.

PE-Backed IPOs

 

Altus Pharmaceuticals Inc., a Cambridge, Mass.-based drug company focused on protein therapeutics for chronic gastrointestinal and metabolic disorders, has set its proposed IPO terms to six million common shares being offered at between $14 and $16 per share. It plans to trade on the Nasdaq under ticker symbol ALTU, with Merrill Lynch and Morgan Stanley serving as lead underwriters. It has raised over $100 million in total VC funding, including a $51 million Series C infusion in 2004 at a post-money valuation of approximately $121 million. Backers include Warburg Pincus, U.S. Venture Partners, Vertex Pharmaceuticals, Nomura, CMEA Ventures, China Industrial Bank and BankInvest. www.altus.com

PE-Related M&A

 

GeoTrust Inc., a Wellesley Hills, Mass.–based provider of identity verification solutions for e-businesses, has acquired TC TrustCenter, a Germany-based provider of smartcard solutions. No financial terms were disclosed. GeoTrust has raised around $45 million in VC funding since its 1998 inception, from firms like Castile Ventures, St. Paul Venture Capital, Prism Venture Partners and WI Harper Group. www.geotrust.com

CancerVax Corp. (Nasdaq: CNVX) has agreed to merge with Micromet AG, a Germany-based antibody developer. The total deal is valued at around $126.7 million, with Micromet shareholders to own approximately 67.5% of the combined company. Micromet shareholders include 3i Group, Abingworth, Advent Venture Partners, DG Lux Lacuna Apo Biotech, HBM BioVentures, IBT, Omega Fund, Permira, SV Life Sciences and The Wellcome Trust. www.cancervax.com www.micromet.de

Bayer AG said that its Bayer Innovation GmbH subsidiary has acquired Icon Genetics AG, a Munich, Germany-based agricultural biotech company. No financial terms were disclosed. Icon Genetics has raised a small amount of VC funding from firms like Audax Group. www.bayer.com www.icongenetics.com

Firm & Fund News

 

RCP Advisors has closed its third leveraged buyout fund-of-funds with $225 million in capital commitments. www.rcpadvisors.com

Conor Venture Partners Oy of Finland has held a 16 million euros for its inaugural fund. The firm will focus on early-stage IT opportunities. www.conor.vc

Stata Venture Partners of Dover, Mass. has received $101 million in capital commitments for its second fund, according to a regulatory filing.

Brantley Partners of Beachwood, Ohio is planning to raise upwards of $250 million for its fifth middle-market buyout fund. www.brantleypartners.com

Human Resources

 

Black Diamond Capital Management has promoted Mounir Nahas to senior managing director and chief operating officer. Prior to joining Black Diamond in March 2004, Nahas was a managing director with JPMorgan Partners.

CapitalSource Inc. (NYSE: CSE) has promoted Dean Graham to president and chief operating officer. Former president and CapitalSource co-founder Jason Fish will become vice chairman and CIO, while Keith Rubin and James Pieczynski have been named co-presidents of its healthcare and specialty finance business. www.capitalsource.com

David Lazar has joined Ryan Beck & Co. as a managing director of I-banking. He previously served as senior executive vice president and head of I-banking with Boenning & Scattergood Inc. www.ryanbeck.com

Peter Barris, a managing general partner of New Enterprise Associates, has joined the board of InnerWorkings, a Chicago-based enterprise print management and business process outsourcing company. www.innerworkings.com

Scott Cantini has joined Morgan Joseph & Co. as a managing director of I-banking. He most recently was a partner with America’s Growth Capital, and has served as a senior member of the private equity groups within both SG Cowen and Smith Barney. www.morganjoseph.com

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Correction: The Carlyle Group is not involved in the deal for GTech Holding Corp.

Think Locally, Act Globally

Ohio used to insist that its publicly-sponsored pension and insurance systems only make private equity commitments to funds located in-state. It was called the Ohio Only program, and was designed not only to stimulate local economic development, but also to make sure that state resources were not used to stimulate someone else’s economic development (read: California or Massachusetts). But it was a failure, due to its intentional disregard for portfolio diversification. So the program was disbanded in 1997, at which point publicly-sponsored systems were instead told to give preference to Ohio-based funds only if all other things were equal (note: all other things are never equal).

One year later, the Ohio Bureau of Workers’ Compensation began making private equity fund investments. It backed firms from coast to coast (albeit not outside U.S. borders), but nonetheless showed a proclivity to believe all things were equal. Of its 68 general partnerships, 21 were based in-state. Now, part of this artificial allocation is understandable, since local GPs would have an easier time getting that first meeting than would an out-of-state fund (perhaps a local official even made a few introductory calls, but we wouldn’t know that from what Ennis Knupp asked). But 30% is a very high in-state figure for a place like Ohio — which, let’s face it, isn’t a private equity hub like California, Massachusetts or New York.

The reason I bring this up is that OBWC’s in-state investments severely depressed the value of its overall portfolio. What follows are some numbers from the statistically-challenged Ennis Knupp report, but bear with me as I’ll assume that the positive and negative mistakes sort of balanced each other out. The overall portfolio on March 31, 2005 featured a net annualized IRR of 3.18 percent. This is actually pretty decent for the 1998-2005 timeframe, which probably explains why so many secondary firms are eagerly anticipating their chance to bid. What is disappointing, however, is how much better the returns could have been if OBWC had not given such weight to in-state commitments.

The report shows that 19 of the 21 in-state funds had called down capital as of March 31, 2005. Of these 19, the average net annualized IRR was -17.13 percent. And remember, this miserable figure already was factored into the aforementioned 3.18 percent (which actually would be higher if, say, the Carlyle Partners III figure was corrected). Ditto if you look at dollar gained/loss percentages for called-down capital. The in-state funds clock in at a 10.89% loss, whereas the overall portfolio features a 4.49% gain.

All of this reminds me of a study last year from Harvard Business School professor Josh Lerner. He discovered that one reason for why publicly-sponsored LPs under-perform privately-sponsored LPs was that the former spend far too much of their capital in-state. The best performers, he learned, get out of town.

;The basic pattern people have seen in public stocks has been that there are benefits to localized investing, which is generally attributed to increased knowledge of local companies,” he told me yesterday. “But the private equity realm is the exact opposite… This is a very specific phenomenon mainly among public pension funds and public university endowments… and it’s really even more about investing in the same state as opposed to even investing in the same region.

What is troubling, of course, is that more and more states keep floating – and sometimes mandating – in-state investment programs. I don’t know of any as draconian as Ohio Only, but you often here about a few hundred million being set aside. It is indeed possible that such programs provide net gains to the state, in terms of added jobs, tax revenue, etc. But it is equally possible that most of those new companies could have been backed by out-of-state VCs. The only certain math we know is that public LPs perform poor poorly the more pressured they are to invest in-state. I can only hope that this Ohio disclosure will reinforce the point to other state legislatures and governors who are inclined to provide such pressure.

*** Lexington Partners won the auction for Boeing’s VC fund assets last year. Probitas Partners agented the transaction. No comments provided by any involved parties.

*** Quadrangle Group has closed its second fund with around $1.8 billion in capital commitments. The final close took place just before year-end, and was first reported by my colleague Mark Cecil over at Buyouts Magazine.

*** I’m off to North Carolina for the next few days, with Adam Reinebach filling in tomorrow. I’ll return on Tuesday (we’re off Monday for MLK Day). Let’s talk then… Go Pats!

Top Three

Supernus Pharmaceuticals Inc. of Rockville, Md. has launched by acquiring the product development and formulation assets of Shire Laboratories Inc., a subsidiary of Shire PLC. Supernus is funded by $27.5 million from New Enterprise Associates and OrbiMed Advisors. The deal also is expected to include a $7.5 million second tranche, which is being held for an additional investor. www.supernuspharma.com

Aegerion Pharmaceuticals Inc., a Branford, Conn.-based drug company being incubated by life sciences advisory Scheer & Co., has raised around $22 million in Series A funding, according to a regulatory filing. Backers include Alta Partners, Advent International, Index Ventures and Scheer & Co.

Claude Leglise has joined WI Harper Group as a managing director and head of the firm’s San Francisco office. He previously served as president of Intel Capital, before resigning in April 2004. www.wiharpergroup.com

 

VC Deals

ColorChip, an Israel-based maker of planer light-wave circuit chips and modules for fiber-to-home networks, has raised $9.5 million in new VC funding. Bessemer Venture Partners led the deal, and was joined by Motorola Ventures, European Venture Partners and return backers Eurofund, Polytechnos and Walden Israel. www.color-chip.com

PlayFirst Inc., a San Francisco-based video game publisher, has raised $5 million in Series B funding. Rustic Canyon Partners led the deal, and was joined by return backers Mayfield and Trinity Ventures. www.playfirst.com

Appear Networks, a Sweden-based provider of wireless communication platforms, has raised 6 million euros in Series B funding. Northzone Ventures led the deal, and was joined by return backers Remote Reward and Tenal. www.appearnetworks.com

Carbylan Biosurgery Inc. (f.k.a. Sentrx Surgical), a Palo Alto, Calif.-based medical device startup focused on scar-free healing and wound repair, has raised $7.75 million in Series A funding, according to a regulatory filing. InterWest Partners and Alta Partners are listed as beneficial owners.

TerraCotta Inc., a San Francisco-based provider of solutions to Java scalability issues, has raised $13.5 million in Series C funding, according to a regulatory filing. Goldman Sachs was joined on the deal by return backers Accel Partners and Benchmark Capital. www.terracottatech.com

Intechra Holding Corp.,a Carrolton, Texas-based IT asset disposition company, has raised $12 million in third-round funding. Richland Ventures led the deal, and was joined by return backers Chrysalis Ventures and Clayton Associates. www.intechra.com

IntelliVid Inc., a Cambridge, Mass.-based provider of video analysis solutions for retail loss prevention, has raised $8 million in Series B funding. Backers include Intel Capital, Egan-Managed Capital and Flagship Ventures. www.intellivid.com

The Guild Inc., a Madison, Wis.-based online retailer of original art and fine crafts, has raised $7 million in venture capital from San Francisco Equity Partners and Dolphin Equity Partners. www.guild.com

TomoTherapy Inc., a Madison, Wis.-based developer of cancer treatment systems that use on-board CT imaging and conformal radiatiation therapy, has raised $14 million in Series E funding. Return backers included The Endeavors Group, Open Prairie Ventures, State of Wisconsin Investment Board, Advantage Capital Wisconsin Partners and Ascension Health Ventures. The company has raised around $42 million in total VC funding. www.tomotherapy.com

Buyout Deals

 

Francisco Partners has completed its acquisition of FrontRange Solutions Inc. for approximately $200 million. FrontRange is a Dublin, Calif.–based provider of service management, CRM and voice application solutions for small-to-medium sized enterprise and distributed enterprise markets. In conjunction with the buyout, FrontRange has been delisted from the stock exchange in Johannesburg, South Africa. www.frontrange.com www.franciscopartners.com

The Riverside Co. has acquired Thibaut Inc., a Newark, N.J.–based wallpaper company serving the high-end residential redecorating and remodeling market. No financial terms were disclosed, except that Thibaut has less than $3 million in EBITDA. www.riversidecompany.com www.thibautdesign.com

C/G Electrodes LLC, a St. Marys Pa.-based manufacturer of graphite electrodes, has completed a recapitalization. The deal was partially backed by $7.5v million in subordinated notes from Key Principal Partners, and represented an exit for minority shareholders like Eureka Growth Capital.

