PE Week Wire — Friday 10/11

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Tempur World Inc., a Lexington, Ky.-based mattress and pillow producer, has been acquired for approximately $350 million by TA Associates and Friedman, Fleischer & Lowe. Equity capital for the purchase will be provided approximately $95 million by TA and $50 million by FFL. In addition, TA will provide $35 million of a $50 million subordinated debt issuance. A senior credit facility of $170 million will be in place for the closing, scheduled to occur by early November 2002.

Quantum Energy Partners announced the final closing of Quantum Energy Partners II LP with total capital commitments of $225 million. Quantum Energy Partners will focus on making $10 to $40 million corporate equity investments, primarily in early-stage North American oil and gas companies focused on building their reserve base through acquisitions, exploitation and exploration, and will also consider opportunities in the mid-stream and service sectors. Quantum Energy Partners will target investments in companies managed by proven entrepreneurs, which possess significant growth opportunities, have a competitive advantage within a well-defined segment of the industry and are focused on building companies or assets that will be attractive acquisition candidates for larger energy companies.

European Union antitrust regulators today announced that they have approved the $2.26 billion sale of Diageo PLC’s Burger King Corp. to a private equity consortium of Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners. The deal had been approved by U.S. regulators in August, but there had been some questions as to whether European officials would be uncomfortable with Burger King being partially owned by Bain, which also owns a stake in Domino’s Pizza. Despite clearing this latest hurdle, however, some UK press reports this morning questioned whether or not the existing buyers will be able to raise the necessary cash. If it fails, expect former bidders like Thomas H. Lee or Madison Dearborn Partners to take another shot at the fast food giant.

Captive Capital Corp. has closed its Series B round of venture funding, and changed its name from eMarket Capital Inc. All of the King of Prussia, Penn.-based company’s original backers, including lead investor Internet Capital Group participated.

Riviera Marine, an Australian luxury boat builder, has been sold in a $180 million management buyout to company management and Gresham Private Equity.
News From Thursday 10/10
Alteer Corp., an Irvine, Calif.-based provider of integrated software applications for medical practices, today announced the completion of $9.4 million in financing, which was led by Skyline Ventures and also included Sanderling Ventures. Previous investors, including Edgewater Private Equity, Bluestem Capital and Kingsbury Capital Partners, participated in the financing. As part of the transaction, Stephen J. Sullivan, M.D. and John Freund from Skyline Ventures, and Tim Wollaeger from Sanderling, have joined the Alteer board of directors.

CRS Retail Systems Inc., a Newburgh, N.Y.-based provider of retail analystics software, today announced it has acquired Salt Lake City-based Found Inc. In conjunction with the acquisition, CRS has received a growth equity investment from Accel-KKR, the lead investor in Found. Accel-KKR is a technology focused private equity firm founded in 2000 by Accel Partners and Kohlberg Kravis Roberts & Co.

Spatial Wireless has raised an additional $10 million in funding from its current investors including Dali, Hook Partners, Austin Ventures, Sequoia Capital and Genesis Campus. This funding, combined with rounds of investment in August 2001 and January 2002, brings the total institutional capital invested in Richardson, Texas-based Spatial Wireless to $30.9 million. The new funding will be used for further market expansion and building a world-class customer support organization

CapitalStream, a Seattle-based provider of business and commercial credit automation technology, has acquired WiredCapital, a provider of enterprise automation software solutions. Along with the acquisition, CapitalStream has raised an additional $10 million total in equity funding from its current investors: FTVentures, Banc of America, Polaris Venture Partners, Voyager Capital, Merrill Lynch KECALP, Babcock & Brown, and The Benaroya Co. Also joining the investment round is Mobius Venture Capital, WiredCapital’s venture capital partner. Mobius will take a seat on the CapitalStream board of directors along with CapitalStream’s current board members.

EXIT41, an Andover, Mass.-based provider of point-of-sale (POS) software and information solutions to top Quick-Serve chains, has completed a $14.2 million Series C private placement financing. Investors include Thomas Weisel Venture Partners and Fidelity Investments.

Green Manning & Bunch announced it has hired Thomas J. Fencl as a managing director to open the company’s first Arizona office. Fencl recently headed up business development for Banc of America Securities in the Southwest and Plains States markets. He specialized in middle market leveraged transactions including acquisitions, buyouts and recapitalizations.

