PE Week Wire for Friday 10/4

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Insulet Corp., a Beverly, Mass.-based developer of wireless insulin pumps for diabetes patients, is expected to announce Monday that it has raised $22 million in its third round of venture capital funding. New investor Pequot Capital Management led the Series C deal, and was joined Oakwood Medical Investors and return backers Prism Venture Partners, Versant Ventures and Schroder Ventures Life Sciences. No valuation information was available by press time, although Insulet was given an $18.8 million post-money mark after its $11 million second round deal in June 2001.

Bayer AG said today that it intends to sell its Rhein Chemie Rheinau subsidiary to a group of financial investors advised by Advent International Corp. for EUR 215 million, including the assumption of debt. Founded in 1889, Rhein Chemie has been a subsidiary of Bayer AG since 1971. The company is an internationally successful supplier of specialties to the rubber, lubricant and plastic industries. The sale is expected to close at the beginning of November, subject to regulatory approvals.

Lehman Brothers has named Ros Stephenson and Peter Combe co-heads of the Global Financial Sponsor Group. Stephenson had been managing the U.S. sponsor group while Combe was serving as head of the U.K. group. This announcement reinforces the Firm’s view that buyouts have become more global, thus leveraging strong cross-border capabilities.

Cambridge Silicon Radio , a Richardson, Texas-based provider of single-chip radio devices, yesterday announced that it has secured $19 million of new funding following a successful private equity placement. The round was led by LDC and Scottish Equity Partners, with participation from existing institutional investors. CSR will use the funds raised to expand market activities and further invest in the development of its single-chip Bluetooth solution and complimentary wireless communications technologies. CSR is advised by Credit Suisse First Boston’s Technology Group in London.

Corcept Therapeutics Inc. , a Menlo Park, Calif.-based drug developer, withdrew its $67.5 million IPO registration papers yesterday. The company had received approximately $30 million in venture funding from such firms as Alta Partners, Maverick Capital and Sutter Hill Ventures. As part of a $28 million deal in May of 2001, Corcept received a post-money valuation of around $113 million.

CardioOptics Inc., a Boulkder, Colo.-based medical device company focused on a technology that allows physicians to see directly through blood, announced that it has raised an additional $1.5 million in its first round of financing for a total of $4.5 million. This round has been led by Cardinal Partners and Sequel Partners, while Primus Venture Partners also participated.

Milestone Merchant Partners LLC announced that Bruce Goldstein and Brian Kaufman have joined the firm as Managing Directors. The two will contribute to the further development and management of the firm’s bank & thrift practice under its broker-dealer, Milestone Advisors, LLC. Goldstein and Kaufman both have significant industry experience, having formerly worked together for Keefe, Bruyette & Woods Inc. and Sandler, O’Neill & Partners LP. Mr. Goldstein worked with Keefe from 1997 through 2001 where, as Senior Vice President, he coordinated the private equity sales group and also worked as a sales-analyst for the firm’s Financial Strategies Team. Mr. Goldstein was previously Managing Director of the Portfolio Analytics unit within Sandler O’Neill’s Fixed Income Department.

Dow Jones is reporting that Kohlberg Kravis Roberts & Co. is in talks to sell a stake in its business to the Washington State Investment Board and the Oregon Investment Council. The combined stakes would cost approximately $1 billion, although the report cautions that negotiations are at a very early stage.
News From Thursday 10/3
HyperRoll Inc., a Santa Clara, Calif.-based provider of high-speed, high-performance aggregation and analytics engine for the world’s leading database systems, announced today that it has completed a $12.5 million Series B financing led by Sequoia Capital and Greylock. Vertex Venture Capital also participated in the financing round, as well as existing HyperRoll investors Microdent Ventures and Denali Ventures. Additional funds will be used to accelerate sales and marketing activities in a market where the company already has customers and exceptional results.

eSilicon Corp., a Sunnyvale, Calif.-based fabless custom chip company, today announced that it has secured $10 million in additional private financing. Including this recent round of funding, eSilicon(TM) has raised $52 million since March of 2000, when the company was founded. Crosspoint Venture Partners, TPG Ventures, and Fremont Ventures are the investors.

SpeechVantage, a Horhsam, Penn.-based end-to-end integrator of speech applications and services, today announced an investment from PA Early Stage, a family of venture funds that makes investments in technology-based companies. The company also announced the appointment of four key executives who will be responsible for capitalizing on the speech technology market opportunity, increasing overall awareness of speechvantage and growing the existing portfolio of packaged applications.

Rockwood Equity Partners LLC on Tuesday completed an all-leverage acquisition of Camfire Inc.‘s military heater division. The senior debt was provided by Huntington National Bank, which recently agreed to a revised credit agreement with Rockwood. Terms of the deal were unavailable at press time.