Toys ‘R’ Us is planning to sell a Gbp356 million UK commercial real estate bond next week, according to Reuters. The company was acquired last year by Bain Capital, KKR and Vornado Realty Trust. Barclays Capital and Deutsche Bank are the lead managers.

PE-Backed IPOs

 

Techwell Inc., a San Jose, Calif.-based fabless semiconductor company, has filed to raise $86.25 million via an IPO of common stock. It plans to trade on the Nasdaq under ticker symbol TWLL, with Lehman Brothers serving as sole book-running manager. Techwell raised $20 million in VC funding from Technology Crossover Ventures in 2003. www.techwell.com

Regency Energy Partners LP of Dallas, Texas has set its proposed IPO terms to 12.5 million common units being offered at between $19 and $21 per unit. Lehman Brothers and UBS are serving as lead underwriters. Regency is a Delaware limited partnership recently formed by Hicks, Muse, Tate & Furst to capitalize on opportunities in the midstream sector of the natural gas industry.

QinetiQ PLC, a UK-based defense research firm, is moving ahead with a February IPO that would value the company at approximately Gbp1 billion. The Carlyle Group bought a 31% stake in the company in 2003 from the UK Ministry of Defense, with the Ministry holding the remaining position. www.qinetiq.com

PE-Related M&A

 

Becton, Dickinson & Co. (NYSE: BDX) has agreed to acquire GeneOhm Sciences Inc., a San Diego-based developer of nucleic-acid based diagnostic solutions for the detection of infectious microorganisms. The deal reportedly is valued at $230 million, plus the possibility of an additional $25 million in earn-outs. GeneOhm has raised over $38 million in total VC funding, from firms like Domain Associates, CHL Medical Partners, CB Health Ventures, QuestMark Partners and Kaiser Permanente Ventures. www.geneohm.com

Sage Group PLC (LSE: SGE) has acquired Verus Financial Management, a Nashville, Tenn.-based payment processing company. The deal is valued at $325 million in cash, with Financial Technology Partners serving as exclusive advisor to Verus. Verus had raised over $20 million in VC funding from FT Ventures. www.verusfin.com

Connetics Corp. (Nasdaq: CNCT) has agreed to acquire the sales organization of PediaMed Pharmaceuticals Inc., a Florence, Ky.-based pediatric drug company. The deal is valued at $12.5 million in cash, and is expected to close on January 31. PediaMed has raised around $32 million in VC funding from Essex Woodlands Health Ventures, Child Healt Inv*stment Co., Blue Chip Venture Co. and Union Springs. www.connetics.com www.pediamedpharma.com

Firm & Fund News

 

Mason Wells of Milwaukee has closed its second buyout fund with $300 million in capital commitments. www.masonwells.com

The Riverside Co. is raising upwards of $280.25 million for its third European buyout fund, according to a regulatory filing. It already has nearly $20 million in commitments from limited partners like Mass Mutual Life Insurance and Spelman College. www.riversidecompany.com

BankCap Partners, a Dallas-based private equity firm, is looking to raise $200 million for its inaugural fund. It will focus on newly-chartered banks in the middle-market commercial banking sector. www.bankcap.com

Mourant, a third-party fund administrator, has moved to the 15^th Floor of 250 West 57^th in New York. www.mourant.com

Human Resources

 

Tony Melman as resigned as a managing director with Onex Corp., but will continue to serve as a special advisor on strategic acquisitions. Melman has been with Onex nearly since its inception. www.onexcorp.com

Ted Driscoll and Steve Elefant have joined Claremont Creeek Ventures as venture partners. Driscoll previously served as a special limited partner with Novus Ventures and as managing director of Sand Hill Angels, while Elefant has co-founded such companies as ICVerify Inc. and PriceRadar Inc. (sold to eBay in 2001). Claremont Creek also has added Brad Webb as a special limited partner and Paul Straub as an associate. www.claremontvc.com

Valhalla Partners has promoted both Scott Frederick and Charles Curran to the position if general partner. Frederick was a firm co-founder, and previously served as a partner with FBR Technology Venture Partners. Curran joined Valhalla shortly after its inception, and previously had been a partner with Saturn Venture Partners and, before that, an associate with New Enterprise Associates. www.valhallapartners.com

Mike Minars has joined Millennium Technology Ventures as chief financial officer. He previously served as controller of RRE Ventures. www.mtvlp.com

Terence Tan has joined Beijing-based Infotech Ventures Co. as a general partner, according to VentureWire. He previously was a founding partner with Worldview Technology Partners.

It’s Internship Drive Time

I ran into an old high school friend on Saturday afternoon, while exiting the Dean Dome after UNC’s underwhelming performance against Miami (“Today, the part of Roy Williams will be played by Doc Rivers”). He’s a soon-to-be business school grad looking for private equity work in London, and I said that he should let me know if he could use any help with introductions. Upon further reflection, I realized that I usually make a similar offer to all first-year b-schoolers looking for summer intern placements. So, without further ado, I am pleased to announce the launch of our 3^rd Annual Internship Drive.

The way this works is that private equity firms are urged to contact me via email if you’re looking for a summer intern from the current crop of first-year MBA candidates. All types of firms need apply, and ditto for geography. In your emails, please include your firm name, job location and type of business (i.e., VC/LBO/etc.). Don’t worry, your firm name will be kept confidential, with the job listing looking like:

• Early-stage VC firm withhealthcare focus, New York City

The listings will be posted in an upcoming edition of the PE Week Wire, and each respondent will be directed to an anonymous Yahoo email account that I’ll set up for each firm. So please get me your information as soon as possible. Last year, over 50 firms hired summer interns through PE Week Wire efforts, and there’s no reason you shouldn’t join them. So, again, get those emails of interest in to me so that we can post the internship listings ASAP.

(Note to b-schoolers: Please do not send me CVs, letters or other correspondence related to your potential candidacy. I’ll let you know where, and when, it can be sent. I apologize to all the second-years also looking for work, but this is a first-year-only sort of thing.)

*** Thomson Venture Economics and the National Venture Capital Association have released 2005 VC fund-raising data. Overall, 182 U.S.-based firms netted $25.2 billion, which is the highest yearly total since 309 funds grabbed $38 billion in 2001. The largest VC fund-raiser was Technology Crossover Ventures.

*** Constance Loizos of PE Week reports that Bill Burnham is no longer a part of the Celsius Capital effort.

*** ABRY Partners and Providence Equity Partners last Thursday appeared in a Delaware courtroom to argue the demerits/merits of Providence’s motion to dismiss ABRY’s suit against it. A judge is expected to issue a decision within the next three to four weeks.

*** Quiz Answer: I asked which bank-sponsored private equity firm was opening up its latest fund-raising effort to outside investors. The answer is two-fold: Key Principal Partners and Key Venture Partners.

*** Just a quick reminder that I’ll be in Philly on Friday for the Wharton Private Equity Conference. My panel is titled “Partnering with Entrepreneurs,” and will include folks from Spectrum, Warburg Pincus, Charlesbank Capital, Apprise Media, Rib-X Pharmaceuticals and Grain Systems Inc. Our main discussion will be about the buy-side and sell-side challenges when entrepreneurs sell to PE firms for the first time. I’ve obviously got a list of questions ready, but feel free to send in any issues you feel should be discussed…

Top Three

VNU NV(ASE: VNU) has received an $8.8 billion buyout offer from a private equity consortium that includes AlpInvest, Blackstone Group, The Carlyle Group, Hellman & Friedman, KKR, Permira and Thomas H. Lee Partners. www.vnu.com

FyreStorm Inc., a Sunnyvale, Calif.-based fabless semiconductor company delivering power conversion and power management solutions for mobile device manufacturers, has raised $25 million in Series C funding. Worldview Technology Partners led the deal, and was joined by return backers ComVentures, TPG Ventures, Telos Venture Partners, Sunrise Capital and Western Technology Investment. www.fstorm.com

Hellman & Friedmanand Zurich Financial Services Group have mutually agreed to terminate H&F’s proposed $1.1 billion acquisition of Universal Underwriters Group from Zurich. The deal was announced last April, but a message on Zurich’s website says that the two sides were “unable to complete the transaction at mutually agreeable terms.” Other expected equity sponsors of the deal included Farallon Capital Management, GIC Special Inv*stments and Universal Underwriter management. Universal Underwriters is an Overland Park, Kansas–based provider of property and casualty insurance to U.S. franchised automotive dealerships. www.UniversalUnderwriters.com www.hf.com

VC Deals

OnVantage Inc., a Santa Clara, Calif.-based provider of corporate spend management and supplier marketing technology for the professional meetings and events market, has raised $18 million in Series B funding. Norwest Venture Partners and TPG Ventures co-led the deal, and were joined by return backers Draper Fisher Jurvetson, iD Ventures (f.k.a. Acer Technology Ventures) and MHM & Co. www.onvantage.com

Aptela Inc., a McLean, Ca.–based VoIP company, has raised $5 million in Series A funding led by JMI Equity. The deal also includes an investor option to invest an additional $3 million. www.aptela.com

CoLucid Pharmaceuticals Inc., an Indianapolis-based drug company focused on neurological diseases, has raised $16.5 million in Series A funding. Domain Associates and Pappas Ventures co-led the deal, and were joined by Triathlon Medical Ventures and Pearl Street Venture Funds. The company was formed with a novel clinical stage migraine molecule licensed from Eli Lilly and Co., and was seeded by Pappas Ventures.

Seattle BioFuels Inc., a Seattle-based developer of biodiesel process technology, has raised $7.5 million in Series A funding. Backers include Nth Power, Technology Partners and Vulcan Capital. www.seattlefuels.com

Ocera Therapeutics Inc., a San Diego-based drug startup focused on gastrointestinal and liver diseases, has raised $15.5 million in Series A funding co-led by Domain Associates and Thomas, McNerney & Partners. www.coeratherapeutics.com

3VR Security Inc., a San Francisco-based of intelligent video management solutions, has raised $10 million in Series B funding. Kleiner Perkins Caulfield & Byers led the deal, and was joined by In-Q-Tel and return backer VantagePoint Venture Partners. www.3vr.com

Fusepoint Managed Services Inc., a Toronto-based provider of outsourced IT services and infrastructure, has raised US$9 million in new VC funding from Western Technology Investment. www.fusepoint.com

Spotwave Wireless Inc., an Ottawa-based provider of indoor wireless coverage products, has raised US$10 million in Series A-2 funding. Motorola Ventures was joined by return backers Newbury Ventures, VenGrowth Private Equity Partners, Primaxis Technology Ventures, VentureLink Fund, GrowthWorks and RBQ Ltd. www.spotwave.com

Agitar Software Inc., a Mountain View, calif.-based provider of enterprise software testing tools, has raised $10 million in Series C funding. Globespan Capital led the deal, and was joined by return backers Sequoia Capital and New Enterprise Associates. www.agitar.com

Metris, a Belgium-based provider of 3D quality control, has raised 35 million euros in fourth-round funding. GIMV led the deal, and is joined by fellow return backers KBC, Quest for Growth, Toyo and company management. The new capital will be used to support three new acquisitions: LK, 3D Scanners and Arc Second. www.metris.com

ClariFI Inc., a Boca Raton, Fla.–based provider of strategy development products for portfolio managers, has raised $3.5 million in new VC funding from TL Ventures. www.clarifi.com

SKY MobileMedia Inc., a San Diego-based provider of mobile applications software platforms for wireless handsets, has raised $15 million in Series B funding. Sid R. Bass Associates led the deal, and was joined by return backer Enterprise Partners Venture Capital. www.skymobilemedia.com

Pivotal Systems Corp., a Pleasanton, Calif.-based developer of process control solutions for semiconductor manufacturing, has raised $10 million in Series B funding, according to a regulatory filing. Backers include U.S. Venture Partners, Enterprise Partners Venture Capital and ITU Ventures. www.pivotalsys.com

 Yatra Online, an online and centralized travel services company for the India market, has been formed by Norwest Venture Partners, Reliance Capital, Television 18 Group (TV18) and travel industry executives. No financial terms were disclosed. www.yatra.in

Aconite Ltd., a UK-based provider of smart credit card solutions, has raised Gbp338,000 from The Capital Fund. www.aconite.net

OrthoHelix Surgical Designs Inc., an Akron Ohio-based developer of surgical instruments and implants for use in foot, hand, and ankle surgery, has raised “several million dollars” in Series A funding. Mutual Capital Partners of Cleveland led the deal. www.orthohelix.com

Buyout Deals

 

RoundTable Health Partners has agreed to acquire Bioniche Pharma Group Ltd., the Ireland-based sterile injectibles manufacturing subsidiary of Bioniche Life Sciences Inc. (TSX: BNC). The deal includes an immediate payment of $13.25 million in cash, and ultimately could be valued at up to $33 million. It is expected to close later this month. www.roundtablehp.com www.bioniche.com

Waco International Ltd., a South African building services company, has agreed to be acquired for around $900 million by CCMP Capital Asia (f.k.a. JPMorgan Partners Asia) and JPMorgan Partners. www.wacointernational.com

DLJ Growth Capital Partners has agreed to acquire Connecticut School of Broadcasting Inc. and its subsidiaries from founder Dick Robinson. DLJ has partnered on the deal with Brian Stone and Scott Knight, founders and general partners of Knightstone Media (KSM), who will manage CSB upon completion of the acquisition. No financial terms were disclosed. www.800tvradio.com

PE-Backed IPOs

 

TargaCept Inc., a Winston Salem, N.C.-based drug company focused on CNS disorders, has filed to raise $59.8 million via an IPO of common stock. The move comes less than one year after the company pulled an $86.25 million IPO registration due to what it perceived to be poor market conditions for biotech issues. TargaCept has raised over $120 million in VC funding from firms like New Enterprise Associates, Nomura Phase4 Ventures, Advent International, EuclidSr Partners, Burrill & Co., R.J. Reynolds and Oxford Bioscience Partners. www.targacept.com

Linn Energy LLC, a Pittsburgh, Pa.-based natural gas company, priced 11.75 million common units at $21 per unit (high end of $19-$21 range), for an IPO take of approximately $246.75 million. RBC Capital Markets and Lehman Brothers served as lead underwriters, while Quantum Energy Partners was listed as a significant shareholder. www.linnenergy.com

Liquidity Services Inc., a Washington, D.C.-based operator of an online auction marketplace for wholesale, surplus and salvage assets, has set its proposed IPO terms to around 7.69 million common shares being offered at between $9 and $11 per share. It plans to trade on the Nasdaq under ticker symbol LQDT, with Friedman Billings Ramsey and RBC Capital Markets serving as lead underwriters. The company raised around $20 million in VC funding from ABS Capital Partners in late 2004. www.liquidityservicesinc.com

PE-Related M&A

 

The User-Friendly Phone Book, a yellow page directory publisher controlled by VS&A Communications Partners, has acquired the South Coastal Bend and Coastal Bend directories from Texas Directories Company Inc. No financial terms were disclosed for the purchase, which includes directories delivered to over 150,000 residents and businesses around Corpus Christie, Texas. www.ufpb.net www.vss.com

H-Cube LLC, a Dallas, Texas-based business process outsourcing company founded in January 2005 by GTCR Golder Rauner, has acquired Global Realty Outsourcing Inc., a Stamford, Conn.–based BPO specializing in the real estate and mortgage industry. No financial terms were disclosed. www.h-cubeinc.com www.gtcr.com

Motorola Inc. (NYSE: MOT) has agreed to buy Swedish IP-based set-top box provider Kreatel Communications from backers like ABN AMRO Capital, SEB Företagsinvest and Innovationskapital. The deal is valued at around $80.25 million, and is expected to close this quarter. www.motorola.com www.kraetel.com

Argo Interactive Group PLC, a UK-based provider of user experience optimization solutions for mobile services, has agreed to acquire ACTeSys GmbH for $4 million in cash. ACTeSys is a Germany-based provider of hardware solutions for end-to-end testing and monitoring. Argo Interactive is backed by 3i Group and Apax Partners. www.argogroup.com www.actesys.de

Bad News

 

BMK LP, a Carrollton, Texas-based distributor of general merchandise products to grocery and drug chains, has filed for Chapter 7 in U.S. Bankruptcy Court in Wilmington, Delaware. The company had been backed by Sun Capital Partners.

Firm & Fund News

 

Carlyle/Riverstone Global Energy & Power Fund III has secured around $1.45 billion in capital commitments, according to a regulatory filing. The vehicle is being marketed with a max cap of $3.5 billion. www.carlyle.com

Commercial Industrial Finance Corp., a wholesale co-lending partner to financial middle-market company and private equity firms, has been launched by Charlesbank Capital Partners. The company has an initial investment capacity of $400 million, and will be run by founder and CEO Peter Gleysteen, former head of JP Morgan Chase’s syndicated loans business. www.cifc.com

Victory Capital Management, a subsidiary of Keycorp, has acquired hedge fund-of-funds manager Austin Capital Management.

The Minnesota Investment Network Corp. has changed its name to RAIN Source Capital. www.rainsourcecapital.com

Human Resources

 

Circle Peak Capital has promoted John Jonge Poerink to partner and Holbrook Forusz to vice president. www.circlepeakcapital.com

Nicholas Winter has joined real estate developer Millennium Partners as managing director of private equity. He previously worked with both Blue Mountain Capital Group and Ameriquest Capital Group. www.millenniumptrs.com

Faisal Al-Abbasi has joined VCBank as director of private equity and financial advisory. He has previously worked with Unicorn Investment Bank, Kuwait Finance House and Bank of Bahrain and Kuwait. VCBank is an Islamic venture capital I-bank licensed and regulated by the Bahrain Monetary Agency.

John Euers has joined PPM Managers, the UK-based fund-of-funds unit of Prudential, as associate director. He previously was with The Wellcome Trust.

Charles Gassenheimer has joined Ener1 Group as CEO. He will oversee Ener1 Group’s investments, including 11 private and public companies within its private equity division. Gassenheimer previously served as managing director and portfolio manager of both the convertible arbitrage division and private investment group of hedge fund Satellite Asset Management. www.ener1group.com

Arnold Spangler, former managing director of Mancuso & Co., has joined the board of Patient Safety Technologies Inc. (AMEX:PST), replacing outgoing CEO and director Milton “Todd” Ault III. www.patientsafetytechnologies.com

————————-
Correction: News of Quadrangle’s latest fund close was first reported by LBOWire.

Random Ramblings

A few notes as my head aches from the turbine-like drone of industrial dehumidifiers and air circulation devices just outside my home office door (our furnace cracked/flooded part of my house on Sunday, which I attribute directly – and unfairly — to the extended stay of my in-laws).

*** Actually let’s stay on the topic of industrial strength, as it relates to yesterday’s news that Seattle BioFuels raised $7.5 million in Series A funding from Nth Power, Technology Partners and Vulcan Capital (for the uninitiated, go here). On its surface, this seems like a typical VC deal in that it’s for an early-stage company with proprietary next-generation technology and serious CapEx needs. It even has a blog-writing former VC as its CEO (Martin Tobias). But dig a bit deeper and you find the type of old-industry deal to which VCs usually averse. First, it includes all sorts of project finance issues that are foreign to most venture investors (signing a lease is typically the extent of VC real estate activity). Second, it’s business model is based on the concept local production and local distribution, which means that geographic expansion of its customer base can only occur once a new facility is built (i.e., far longer time-to-new-markets than a software or medical device company).

So how do we reconcile the fact that a trio of venture firms basically did an industrial-strength deal? It would be easy to look at the specific players – particularly Nth Power – and just chalk it up to the niche vagaries of energy-focused VCs. But this would be wrong, as it ignores the fact that several firms without energy or clean-tech practices were seriously interested in this deal. Instead, I’d like to suggest that the venture industry is very slowly losing its anti-industry bias, just like the buyouts industry is losing its anti-technology bias.

Venture firms understand that biofuel and other renewable energy sources present a huge market opportunity in both the commercial and consumer markets, particularly with fluctuations in gas prices and continuing government incentives. What they’ve struggled with, however, is how to get a scalable piece of the action. The most common answer so far has been to support platform companies — like U.S Renewables (Rustic Canyon) or New Energy Capital (VantagePoint) – but I’d expect a bunch of direct deals like Seattle Biofuels to be coming down the pipe shortly. VC firms need is to stop looking so much at appearances (does it “look” like a VC deal?) and to focus more on potential returns. And I believe they will.

*** Quiz Time: Can you name the next corporation to bail on its venture capital effort? Hint: It’s sort-of like running a train.

*** I just got a press release about Bain Capital buying Burlington Coat Factory for $2.06 billion.

*** We’ve got 19 firms so far for our next Internship Drive, but I’m hoping for a few more. Please send me emails as soon as possible. The Drive is tentatively scheduled for next Tuesday.