Thayer Capital Partners announced today its acquisition of Sunburst Technologydivision of Houghton Mifflin Co. and a leading supplier of educational materials to elementary and secondary schools in the United States and Canada.

VCampus Corp. (Nasdaq:VCMP), a Reston, Va.-based provider of end-to-end, web-based e-Learning solutions, today announced that effective September 30, 2002 it completed a $1 million private equity placement through an offering of preferred stock and warrants.

Workshare Technology, a San Francisco-based document content collaboration software provider, today announced that it received a 2.9 million Pounds Sterling investment from Quester.

Xaware Inc., a Colorado Springs, Colo.-based provider of XML-based information exchange and data integration, has secured a funding package of $2.1 million. The capital infusion is a Series-A round of funding led by ITU Ventures and including Gefinor Ventures, new XAware Chief Executive Officer Bill Miller and former Sun Microsystems executive Janpieter Scheerder.

Dow Jones is reporting that The European Union Commission Wednesday approved the acquisition of U.K.-based auto repair chain Kwik-Fit Holdings Ltd. by private equity firm CVC Capital Partners (U.CVC).

IPO.com is reporting that Dovebid Inc. has postponed its $54 million IPO. The Foster City, Calif.-based online auctioneer – which withdrew an earlier IPO offering — has received venture funding from such firms as Mayfield, Softbank, Fremont Partners, Texas Pacific Group and Yahoo.

News From Wednesday 10/2
The Carlyle Group took a break from its buyout activities to hold a $600 million final close on its second U.S. venture capital fund, Carlyle Venture Partner II LP. The fund was originally launched in late 2000 with a $750 million target capitalization, and held a $242 million first close in April of 2001. It is the largest venture capital fund raised so far in 2002. No limited partner information was available by press time, except that a majority of the buyers were institutional investors based in North America and Europe. The fund has already invested approximately $117 million in 12 companies in sectors that include software, specialty semiconductors, storage, security, communications and health-care technology. Carlyle Venture Partners I, which closed on $254 million in 1997, is 90% invested and will use its remaining capital for follow-on rounds within its portfolio.

MicroMed Technology Inc., a Houston-based cardiac medical device company, announced today that it has raised $23 million in a private placement of its Series D Preferred Stock. Existing investors participating in the round included Essex Woodlands Health Ventures, Charterhouse Group International, Oxford BioScience Partners and Schroder Ventures Life Sciences. New investors participating in the round included Mitsui & Co. Venture Partners, C.E. Unterberg, Towbin Private Equity Partners II, and Datascope Corp. C.E. Unterberg Towbin also represented the company as placement agent for a portion of the financing.

ArcLight Capital Partners LLC, a Boston-based private equity firm, today announced the final closing of its $950 million debut fund, ArcLight Energy Partners Fund I LP. ArcLight established the fund to capitalize on attractive investment opportunities in the rapidly evolving power, utility, and energy industry. The Fund attracted more than 20 institutional investors, including John Hancock Life Insurance Company, WestLB AG, Stanford University, and CDP Capital-Americas, a member of CDP Capital. Lehman Brothers served as global placement agent.

Progress-Putnam Lovell Advisors LLC announced an investment under the California Public Employees’ Retirement System Manager Development Program (CalPERS MDP). The CalPERS MDP is making an equity investment in Smith Graham & Co. Investment Advisors L.P. (Smith Graham), one of the nation’s largest African American-owned money management firms, specializing in domestic and global fixed-income assets. CalPERS MDP has also agreed to allocate to Smith Graham $100 million in assets to manage in Smith Graham’s first Large-Cap Equity mandate.

Pasadena Capital Partners opened shop yesterday to lead control equity investments in small middle-market buyouts, with an emphasis on Southern California-based companies. The new firm is the brainchild of Gregory Annick, formerly a partner at Leonard Green & Partners LP. Annick initially plans to lead stand-alone investments while raising a middle-market buyout fund.

Bway Corp., an Atlanta-based maker of steel containers, has agreed to be acquired by Kelso & Co for a total value of $330 million, $155 million of which is equity. Company management is also reinvesting as part of the deal, which is expected to close during the first quarter of next year.

Apex Learning Inc., a Bellevue, Wash.-based provider of online courses and instructional materials to high schools, today announced it has secured an additional $7.4 million in financing from Warburg Pincus, which gives Warburg a majority interest. Earlier this year, Warburg Pincus purchased outstanding shares in the company held by Paul Allen, Vulcan Inc., Maveron LLC and Kaplan Inc.
News From Tuesday 10/1
NetLogic Microsystems Inc., a Mountain View, Calif.-based developer of network data plane packet classification and forwarding solutions, today announced it has secured $32 million from new corporate investors, including Mitsubishi International Corp. This brings total investment in the company to $90 million from key venture capitalists, private and corporate investors.