Top Three

 

Archus Orthopedics Inc., a Redmond, Wash.-based developer of reconstructive implants to treat a variety of spine disorders, has raised $35 million in Series C funding. Johnson & Johnson Development Corp. led the deal, in cooperation with DePuy Spine. Return backers include MPM Capital, InterWest Partners and Polaris Venture Partners. www.archususa.com

Thoma Cressey Equity Partners, a Chicago-based private equity firm focused on the middle-markets, has closed its eighth fund with $765 million in capital commitments. UBS Securities served as placement agent. www.thomacressey.com

Paul Soldatos and John Clark have left their founding partner posts with Compass Partners. Both men have been removed from the firm’s websiteConverged Access Inc., a Billerica, Mass.-based provider of application performance management solutions for converged IP WANs, has raised $8 million in Series C funding. SpaceVest Capital led the deal, and was joined by return backers Ashford Capital Management, Flagship Ventures, MC Venture Partners, North Atlantic Capital and SI Ventures. www.convergedaccess.com

NanoGram Corp., a San Jose, Calif.-based developer of core process technology for the manufacturing of nano-structured materials, has raised $18.7 million in new VC funding. Technology Partners led the deal, and was joined by return backers ATA Ventures, Nth Power Technologies, Bay Partners, Harris & Harris Group, Rockport Capital Partners, Institutional Venture Partners and SBV Venture Partners. www.nanogram.com

VideoEgg Inc., a New Haven, Conn.–based developer of Web-based video publishing solutions, has raised an undisclosed amount of second-round funding led by August Capital. www.videoegg.com

Metabolon Inc., a Durham, N.C.-based developer of biomarkers, has raised $8 million in Series B funding. Sevin Rosen Funds led the deal, and was joined by Harris & Harris Group and return backers The Aurora Funds and The Trelys Funds. www.metabolon.com

Theregen Co., a San Francisco-based regenerative medicine company, has raised $1.5 million in VC funding from Sanderling Ventures. The capital will be used to fund clinical development of Anginera(TM), Theragen’s lead heart therapy product. www.theregencompany.com

Adlyfe Inc., a Rockville, Md.-based developer of diagnostics for such diseases such as Mad Cow and Alzheimer’s, has raised an undisclosed amount of Series A funding from firms like Canaan Partners and Burrill & Co. www.adlyfe.com

RPO Inc., a Wilmington, Del.-based developer of optical waveguide technology for handheld consumer electronics devices, has raised $9.7 million in Series B funding. Backers include BASF Venture Capital ($2m), GE Equity and JAFCO Asia. www.rpo.biz

Aesthetic Sciences Corp., a Palo Alto, Calif.-based biomedical startup, has raised $3 million in Series A funding, according to a regulatory filing. Backers include Domain Associates and Landec Corp.

Buyout Deals

 

The Carlyle Group has acquired a majority stake in Hispanic Teleservices Corp. from JPMorgan Partners and Citigroup Venture Capital. No financial terms were disclosed. HTC is a Houston, Texas-based provider of outsourced customer service for Spanish-speaking customers. It has facilities in both Monterrey and Guadalajara, Mexico. www.carlyle.com www.htc.to

3i Group has acquired a 47% stake in Spain-based cafeteria chain Café & Té for 15 million euros. www.3i.com

PE-Backed IPOs

 

Valera Pharmaceuticals Inc., a Cranbury, N.J.-based drug company focused on urological and endocrine conditions, has set its proposed IPO terms to 3.75 million common shares being offered at between $10 and $12 per share. It plans to trade on the Nasdaq under proposed ticker symbol VLRX, with UBS and Banc of America Securities serving as lead underwriters. The company has raised nearly $35 million in venture capital funding from firms like Sanders Morris Harris, Psilos Group Managers, the New Jersey Technology Council and Wheatley Partners. www.valerapharma.com

PE-Related M&A

 

Goldking Energy Corp., a Houston-based oil and gas company, said today that it has acquired a group of oil and gas properties in Louisiana and the Texas Gulf Coast from EnerVest Energy. The deal technically closed last July, and was backed by equity financing from Natural Gas Partners and a new bank facility from Bank of America and Union Bank of California.

RedPrairie Corp., a Waukesha, Wis.-based provider of supply chain technology solutions, has agreed to acquire Alta A/S, a Denmark–based provider of manufacturing event management solutions for automotive suppliers. No financial terms were disclosed. RedPrairie was acquired last year by Francisco Partners, while Alta has raised venture capital from 3i group and Vaekstfonden. www.redprairie.com www.alta.net

Servion Global Solutions Ltd., a Princeton, N.J.-based provider of customer interaction solutions, has acquired 5by5 Networks Inc., a Milpitas, Calif.-based provider of call center solutions. No financial terms were disclosed. 5by5 has raised venture capital from Athenian Ventures and GMG Capital Partners. www.servion.com www.5by5networks.com

GIMV has sold its 27.2% stake in Single Temperiertechnik to Swiss industrial company Looser Holding AG for an undisclosed amount. GIMV acquired the position in a 2001 secondary buyout alongside Finadvance and Halder IV (both of which also sold to Looser Holding). Single Temperiertechnik is a Germany-based manufacturer of temperature control systems. www.gimv.com

Firm & Fund News

 

BIA Digital Partners of Chantilly, Va. has held a $27 million first close on its second mezzanine fund. The total target is $150 million, with Ariane Capital Partners serving as placement agent. www.biadigitalpartners.com

The Bank of New York has agreed to acquire real estate investment management firm Urdang Capital Management Inc., which manages more than $3 billion in private equity investments and portfolios of REIT securities. No financial terms were disclosed for the deal, which is expected to close later this quarter. www.bankofny.com

Cochran, Caronia & Co., a Chicago–based I-banking firm, has changed its name to Cochran Caronia Waller. www.ccwco.com

Human Resources

 

Krishna “Kittu” Kolluri has joined New Enterprise Associates as a general partner. He will be based in Menlo Park, Calif., and will focus on information technology opportunities. Prior to joining NEA, Kolluri served as executive vice president and general manager of Juniper Networks’ security products group. www.nea.com

Phillip Singerman has joined Toucan Capital as a venture partner. He most recently served as founding executive director of the Maryland Technology Development Corp. www.toucancapital.com

The Carlyle Group has promoted 20 professionals to senior positions, including three to managing director and 17 to principal or director. The new managing directors are: Francis Finelli (U.S. aerospace, defense and security deals, based in Washington), Maki Mitsui (investor relations, based in Tokyo) and Todd Newnam (U.S. tech deals, based in Charlotte). The new principals/directors are: Pam Bentley, John Bylin, Andrew Chung, Oussama Daher, Valeria Falcone, Caroline Goldsmith, Satoru Hayashi, Hayden Jones, Nigel Jones, Yong Kim, Shary Moalemzadeh, Bruno Mourgue D’Algue, Barbara Murphy, Christina Ng, Barbara Polito, Edward Samek and Arthur Torrey. www.carlyle.com

American Capital Strategies has named David Ehrenfest senior vice president for corporate development. He has been a managing director of American Capital and co-leader of the firm’s Bethesda, Md.-based investment team since July 2002. www.americancapital.com

Michel Payan has been named head of M&A with Societe Generale Corporate & Investment Banking. He most recently served as a managing director in charge of French M&A for UK-based Hawkpoint Partners. www.socgen.com

North Castle Partners has promoted Lou Marianaccio from principal to managing director. He joined the firm in 1999 from McKinsey & Co., and currently sits on the boards of both Naked Juice and HDS Cosmetics. North Castle also promoted Alison Minter and Jay Wilkins from associate to principal. Both joined North Castle in early 2001, after having served as analysts at DLJ. www.northcastlepartners.com

Miles Gilburne, managing member of ZG Ventures, has decided not to stand for re-election to the board of Time Warner Inc. (NYSE: TWX) at this year’s annual shareholders meeting. www.timewarner.com

Lobi Powell and Christopher Slinger have joined private equity fund-raising boutique The Silverfern Group Inc. as a managing director and director, respectively. Powell previously served as founder and president of hedge fund marketing firm Elan Alternative Group. Slingler previously was senior vice president of institutional sales with IRG Research. www.silfern.com

Random Ramblings: Ohio, Amp’d and More…

It is unprecedented for a limited partner to sue most of its general partners at the same time, but that’s the level of rarified absurdity to which the Ohio disclosure dispute has sunk.

As expected, Ohio Attorney General Jim Petro last Friday filed a complaint for declaratory judgment in a Franklin County courthouse, with the Ohio Bureau of Workers’ Compensation listed as plaintiff and 43 of its private equity general partners listed as defendants. Now part of this is just legal formality, but Petro and OBWC could have easily avoided this awkward plaintiff/defendant dichotomy. How? By simply asserting that portfolio company information is considered trade secret, and then defending that right in any subsequent lawsuits filed by open records requestors like The Columbus Dispatch and Associated Press file their own lawsuits (which is what happened in California, for example).

But Petro and OBWC instead are going on the offensive, despite an earlier OBWC pledge that the system would take neither a pro-disclosure nor anti-disclosure position in court. The complaint specifically requests that the judge declare that none of the portfolio company information be regarded as trade secret, and that “all of the information from the Defendants that the BWC holds in the Ennis Knupp report is subject to public inspection under the Ohio Public Records Act.

The complaint also includes an interesting excerpt from a 1960 decision in Patterson v. Ayers:

The rule in Ohio is that public records are the people’s records, and that the officials in whose custody they happen to be are merely trustees for the people; therefore anyone may inspect such records at any time, subject only to the limitation that such inspection does not endanger the safety of the record, or unreasonably interfere with the discharge of the duties of the officer having custody of the same.

It is last part of that statement which a judge will have to decide, if he or she does not feel that the trade secret burden is adequately met. It is undeniable that the release of portfolio company information will end any chance OBWC has of getting into new private equity funds, which therefore could be interpreted as interfering with the discharge of duties. On the other hand, OBWC has no immediate plans to remain active in the private equity asset class, so perhaps there is no one left to perform such duties (depending on how you view the duty of fiduciary responsibility vis-à-vis portfolio management).

No word yet on how long the court will take to make its decision, although an attorney did tell me: “I think it could be while before anything definitive comes out–a declaratory judgment action is still litigation and that is usually fairlyprolonged.

*** I’ve obviously been quite taken with Amp’d Mobile, but even I was skeptical when CEO Peter Adderton told folks that the company was planning to secure $100 million in new VC funding just 45 days after adding $50 million from MTV Networks. After all, Amp’d had raised $117 million since August and that’s a lot of moolah – even for a company ramping out a national communications platform. But I’ve been informed that not only has Amp’d grabbed the $100 million, but the deal was oversubscribed and the company opened its pockets a bit wider. A formal announcement is expected next week, so long as a few final details get ironed out. Expect all existing backers to participate – MTV, Universal Music Group, Highland Capital, Columbia Capital, Redpoint Ventures – plus some new private equity names.

*** We’re up to 25 firms participating in our 3rd Annual Internship Drive. Keep ’em coming.

*** Matt Sheahan will be pinch-hitting for me tomorrow, as I’ll be at the Wharton Private Equity Conference in Philly. Hope to see you there.

Top Three

 

Health Dialog Services Corp., a Boston-based provider of care management services like disease management, has raised $170 million via a strategic partial recapitalization. New investors include Oak Investment Partners and American Re (member of the MunichRe Group), plus return backers British United Provident Association (BUPA), HarbourVest Partners, Arcadia Partners and Spencer Trask. www.healthdialog.com

Omrix Biopharmaceuticals Inc., a New York-based developer of therapies in the plasma and biotech fields, has filed to raise $80.5 million via an IPO of common stock. It plans to trade on the Nasdaq under ticker symbol OMRI, with UBS serving as lead underwriter. Shareholders include MPM Capital (29.5% pre-IPO stake) and AlpInvest (8%). www.omrix.com

Jabil Circuit Inc. (NYSE:JBL) has exercised its purchase option to acquire all of the outstanding stock of Celetronix International Ltd., an India-based manufacturer of electronic products. Jabil had loaned $25 million to Celetronix last year in exchange for an option to buy the entire company, with the incremental purchase price for the acquisition is expected to be approximately $155 million plus the assumption of approximately $30 million of net debt. Celetronix has raised around 4136 million in total VC funding since its 2000 inception, from firms like Alta Partners, Baring Private Equity Partners, Flextronics, Golden Gate Capital, New Enterprise Associates and WestBridge Capital Partners. www.jabil.com www.celetronix.com

 

VC Deals

IPWireless Inc., a San Bruno, Calif.-based provider of mobile broadband and multimedia technology, has raised $10 million in new strategic funding from Sprint Nextel. This follows up on a $4 million financing from sprint Nextel in July 2005. IPWireless now has raised around $155 million in total VC funding since its 1999 inception, with other shareholders including Bay Partners, DCM – Doll Capital Management, Gabriel Venture Partners, GIC Special Investments, J.F. Shea Venture Capital, Northwood Ventures and Oak Hill Capital Management. www.ipwireless.com

Fallbrook Technologies Inc., a San Diego-based developer of performance and flexibility solutions of vehicle and equipment transmissions, has called down $9.3 million of an $11 million Series C round at a post-money valuation of $120 million. No investor identities were disclosed. www.fallbrooktech.com

Trulia Inc., a San Francisco-based provider of online real estate services, has raised $5.7 million in Series A funding led by Accel Partners, according to a regulatory filing. www.trulia.com

AdSpace Networks Inc. (f.k.a. CoolSign Media), a New York-based provider of multimedia advertising services for malls, has called down $18 million of a $20 million Series D round, according to a regulatory filing and VentureWire report. Valence Capital Management led the deal, and was joined by AIG Global Sports & Entertainment Fund, DCM-Doll Capital Management, GIC Special Investments and Basil Investment Pte Ltd. www.adspacenetworks.com

Chlorogen Inc., a St. Louis-based developer of a protein-based therapy for gynecological cancer, has raised $6 million in Series B funding. Finistere Partners was joined on the deal by return backers Burrill & Co., Harris & Harris Group, Prolog Ventures and Redmont Venture Partners. www.chlorogen.com

Invarium Inc., a San Jose, Calif.-based provider of layout printability solutions for semiconductor manufacturers, has secured $6 million of a $9 million Series B round, according to a regulatory filing. Backers include Onset Ventures and Goldman Sachs. www.invarium.com

Izze Beverage Inc., a Boulder, Colo.-based provider of sparkling juices, has raised $5.15 million in Series D funding, according to a regulatory filing. Backers include Sherbrooke Capital and Tango. www.izze.com

Intrepid Learning Solutions Inc., a Seattle-based provider of managed training solutions, has secured $6.08 million of a $7.48 million Series C round, according to a regulatory filing. Backers include Rustic Canyon Partners and Madrona Venture Group. www.intrepidLS.com

Intelliburn Energy Systems Inc. of Omaha, Neb. has raised $1 million in Series A funding from TTI Technologies Inc., according to a regulatory filing.

CODA Genomics Inc., an Irvine, Calif.-based developer of synthetic gene kits for protein expression, has secured around $644,000 of a $750,000 Series A round, according to a regulatory filing. Backers include Life Science Angel Investors and Seraphim Fund. www.codagenomics.com

Franklin Fuel Cells Inc., a Malvern, Pa.-based developer of solid-oxide fuel cell technology, has secured $2.32 million of a $10 million Series AA round, according to a regulatory filing. EnerTech Capital Partners is the company’s primary outside backer. www.franklinfuelcells.com

CircumNav Networks Inc., a Palo Alto, Calif.-based developer of traffic information solutions, has raised around $15.5 million in Series A-1 funding, according to a regulatory filing. Skymoon Research & Development is listed as a shareholder. www.circumnavnetworks.com

Consorte Media Inc., a San Francisco-based direct marketing services company specializing in Spanish-speaking customer lead generation, has secured $400,000 of a $551,000 Series A round, according to a regulatory filing. Backers include Band of Angels and Woodside Group. www.consortemedia.com

Buyout Deals

 

Bain Capital has agreed to acquire apparel retailer Burlington Coat Factory Warehouse Corp. (NYSE: BCF) for $45.50 per share. The total transaction is valued at approximately $2.06 billion. www.baincapital.com

Albertson’s Inc. (NYSE: ABS) still may end up in private equity hands, according to The Wall Street Journal. The supermarket chain reportedly has received a $9.6 billion bid from fellow supermarket operator Supervalu Inc. and a consortium of undisclosed private equity firms (which may, or may not, include initial bidders like Cerberus).

Kirtland Capital Partners has acquired Crysteel Manufacturing Inc., a Lake Crystal, Minn.-based manufacturer of light and medium dump and platform bodies and hoists. No financial terms were disclosed. Kirtland will use Crysteel as an add-on acquisition to Truck Bodies & Equipment International Inc., a platform company created by Kirtland in 2005 through the simultaneous acquisitions of Ox Bodies and Rugby Manufacturing. www.kirtlandcapital.com www.crysteel.com

Henan Shineway, a state-owned Chinese meat producer, has put itself of the auction block for approximately $800 million, according to The Financial Times. The report suggests interest from firms like JPMorgan Partners, AIG and Temasek Holdings.

PE-Backed IPOs

 

Koppers Holdings Inc., a Pittsburgh-based provider of carbon compounds and commercial wood treatment products, has increased the numbers of common shares it is offering in its IPO, from 8.7 million to 10 million. The proposed price range remains at between $14 and $16 per share. It plans to trade on the Nasdaq under ticker symbol KOP, with CSFB and UBS serving as lead underwriters. Koppers is controlled by Saratoga Partners.

Healspring Inc. (f.k.a. NewQuest Holdings), a Nashville, Tenn.-based managed care organization, has set its proposed IPO terms to 17 million common shares being offered at between $16 and $18 per share. It plans to trade on theNYSE under ticker symbol HS, with Goldman Sachs, Citigroup and UBS serving as lead underwriters. The company is controlled by GTCR Golder-Rauner, which sponsored a $354.7 million recap of the company earlier this year ($139.7 million in equity). www.myhealthspring.com

Debenhams Retail PLC, a UK-based department store chain, reportedly is considering a Gbp3 billion flotation. The company was bought in 2003 by a private equity group that included CVC Capital Partners, Texas Pacific Group and Merrill Lynch Global Private Equity. www.Debenhams.com

PE-Related M&A

 

LANDesk Software Inc., a New Jordan, Utah-based provider of integrated systems and security management solutions, has acquired substantially all of the assets of NewRoad Software Inc., a Jacksonville, Fla.-based provider of business process management and workflow automation solutions. No financial terms were disclosed. LANDesk Software has received VC funding from firms like Blueprint Ventures and WestBridge Ventures. www.landesk.com www.newroadsoftware.com

Firm & Fund News

Bridge Investment Fund has held a first closing for its inaugural fund, which is targeted at $15 million. The firm has offices in both Cleveland and Tel Aviv, and is interested in Israeli bioscience companies that will establish U.S. operations in the Great Lakes Region.

Silicon Valley Bank plans to open a support and back-operations facility in Salt Lake City in the first half of 2006. www.svb.com

Human Resources

 

Stefano Robertson has joined Golub Capital as a senior vice president in the firm’s Chicago office. He has spent the past eight years with Antares Capital, most recently as a senior vice president. www.golubcapital.com

Barry Neal has joined Wells Fargo & Co. as the company’s first head of environmental finance. He has been an energy industry consultant for the past three years, and before that helped El Paso Energy form a private equity fund. He also was a senior member of Energy Investors Funds Group. www.wellsfargo.com

Keir Barrie reportedly has joined the private equity practice of UK law firm Osborne Clarke. Barrie is a former in-house counsel with OC client 3i Group, and most recently was a partner with Addleshaw Goddard. Osborne Clark also has hired private equity associate Justine Jones away from Lovells. www.osborneclarke.com

Matt Mitchell has agreed to join boutique placement agent Champlain Advisors as a vice president. He previously worked in Lehman Brothers’ private funds group. www.champlainadvisors.com

Financo Inc. has promoted William Busko to managing director of mergers and acquisitions. It also has hired former Dresdner Kleinwort Wasserstein pro Reyaz Kassamali as a director. www.financo.com

JumpStart Inc., a Cleveland-based nonprofit venture development organization, has hired Roy Phelan as an executive-in-residence and Kerri Breen as an investment associate. Phelan most recently was CEO of software startup PinPoint1, while Breen was a vice president in the syndicated finance group at KeyBank. www.jumpstartinc.org

Just Linking Around…

*** Some academics are finally saying what we’ve all known for a long time: The 1990-2002 U.S. venture capital market was driven more by fund-size supply than by entrepreneurial demand beginning in the early 1990s. Why? Because pension funds clouded the market with limited partner commitments. Two quick notes: I wish the researchers hadn’t stopped at 2002, since the VC market has shown remarkable fund size restraint in the subsequent years (even though most public pension funds remain actively involved in the market). Also, one must wonder if a similar analysis of the buyout market circa 2003-2006 would be even more damning.

*** Not surprisingly, 2005 venture capital disbursements into U.S. companies rose to their highest level since 2001, according to data released today by Ernst & Young and VentureOne. Overall it found $22.13 billion invested during 2,239 deals during 2005, which represents around a 2% increase over 2004. Q4 2005 figures, however, showed a slight drop from Q3 2005. We’ll dig deeper into the year-end data tomorrow, when PwC, the NVCA and Thomson Financial release the MoneyTree Survey results.

*** Why get funded in a conference room, when you can get funded in a bathroom?

*** Bill Burnham on leaving Celsius Capital, in his own words.

*** Niel Robertson, CTO of Newmerix, provides an entrepreneur’s view on early-stage venture financing terms.

*** Voting for EVCJ’s annual awards has now closed. Winners will be announced at a drinks reception taking place at the Trafalgar Hotel in central London on Tuesday 31 January (at which I’ll provide some opening remarks before grabbing those aforementioned drinks). For further information about the event please visit www.evcjawards.com. To reserve your place, please go here.