RF Micro Devices Inc. (Nasdaq: RFMD) and Jazz Semiconductor yesterday announced they have agreed to enter into a strategic relationship for silicon manufacturing and development. The two companies also announced that RFMD has agreed to invest $60 million in Jazz for a minority equity position in the company.

Portfolio Advisors LLC announced that it has been selected by the Pennsylvania Public School Employees’ Retirement System (PSERS), to provide investment advisory and administrative services with regard to the Retirement System’s $6 billion alternative investment portfolio.

De Novo Ventures, a venture capital firm focused on the life sciences industry, announced today the addition of Jay Watkins as its fifth managing director. Watkins will be responsible for identifying new investment opportunities in medical technology companies and supporting De Novo’s current portfolio companies. Most recently, Watkins was a vice president of Guidant Corporation and president of Compass, Guidant’s corporate business development and new ventures group.

DigitalNet Inc., a private enterprise network solutions company backed by GTCR Golder Rauner LLC, today announced that it has entered into a definitive agreement to acquire Getronics Government Solutions (GGS) from a subsidiary of GetronicsNV. The transaction is valued at approximately $223 million and is expected to close in November following regulatory approval. DigitalNet will initially focus on delivering enterprise network solutions to the U.S. Government.

Onward Healthcare (OH), a Norwalk, Conn.-based provider of interim staffing services to health-care facilities, today announced that it has partnered with Welsh, Carson, Anderson & Stowe (WCAS). WCAS, which specializes in health-care-related enterprises, has committed $50 million of equity financing to the company.

Permeo Technologies Inc., a Dallas-based creator of an integrated platform that completely secures all business applications, announced today that it has secured its second round of private financing from Austin Ventures.

Opus Media Group Inc., (OTCBB:OPUS), formerly ID Medical.com Inc. (former OTCBB stock symbol:IDMD), announced today that it has retained an exclusive financial advisor to assist Opus Media in raising up to $35 million, primarily for the funding of a joint business venture to form a record label with a high-profile multi-media entertainer.

Bluefly Inc. (NASDAQ SmallCap: BFLY), an e-tailer of designer brands at discount prices, announced today that affiliates of Soros Private Equity Partners had invested an additional $3 million in the company. As a result of the financing, Soros’ stake in Bluefly increased from approximately 83% to approximately 87% (excluding the effect of any conversion of debt purchased by Soros in this round) of the company’s outstanding equity.

Register.com Inc. (NASDAQ: RCOM) announced today that Mitchell I. Quain, a Director at the Company, has been appointed Chairman of the Board, effective September 29, 2002. Quain has served as a Director for Register.com since April 2001 and is a Principal at Charterhouse Group, a private equity firm.

PicoChip Designs Ltd., a UK provider of flexible wireless solutions for next generation telecom systems, has appointed Rupert Baines as Vice President Marketing. Baines, a 15-year industry veteran with broad international experience will lead the market introduction of PicoChip’s picoArray technology. He joins from Pond Venture Partners, one of the venture capital firms backing picoChip, and will be responsible for product management and marketing.

Questor Management Co., JPMorgan Partners, Private Equity Partners SPA and funds managed by a subsidiary of American International Group (AIG) have received necessary regulatory approvals and have completed their acquisition of the aluminum automotive components business of Fiat SPA’s Teksid unit.

Reuters is reporting that ArcLight Partners has raised $950 million to for a private equity fund dedicated to the U.S. power sector.
News From Monday 9/30

A pair of venture capitalists surprised the Boston sports world last Friday afternoon by acquiring the Boston Celtics for a record-high price of $360 million. Wyc Grousbeck, a general partner with Highland Capital Partners, and Stephen Pagliuca, a managing director with Bain Capital, led the deal. The purchase has nothing to do with the men’s investment firms, and Grousbeck has already announced an immediate leave of absence from his day job.

Overture Networks, a Research Triangle Park, N.C.-based developer of multi-service products that enables carriers to deliver voice and data services over metro Ethernet/IP networks, announced today the completion of its $15 million second round of financing. The round was led by new investor Morgenthaler Ventures and also includes first time investments from Armada Ventures and Intersouth Partners. Gray Ventures and other existing investors also participated in the round. PE Week subscribers can read more about this news in the protected Deal News section of www.PrivateEquityWeek.com.

Inxight closed its Series D round of financing today with $22 million. The deal was led by VantagePoint Venture Partners. Other participating investors include Reed Elsevier, an information provider, and prior Inxight investors Dresdner Kleinwort Wasserstein and Deutsche Bank. PE Week subscribers can read more about this news in the protected Deal News section of www.PrivateEquityWeek.com.

Relicore Inc., the leading provider of automated discovery, tracking, and dependency mapping solutions for managing complex enterprise application infrastructures, today announced that it has secured an additional $14 million in a second round of equity financing led by a new top-tier investor, Matrix Partners, with participation from original investors including Highland Capital Partners. PE Week subscribers can read more about this news in the protected Deal News section of www.PrivateEquityWeek.com.

BridgeWave Communications Inc., a Santa Clara, Calif.-based provider of MEMS/MST processes to semiconductor systems design, today announced that it has received $4.75 million in a Series D financing round to fund its BridgeWave Technologies business unit, chartered with delivering products based on these designs. West STEAG Partners, a global leader in funding electronics, optics, and MEMS companies, led the current round of financing, joined by the leaders of BridgeWave’s previous rounds, Jerusalem Venture Partners and MKS Ventures.

Advanced Technology Ventures today announced that former ACT Medical CEO Stuart Randle has joined ATV as an Entrepreneur-in-Residence (EIR) in the firm’s healthcare practice. With fifteen years of experience leading innovative product launches and business development efforts in the medical device industry, Randle is charged with identifying, creating, and leading a new medical device company as part of ATV’s EIR program.

Hynomics Corp., a Kirkland, Wash.-based software company, announced that it has closed $9.75 million in a first round venture financing led by Frazier Technology Ventures, Ignition Partners, and Techno Venture Management.

E5 Systems Inc., a Boston-based software provider, raised $10 million in a Series A funding led by a $4 million commitment from Bain Capital Ventures. PE Week subscribers can read more about this news in the protected Deal News of www.PrivateEquityWeek.com.

Laszlo Systems, a San Francisco-based emerging provider of innovative server software enabling the next generation of Web applications, today announced that it has raised $9 million in venture capital. General Catalyst Partners and Sofinnova Ventures led the round. The financing will continue to fund the company’s growth and further strengthen Laszlo’s position as it prepares to bring the next phase of rich Internet applications to market. Laszlo’s technology enables companies to deliver more responsive applications with a radically improved user experience.

Carlyle Group has agreed to acquire Invensys’ Rexnord business for a net amount of $880 million. Rexnord is involved in power transmission components.

Pequot Capital Management Inc. today announced that Harold D. Kahn has joined the firm as a Principal, Operations, responsible for all non-investment related activities of Pequot Ventures, the direct investment arm of PCM. Prior to joining Pequot, Kahn was the Global Chief Financial Officer at Zurich Scudder Investments Inc. Previously, he held a number of leadership roles as a Partner with PricewaterhouseCoopers, having joined the legacy firm of Price Waterhouse in 1977.

The European Venture Capital Association has released its second quarter investment and fund-raising figures. For a complete breakdown, go to: www.EVCA.org

Potentia Power Systems, an Ottowa-based fabless semiconductor company, today announced it has secured $US 12M in second round financing, and has appointed former Conexant executive Luke Smith as President and Chief Executive Officer. The funding round includes original seed investors VenGrowth Capital Partners of Toronto, Ontario, and Kodiak Venture Partners of Waltham, Massachusetts, as well as an initial investment by Teachers’ Merchant Bank, the private equity arm of the Ontario Teachers Pension Plan Board. The investment funds the development of Potentia’s integrated circuits that will enable more effective distributed power architectures on complex circuit boards.

Pentech Ventures, the Glasgow-based early stage technology venture capital company, has announced the close of its first fund following an investment commitment of over £5m from the European Investment Fund (EIF), taking total funds under management to £22.5 million. Pentech has significantly exceeded the original targets set on the launch of the fund in July 2001.

Reuters is reporting that Unilever has decided to invest 170 million euros ($166.3 million) in venture capital funds to build business opportunities. The company said it had committed 100 million euros to newly created Langholm Capital Partners Fund, and also would invest up to 40 million pounds over three years in a business development fund called Unilever Ventures.

AsiaPort Daily News is reporting that Softbank Investment International (Strategic) has reached an agreement with Shenzhen Capital Group Co to form a 50-50 joint-venture. They plan to raise a venture fund of 200 million yuan (US$24.1 million). The venture will operate as an investment fund and target innovation companies in China in the field of biological technology, information technology and new materials.

The Financial News is reporting that Nesbic has cut its CTe fund size from 260 million Euros to $142.5 million Euros.
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