*** Yup, the Internship Drive will begin tomorrow. Last chance to get your firm involved. For those firms that already have indicated interest, I’ll be sending info later today…

Top Three

 

ITA Software Inc., a Cambridge, Mass.-based provider of IT platforms for the airline industry, has raised $100 million in first-round funding. Battery Venturesled the deal, and was joined by General Catalyst Partners, PAR Investment Partners, Sequoia Capital and Spectrum Equity. ITA Software was founded in 1996, but had not taken any venture capital until this deal.

Albertson’s Inc. (NYSE: ABS) has agreed to be sold for around $17.4 billion to a group that includes Supervalu Inc., CVS Corp., Cerberus Capital and Kimco Realty. www.albertsons.com

Vestar Capital Partners has closed its fifth fund with $3.7 billion in capital commitments. An initial close on $3 billion came last August, while the final close occurred in December. Monument Group assisted in the fund-raising. www.vestarcapital.com

 

VC Deals

SpikeSource Inc., a Redwood City, Calif.-based open source IT infrastructure company, has secured $15 million of a $20 million Series B funding round, according to a regulatory filing. Duff Ackerman & Goodrich was joined on the deal by return backers Fidelity Ventures and Kleiner Perkins Caufield & Byers. www.spikesource.com

StrongMail Systems Inc., a Redwood Shores, Calif.-based provider of email infrastructure software, has raised $9.5 million in Series B funding. Globespan Capital Partners led the deal, and was joined by return backers Sequoia Capital and Evercore Ventures.www.strongmail.com

ProFind Inc., a Rolling Meadows, Ill.-based provider of recruiting technology solutions, has raised $4.5 million in Series A funding. River Cities Capital Fund led the deal, and was joined by Velocity Equity Partners. www.peoplefilter.com

TeleCIS Wireless Inc., a Santa Clara, Calif.-based developer of broadband wireless chipset technology, has held a $10 million first close on a $16 million Series C funding round. ATA Ventures led the deal, and was joined by PMC-Sierra Inc. www.telecis.com

SignalDemand, a San Francisco-based provider of sales and profit optimization software for food and consumer goods manufacturers, has raised $7.5 million in Series B funding. General Catalyst Partners led the deal, and was joined by return backers Hummer Winblad Venture Partners and Catamount Ventures. www.signaldemand.com

H-Stream Wireless Inc., a San Carlos, Calif.-based provider of wireless electronic equipment, has raised $11.88 million in Series A funding, according to a regulatory filing. Backers include Tallwood Venture Capital and Granite Ventures.

Attainia Inc., a San Jose, Calif.-based provider of capital equipment software to the healthcare industry, has secured $800,000 of a $1 million Series C funding round, according to a regulatory filing. Company backers include Startup Capital Ventures and Neoforma Inc. www.attainia.com

DirectoryM Inc., a Cambridge, Mass.-based provider of online advertising solutions, has secured around $3.65 million of a $7.23 million Series C funding round, according to a regulatory filing. Backers include Matrix Partners, BV Capital and FdG Associates. www.directorym.com

Clearwell Systems Inc., a Santa Clara, Calif.-based provider of corporate email intelligence solutions, has raised an undisclosed amount of first-round funding from Sequoia Capital. www.clearwellsystems.com

UCLT Ltd., an Israeli provider of laser-based yield enhancement tools for the semiconductor manufacturing industry, has raised $8.7 million first-round funding from Lightspeed Venture Partners. www.uclt.com

Avokia Inc., a Toronto-based provider of database middleware software, has raised US$7.4 million in second-round funding. Globespan Capital Partners led the deal, and was joined by SAP Ventures and return backers Ventures West and BDC Venture Capital. www.avokia.com

Clarabridge, a Falls Chuch, Va.-based provider of text-mining software, has raised $3 million in VC funding from Boulder Ventures. www.clarabridge.com

Buyout Deals

 

Providence Equity Partners has received German regulatory approval to acquire another 61% of Kabel Deutschland GmbH, giving it a 95% position (company management holds the remainder). The sellers are Goldman Sachs Capital Partners and Apax Partners, which teamed with Providence in 2003 to acquire Kabel Deutschland for 1.7 billion euros. No financial terms have been disclosed. www.provequity.com

Titan International Inc. (NYSE: TWI) says that it is considering an $18 per share buyout offer from One Equity Partners. www.titan-intl.com

Leonard Green & Partners has agreed to buy The Sports Authority Inc. (NYSE: TSA) for $37.25 per share. The overall deal is valued at around $1.3 billion, including assumed debt. www.sportsauthority.com

Bally Total Fitness (NYSE: BFT) has completed the sale of its Crunch Fitness division for $45 million in cash to health-club entrepreneur Marc Tascher and the private equity group of Angelo, Gordon & Co. www.ballyfitness.com

H.I.G. Capital has acquired the Greenville, Pa.-based extruded products division of Werner Co. The division will be renamed WXP Inc., and provides aluminum extrusion products and alloyed aluminum billet to North American customers. No financial terms were disclosed for the deal, which closed at the end of 2005. www.higcapital.com www.wernerco.com/ExtrudedProducts

The Riverside Co. has acquired RCS Management Corp., a Carmel, Ind.–based respiratory care provider. No pricing terms were disclosed for the deal, which included leverage from PNC Bank and Gladstone Capital. Jerry Baker & Associates represented RCS. www.riversidecompany.com www.rcsoxygen.com

PE-Backed IPOs

Acorda Therapeutics Inc., a Hawthorne, N.Y.-based biotech company focused on spinal cord injuries, has set its proposed IPO terms to 5.5 million common shares to be offered at between $11 and $13 per share. It plans to trade on the Nasdaq under ticker symbol ACOR, with Banc of America Securities serving as lead underwriter. This is the second IPO attempt for Acorda, which filed for a $75 million offering in September 2003, but withdrew it in early 2004. The company has raised around $140 million in total VC funding since its 1995 inception, from firms like MPM Capital, Elan Corp., Forward Ventures, Easton Hunt Ventures, Crossroads Atlantic Partners, TVM and MDS Health Ventures. www.acorda.com

PE-Related M&A

 

Evergreen Copyright Acquisitions LLC, a new music publishing company backed by Lehman Brothers Merchant Banking, has made five acquisitions: the Rykomusic assets and Warlock Music catalog (featuring the major works of Nick Drake), the Teddy Riley catalog, the Audigram catalog (including a number of works by J.J. Cale), the Bill Monroe Music catalog and the Matt Slocum catalog.

Broadcom Corp. (Nasdaq: BRCM) has agreed to acquire Sandburst Corp., an Andover, Mass.-based provider of scalable packet switching and routing systems-on-a-chip that are deployed in enterprise core and metropolitan Ethernet networks. The deal is valued at approximately $80 million, including $75 million in cash. Sandburst has raised around $70 million in VC funding since its 2000 inception, from firms like Greylock, 3i Group, Boston University Community Technology Fund, Matrix Partners, Intel Capital, SpaceVest, NeoCarta Ventures and Investor Growth Capital. www.broadcom.com www.sandburst.com

WebMD Health Corp. (Nasdaq: WBMD) has acquired eMedicine.com Inc., an Omaha, Neb.-based online publisher of medical reference information for physicians and other healthcare professionals. The purchase price was $25.5 million. EMedicine had raised around $16 million in VC funding from firms like H.I.G. Capital, Omnicom Group and Tenet Healthcare. www.webmd.com www.emedicine.com

Raser Technologies Inc. (PCX: RZ) (“Raser”) has agreed to acquire Amp Resources LLC, a Salt Lake City-based developer of power generation technologies. The total deal is valued at approximately $260 million, including $38 million in cash and up to 10 million shares of Raser common stock (which gives Amp stockholders a 16% stake in Raser). Amp Resources is a portfolio company of Highland Capital Partners. www.rasertech.com www.ampresources.com

Allscripts (Nasdaq: MDRX) has agreed to acquire A4 Health Systems, a Cary, N.C. –based provider of practice management and electronic health record solutions for small and mid-sized physician groups. The deal is valued at approximately $272 million, including $215 million in cash and 3.5 million Allscripts shares. A4 Health Systems has raised over $31 million in VC funding from groups like Wachovia Corp., Wakefield Group and McConnell Venture Partners. www.allscripts.com www.a4healthsys.co

BuzzMetrics Inc., a New York-based provider of online consumer-generated media analysis, has agreed to acquire Cincinatti-based rival Intelliseek Inc. Buzzmetrics is backed by VNU, while Intelliseek has raised over $21 million in VC funding from firms like BlueRun Ventures, River Cities Capital Funds, ChrysCapital, Ford motor Co. and In-Q-Tel. www.buzzmetrics.com www.intelliseek.com

Citadel Broadcasting Corp. (NYSE: CDL) reportedly has emerged as the leading bidder for the ABC Radio unit of Walt Disney Co. The deal could be valued at upwards of $3 billion, with both Entercom Communications and KKR believed to have been rival bidders. Citadel counts Forstmann Little & Co. as a major shareholder.

Firm & Fund News

General Catalyst Partners has closed its fourth fund with “nearly $400 million” in capital commitments. www.generalcatalyst.com

Hicks Holdings LLC, a Dallas-based family investment office headed by Tom Hicks, has formed a hotel development joint venture with Gatehouse Capital Corp., a Dallas-based real estate firm and the largest third-party developer of W Hotels. The new effort will involve co-investments in high-end hotel and residential real estate projects in Texas and California, including the W Hollywood Hotel and Residences project in Los Angeles.

Human Resources

 

David Liu has agreed to join Kohlberg Kravis Roberts & Co. as a managing director focused on opportunities in Asia. He previously served as head of Morgan Stanley Private Equity Asia. www.kkr.com

Ralph Snyderman has joined New Enterprise Associates as a venture partner focused on opportunities in the healthcare space. He is chancellor emeritus of Duke University and a professor of medicine at the Duke School of Medicine. www.nea.com

Jed Katz has joined DFJ Gotham Ventures as a venture partner. He is expected to become a general partner once the firm raises its next fund, and previously served as COO of Yamcon and as co-founder and COO of Rent Net (acquired by Cendant). www.dfjgotham.com

Andy Sandham has joined Abingworth Management as a venture partner. He previously served as CEO and co-founder of Ionix Pharmaceuticals. www.abingworth.com

CMEA Ventures has promoted Andrea Tobias to the position of partner. She joined the firm in July 2001, and had been a venture partner focused on life sciences. www.cmeaventures.com

Frank Plastina has joined telecom products company Tekelec (Nasdaq: TKLC) as president and CEO. He had joined Warburg Pincus as an executive-in-residence in 2003, after which he became CEO of Warburg portfolio company Proxim Corp. Once Proxim’s assets were bought out of bankruptcy last year by Terabeam, Plastina returned to his entrepreneur-in-residence role with Warburg Pincus. www.tekelec.com

Robert Joyal has joined the board of Jefferies Group Inc. (NYSE: JEF). He had served as president of Babson Capital Management from 2001 until his retirement in June 2003. www.jefferies.com

 

Top Three

 

Venture capitalists invested approximately $21.68 billion into U.S.-based companies in 2005, according to MoneyTree Survey data released today by PricewaterhouseCoopers, Thomson Financial and the National Venture Capital Association. This represents a very slight bump over the $21.64 billion raised in 2004, with average deal size rising from $7.29 million to $7.37 million. The year’s largest deal was the $311 million round for Integro Ltd., while Vonage placed second. Nearly 36% of all VC disbursements were into Northern California-based companies, while New England-based companies (11.94%) and Southern California-based companies (11.54%) followed. www.nvca.com

Wisair Ltd., an Israel-based provider of UWB and USB chipset solutions, has raised $20 million in Series C funding. Apax Partners led the deal, and was joined by fellow return backers Bynet, Intel Capital and Vertex Management. New shareholder Tomen Electronics also participated. Wisair has now raised nearly $45 million in total VC funding since its 2001 inception. www.wisair.com

Ian Charleshas joined the secondary team of Landmark Partners as a vice president. He previously was co-founder of Cogent Partners.

VC Deals

Tagged Inc., a San Francisco-based developer of “teen-focused businesses,” has raised $7 million in Series B funding, according to a regulatory filing. Backers include Mayfield Fund, while outside directors include Reid Hoffman and Peter Thiel.

Spinal Modulation Inc., a Menlo Park, Calif.-based medical device startup, has raised $7 million in Series A funding, according to a regulatory filing. Backers include Kleiner Perkins Caufiled & Byers, DFJ ePlanet Ventures and DeNovo Ventures.

Rapt Inc., a San Francisco-based developer of price optimization and profitability management software, has raised around $11.23 million in Series D funding, according to a regulatory filing. Return backers include Summit Partners, Accel Partners and Levensohn Venture Partners. www.rapt.com

Healthline, a San Francisco-based operator of an online search engine for consumer healthcare, has raised $14 million in first-round funding. Vantagepoint Venture Partners led the deal, and was joined by Reed Elsevier Ventures, Mitsui & Co. and JHK Investments. www.healthline.com

Proacta Inc., a San Diego-based drug company focused on oncology, has raised $12 million in Series A funding. GBS Ventures of Australia led the deal, and was joined by Alta Partners, Endeavour i-Cap, Genentech, Roche and No8 Ventures. www.proactatherapeutics.com

Provade Inc., a San Mateo, Calif.–based provider of on-demand managed procurement services, has raised $4 million in first-round funding. Altos Ventures led the deal. www.provade.com

Splunk Inc., a San Francisco-based developer of speech search software for IT data, has raised $10 million in second-round funding. JK&B Capital was joined on the deal by return backers August Capital and Sevin Rosen Funds. www.splunk.com

Webpay AG, a Zurich, Switzerland-based provider of e-payment solutions for online and mobile digital content providers, has received $23 million in venture funding from 3i Group. www.webpay.ch www.3i.com

Apprion Inc., a Moffett Field, Calif.–based provider of industrial wireless network performance management and improvement, has raised $7.5 million in Series A funding co-led by Advanced Technology Ventures and Allegis Capital. www.apprion.com

Snakeyes Inc., a Washington, D.C.-based provider of software that automatically creates patches to secure network vulnerabilities, has raised $100,000 in Series A funding from Novak Biddle Venture Partners, according to a regulatory filing.

Metconnex Inc., an Ottawa, Canada–based provider of optical wavelength switch modules, has raised Cdn$8.1 million in new VC funding. Return backers include Skypoint Capital, Vesbridge Partners, Innovacom and BDC Venture Capital. www.metconnex.com

RPO Inc., an Australia-based provider of polymer optical materials and waveguides, has raised US$9.7 million in Series B funding. GE Equity, BASF Venture Capital and JAFCO Asia were joined on the deal by return backers Neo Technology Ventures, Jolimont Ventures, Allen & Buckeridge Emerging Technologies Fund and the Canberra Business Development Fund. www.rpo.biz

Ash Access Technology Inc., a Lafayette, Ind.-based developer of antimicrobial and vascular access technologies, has raised $6 million in Series B funding. Participants included Bear Stearns, Frantz Medical Venture Fund, 8 Plus Ventures and various individuals. Periculum Advisors served as placement agent. www.ashaccess.com

DBV Technologies, a French drug company focused on allergy therapies and diagnostic tests, has raised 12.3 million euros in new VC funding. Sofinnova Partners and Apax Partners co-led the deal, with respective contributions of seven million euros and five million euros. Return backers included Cap Décisif and Creagro (350,000 euros each). www.dbv-technologies.com

Buyout Deals

 

Loews Cineplex Entertainment Corp. has sold its 50% stake in South Korean movie theater operator Megabox Cineplex Inc. to Standard Chartered Private Equity Ltd. and Mediaplex Inc., a South Korean movie distributor. The deal was valued at $80 million. Lowes and Mediaplex founded Megabox in 1999 as a 50-50 joint venture.

La Quinta Properties Inc.(NYSE: LQI) shareholders have agreed to an $11.25 per share buyout by The Blackstone Group. The entire deal is valued at $3.4 billion, with leverage being provided by Bank of America, Bear Stearns and Merrill Lynch. www.blackstone.com www.lq.com

Frontenac Co. has acquired The National System Inc., a St. Louis–based marketing services firm. The deal is reported to be valued at around $40 million. www.thenationalsystem.com

Sowood Capital Management is opposing Apax Partners’ proposed $1.6 billion acquisition of Tommy Hilfiger, on the grounds that the deal undervalues the business. Sowood owns approximately 6.3% of Hilfiger’s outstanding shares.

PE-Backed IPOs

Morton’s Restaurant Group Inc., a Chicago-based operator of upscale steakhouses, has set its proposed IPO terms to nine million common shares being offered at between $14 and $16 per share. It plans to trade on the NYSE under ticker symbol MRT, with Wachovia Securities serving as lead underwriter. Morton’s is controlled by Castle Harlan and its affiliates. www.mortons.com

Infonxx Inc., a Bethlehem, Pa.-based telephone directory services provider, reportedly is considering a second-half IPO that would value the company at around $1.1 billion. Goldman Sachs is among the banks it is consulting. Technology Crossover Ventures is an Infonxx shareholder. www.infonxx.com

Focus Media Holding Ltd. (Nasdaq: FMCN), a China-based outdoor advertising company, is planning to raise nearly $330 million via a secondary offering of American depository shares. Selling shareholders include Goldman Sachs, Draper Fisher Jurvetson ePlanet, 3i Group and Victory Venture Capital. www.focusmedia.com.cn

PE-Related M&A

 

CDC Corp. (Nasdaq: CDC) has agreed to acquire JRG Software Inc., a San Mateo, Calif.-based provider of software for the consumer goods market. No financial terms were disclosed for the deal, which is expected to close later this month. JRG has raised around $11 million in VC funding since its 2001 inception, from firms like Bay Partners and U.S. Venture Partners. www.jrgsystems.com

Knight Capital Group Inc. (Nasdaq: NITE) has agreed to acquire Hotspot FX Inc., a Watchung, N.J.–based provider of spot foreign exchange trade execution for institutions and deals via an electronic platform. The deal is valued at approximately $77.5 million in cash, and is expected to close within the next 90 says. Hotspot FX has raised VC funding from currency trader Joe Lewis and ETF Group. www.hotspotfx.com

ATS Medical Inc. (Nasdaq: ATSI) has agreed to acquire 3F Therapeutics Inc., an Irvine, Calif.-based medical device company focused on minimally-invasive beating-heart tissue valve replacement. The all-stock deal includes an initial issuance of nine million ATS common shares, and the possibility of another 10 million shares based on 3F hitting certain milestones. ATS stock opened trading today at $2.99 per share. 3F Therapeutics has raised around $34 million in VC funding since its 1998 inception, from firms like Domain Associates, Boston Scientific and 3i Group. www.atsmedical.com www.3ftherapeutics.com

Healthcare Solutions Inc. (a.k.a. Accuro), a Dallas-based provider of financial and operational solutions for healthcare providers, has acquired CodeCorrect LLC, a Yakima, Wash.–based provider of web-based coding tools to help hospitals and physicians streamline the reimbursement process and optimize revenue. The selling party was an affiliate of United Communications Group, but no financial terms were disclosed. Accuro is controlled by Welsh, Carson, Anderson & Stowe. www.accurohealth.com www.codecorrect.com

AMVESCAP PLC has agreed to acquire PowerShares Capital Management LLC, a Wheaton, Ill.-based provider of exchange-traded funds (ETFs). The deal is valued at $60 million in cash, plus more than $170 million in possible earn-outs. PowerShares raised VC funding from FT Ventures in early 2005. www.amvescap.com www.powershares.com

Firm & Fund News

HitecVision Private Equity, a Norway–based firm focused on the energy sector, has held a $283 million first close on its fourth fund. Limited partners include Argentum Fondsinvesteringer, Nordea, Vital, Gjensidige, Storebrand and KLP Forsikring. Pareto Private Equity served as placement agent. www.hitecvision.com

Golub Capital has held a $300 million first close for its offshore fund. www.golubcapital.com

Human Resources

 

Jochen Winter has joined the Frankfurt office of law firm Willkie Farr & Gallagher LLP. He most recently was a partner with Linklaters, and will continue to focus on the private equity and corporate M&A markets. www.willkie.com

Todd Plotner has joined Chapman and Cutler LLP as a partner focused on asset-backed securitizations. He previously was with the Chicago office of Sidley Austin. www.chapman.com

Jeff Williams has joined Hunt Ventures as a Dallas-based managing director focused on the early-stage IT space. He most recently served as a general partner with Chisholm Private Capital Partners. www.huntventures.com

Alain Madelin, former French finance minister, has joined secondary placement agent Triago-X as a senior advisor, according to The Financial Times. www.triago.com

Stout Risius Ross Advisors has made the following hires: David West, managing director of I-banking, previously founded and ran Pioneer Capital Advisors; Terrel Bressler, managing director of I-banking, previously was managing director and head of Cleary Gull’s Chicago office; and Timothy Emmitt, director of restructuring & performance improvement, previously was COO of Noble International LLC. www.srr.comAndreas Lazar has joined

Sirius Satellite Radio Inc. (Nasdaq: SIRI) as senior vice president of business development. He previously was a vice president with Allen & Co. www.sirius.com

The Hump-Day Handful

Just some quick notes to get us past the mid-week point:

*** Great Hill Equity Partners of Boston in late 2005 held a $510 million first close for its third fund, and shouldn’t have trouble hitting its $700 million target within the next month or so (PSERS, for example, is reviewing a recommended commitment today). Same focus on service industry-oriented growth companies, with average equity infusions of between $25 million and $75 million. There will be one major change, however, in that firm co-founder Steve Gormley will not be a general partner. Instead, the management quartet will shrink to a trio, with fellow firm co-founders Christopher Gaffney and John Hayes running the fund alongside Matthew Vittel. No word yet from Gormley about his future plans, or if he has yet reached a financial agreement with Great Hill (he hadn’t, as of a few days before the first close).

*** Last Friday, Matt Sheahan wrote about a bunch a new emerging markets funds. Among those was DFJ Nexus Fund, a Draper Fisher Jurvetson affiliate that will back Ukranian and Russian startups. Word is that the fund is now looking to close on around $100 million in LP commitments.

*** Not only is Amp’d Mobile raising lots of money, but so are its three VC firm backers. So while we wait for Amp’d to formally announce its latest $100 million-plus venture deal, let’s take a quick look at the fund-raising progress of Columbia Capital, Highland Capital Partners and Redpoint Ventures. Columbia Capital in late December closed on more than $500 million for its fourth fund (in excess of its $450 million target), and plans to hold a final close by the end of January (just finishing up with a late-arriving LP). Highland had been looking to raise $800 million for its eighth fund, and scuttlebutt is that it has held a final close (if not, it’s just in formal paperwork limbo like Columbia). Finally there is Redpoint, which is well oversubscribed for its third fund, which was targeted at $400 million.

*** And even more fund-raising activity, as Bain Capital has sent out books on a $6 billion-targeted ninth fund. For context, this is just 18 months after Bain held the first call-down on $3.5 billion eighth fund. Yup, that’s the same firm that held the first call-down on its $3.5 billion predecessor fund in July 2004. More on this tomorrow.

*** Per a reader suggestion, the Internship Drive has been rechristened the Internship Rodeo (but only for tax purposes). Also, we are having some inbox issues with pewireinterns16@yahoo.com, which was the family wealth management office in Mission Viejo, Calif. It will be fixed by tomorrow, at which point we’ll also have another dozen internship postings. To get yesterday’s list, go here.

*** I’ll be in London for three days next week, which I’m ashamed to admit will be my first trip to that city. So my question to you is how I should spend my five hours of available sight-seeing time. What is the can’t-miss thing to do?

*** Speaking of questions, Jeff Clavier posted one for me on his blog. My answer is that I’m in full agreement, and that details should be coming relatively soon (I’m looking for the millionth-mover advantage).

*** Finally, just a reminder that the Harvard Business School VC/PE Conference will be held on Saturday, February 4 in Cambridge, Mass. I’ll be moderating a keynote debate between Howard Anderson and Todd Dagres, focused largely on Howard’s “Goodbye to Venture Capital” article from last year. It’s safe to say that Todd has a more optimistic outlook, given that he launched a new VC firm — Spark Capital — less than a year ago. Hope to see you there…

If any additional firms want to participate, please let me know ASAP…

Top Three

 

MAP Pharmaceuticals Inc., a Mountain View, Calif.-based developer of inhaled drug therapies, has raised $25.25 million in Series C funding. Brookside Capital, an affiliate of Bain Capital, led the deal. It was joined by Alexandria Real Estate Equity and return backers Perseus-Soros Biopharmaceutical Fund, Bay City Capital, Pequot Ventures and Skyline Ventures. MAP’s two leading drug candidates are for the treatment of asthma and migraines, and previously raised a $30 million Series B round in late 2004. www.mappharma.com

The Carlyle Group and Providence Equity Partners have offered to buy a 25% stake in broadband telecom company Fastweb, according to Italian newspaper Il Sole 24 Ore. The stake is currently held by company chairman Silvio Scaglia, while Apax Partners and Permira also are reported to be preparing a bid.

Traffic.com Inc., a Wayne, Pa.-based provider of real-time traffic information in the United States, priced 6.55 million common shares at $12 per share, for an IPO take of approximately $78.6 million. It plans to trade on the Nasdaq under ticker symbol TRFC, used W.R. Hambrecht & Co.’s OpenIPO process. The company had raised approximately $120 million in total VC funding since its 1997 inception. TL Ventures held a pre-IPO majority position, while other shareholders include PA Early Stage Partners, Convergence Capital, Bessemer Venture Partners and National Electrical Benefit Fund. www.traffic.com

VC Deals

Airwide Solutions, a UK-based provider of mobile infrastructure software for wireless operators, has raised $25 million in Series D funding. Advent International led the deal, and was joined by return backers Artiman Ventures, Axiom Venture Partners, Key Venture Partners and Kodiak Venture Partners. www.airwidesolutions.com

WisdomArk Inc. of Los Altos, Calif. has raised $6.3 million in Series A funding from El Dorado Ventures, Venrock Associates and Benhamou Global Ventures. The company operates a consumer web service aimed at helping family and friends collaborate in the capture, sharing, and preservation of life stories. www.wisdomark.com

rPath, a Raleigh, N.C.-based provider of a platform for creating and maintaining Linux software applications, has raised $6.4 million in Series A funding. North Bridge Venture Partners and General Catalyst Partners co-led the deal. www.rpath.com

Ipsat Therapies, a Finland-based drug company focused on hospital-acquired infections and antibiotic resistance, has raised 3 million euros in VC funding from InnovationsKapital. www.ipsat-ther.com

Brandalley, a France-based operator of an online outlet retailer for luxury brands, has raised more than Gbp2 million in VC funding from UK-based Banexi Ventures. www.brandalley.fr

Magnolia Broadband Inc., a Bedminster, N.J.-based fabless semiconductor company focused on antenna diversity solutions for the wireless industry, has raised $14 million in Series D funding. Quantum Technology Partners and WS Investments were joined by return backers Draper Fisher Jurvetson Gotham, ECentury Capital Partners, Intel Capital, SCP Private Equity Partners, Selway Partners and Silverstar Holdings. www.magnoliabroadband.com

Scoperta Inc., a San Diego-based alloy research and development startup, has secured $500,000 of a $1 million Series A round, according to a regulatory filing. Backers include Enterprise Partners and Vista Ventures.

Assurz Inc., a San Carlos, Calif.-based provider of e-commerce transaction solutions, has raised $5 million in Series A funding, according to a regulatory filing. Putnam Lovell NBF Securities is listed as a shareholder. www.assurz.com

Executive Health Resources, a Newtown Square, Pa.–based provider of clinical revenue cycle management and staffing solutions to hospitals, has received an undisclosed amount of venture capital funding from WestView Capital Partners. www.ehrdocs.com

Extricom Ltd., an Israel-based provider of WLAN infrastructure solutions, has received an undisclosed amount of strategic funding from Motorola Ventures. www.extricom.com

Buyout Deals

 

The Riverside Co. has acquired ITT Richter Chemie-Technik GmbH, a Germany-based supplier of pumps, valves, controls and related services to parts of the chemical, fine chemical and pharmaceutical industries. No financial terms were disclosed. The selling party was ITT Industries Inc. (NYSE: ITT), with Riverside partnering with ITT Richter management. www.riversidecompany.com www.richter-ct.com

Sentinel Capital Partners has sold Alemite Holdings LP to an affiliate of Harbour Group. Alemite is a Charlotte, N.C.–based manufacturer of industrial lubrication and fluid handling equipment and systems, and will join Lincoln Industrial Corp. as part of Harbour Group’s lubricating systems group. No financial terms were disclosed, although Sentinel reports a 4x ROI over 3.5 years. www.alemite.com

Saber Consulting Inc., a Salem, Ore.–based provider of IT software and services, has received an undisclosed amount of private equity funding from Accel-KKR. www.saberconsulting.com www.accel-kkr.com

PE-Backed IPOs

AmCOMP Inc., a North Palm Beach, Fla.-based property and casualty insurer specializing in workers’ compensation products, has set its proposed IPO terms to 10.5 million common shares being offered at between $9 and $11 per share. It plans to trade on the Nasdaq under ticker symbol AMCP, with Friedman Billings Ramsey serving as lead underwriter. AmCORP is backed by Sprout Group and Welsh Carson Anderson & Stowe. www.amcomp.com

Nighthawk Radiology Holdings Inc., a Coeur d’Alene, Idaho-based provider of nighttime and weekend emergency radiology services to radiology groups and hospitals, has set its proposed IPO terms to 5.8 million common shares being offered at between $12 and $14 per share. It plans to trade on the Nasdaq under ticker symbol NHWK, with Morgan Stanley serving as lead underwriter. Summit Partners holds a 27.1% pre-IPO ownership position in the company. www.nighthawkrad.net

SGX Pharmaceuticals Inc. (f.k.a. Structural Genomics), a San Diego-based drug company focused on cancer therapeutics, has reduced the price range of its proposed IPO from $11-$13 per share to $7-$8 per share. It still plans to offer four million common shares, and trade on the Nasdaq under ticker symbol SGXP. CIBC World Markets and Piper Jaffray are serving as lead underwriters. The company has raised over $90 million in total VC funding since its 1998 inception, from firms like Atlas Venture, BA Venture Partners, Sprout Capita, Index Ventures and Prospect Venture Partners. www.sgxpharma.com

PE-Related M&A

 

United Biosource Corp., a Bethesda, Md.-based provider of evidence-based services and information to the life sciences industries, has acquired iLearn, a learning management system developed by UK-based IQ Consultancy Group. No financial terms were disclosed. United BioSource is backed by Whitney & Co., Grotech Partners and Oak Investment Partners. www.unitedbiosource.com www.iq-consultancy.com

Firm & Fund News

H&Q Asia Pacific has raised $500 million for a pair of private equity funds focused on the North Asian markets. Asia Pacific Growth Fund V will focus on later-stage or large deals in Japan, South Korea, and Greater China, while H&Q-NPS Fund I will adopt a similar strategy for Korea-based companies.

The Pennsylvania State Employees’ Retirement Board today will consider fund commitments for: ABRY Senior Equity II, AG Capital Recovery Partners V, Charterhouse Capital Partners VIII, Francisco Partners II, Great Hill Equity Partners III, Madison Dearborn Capital Partners V, Polaris Venture Partners V, TA Associates X and Worldview Technology Partners V. It also will recommend the following funds receive interviews: Centerbridge Partners I, Chequers Capital III, Excelsior Capital Asia Partners III and singular Guff BRIC Opportunities Fund. www.sers.state.pa.us

Human Resources

 

JChristopher McCleary has joined Blue Chip Venture Co. as a director, and head of a new Annapolis, Md. office. He previously served as founder of Evergreen Assurance Inc., a computer disaster recovery company that was acquired in late 2004 by MessageOne. www.bcvc.com

William Crouse, general partner of HealthCare Ventures, has joined the board of Targanta Therapeutics, a privately-held antibacterial drug company based in Quebec, Canada. www.targanta.com

Chris Pike, a partner with Advent International, has joined the board of portfolio company Aspen Technology Inc. (Nasdaq: AZPN), a provider of software and services to the process industries. He replaces fellow Advent pro Douglas Kingsley. www.aspentech.com

Robert W. Baird & Co. has promoted both Joel Cohen and David Wierman to the position of managing director. Cohen is based in Chicago, and is a member of the firm’s industrial and financial sponsors groups. Wierman is an Atlanta-based member of the firm’s financial sponsors group. www.rwbaird.com