DataCore Software, a Ft. Lauderdale, Fla.-based provider of enterprise-class, open storage networking software, today announced the addition of Edwin Kania, senior managing director and chairman of Flagship Ventures, to DataCore’s board of directors.

Oplink Communications Inc. (Nasdaq:OPLK) today announced that it has named Allen Hsu as a member of its board of directors. Since 1998, Hsu has served as the chairman of Paclink Management Corp., a venture capital management firm and an investor in Oplink

The Weatherhead School of Management at Case Western Reserve University today announced the launch of a new MBA specialization in Bioscience Entrepreneurship–one of the first such programs in the country.

3Com Corp. has reported net Q1 losses of $11.5 million due to the sale and value adjustments of venture capital fund investments. The Santa clara, Calif.-based-based firm said it sold stakes in several VC funds during the quarter for a total of $4.4 milliom, while making $1.2 million of new investments and new commitments to invest another $24.3 million. Of those promised commitments, approximately $7.1 million is expected to be called down over the next year.

Celtic House International has raised approximately $80 million for a new early-stage tech venture fund. Investors include CPP Investment Board, Ontario Teachers’ Pension Plan Board, Ontario Municipal Employees Retirement System, Paul Capital Partners and Mr. Matthews.

Direct Insite Corp. (NASDAQ: DIRI) announced today that Metropolitan Venture Partners (MetVP) has agreed to be the sole investor in a private placement of $2 million in the form of convertible Series A Preferred shares.
News From Wednesday 10/9
The Jordan Co. recently closed its first private equity fund with $1.5 billion in committed capital. The firm has been making buyout investments for well over a decade, but most of that has been through a closed-end investment trust listed on the London Stock Exchange. This latest effort – named The Resolute Fund – had a $1 billion target and received approximately $3 billion worth of interest before being capped at $1.5 billion. For more on this story, pick up the next print edition of Buyouts (www.BuyoutsNewsletter.com).

Highland Capital Partners today announced that Jean-Luc Abaziou, former President and Chief Executive Officer of Torrent Networking, has joined Highland as a Venture Partner. Abaziou will specialize in communications and information technology investments, with a particular focus on network infrastructure and wireless opportunities in the mid-Atlantic region.

The Carlyle Group today announced that it has invested JPY200 million (approximately $1.6 million) in Fab Solutions Com. Ltd., a Japanese technology spinout from NEC Corporation. Fab Solutions develops next generation wafer inspection and evaluation tools for advanced semiconductor manufacturing processes. This is Carlyle’s third venture capital investment in Japan followed by a September 2001 investment in eAccess Ltd., a broadband access provider, and a December 2001 investment in Nitride Semiconductors Co. Ltd., a manufacturer of blue and ultraviolet LEDs.

Baring Private Equity Partners today announced that its Asian division, Baring Private Equity Partners Asia, successfully completed the final closing of the Baring Asia Private Equity Fund II LP at $257 million. The Fund will invest mainly in the North Asian markets of Hong Kong, Taiwan, China, Korea and Japan, as well as in India and Singapore. The fund is one of the largest private equity funds raised in the region this year. The Fund will target to purchase Asian divisions of US and European multinationals downsizing and divesting non-core overseas assets.

Carnegie Hill Venture Partners (CHVP) today announced that it has successfully closed CHVP Founders Fund I, a $10 million exchange fund organized to provide diversification and investment advantages to founders of successful private companies. The Fund provides founders of VC-backed information technology and life science companies the opportunity to participate with founders shares in a diversified pool of companies. CHVP Founders Fund I includes companies in enterprise software, semiconductors, bio-simulation, on-line marketplaces, network management and data protection.

AudioAudit, a Paramus, N.J.-based provider of patented broadcast verification technology products for the advertising, cable and broadcast industries, today announced $9 million in Series A financing. Polaris Venture Partners, the lead investor, was joined by Ridgewood Capital, and other private investors. Media-industry veteran and Managing General Partner of Polaris Venture Partners, Alan Spoon, and technology-veteran Ridgewood Capital Venture Partner Lou Mazzucchelli will join Audio Audit’s Board of Directors.

Wellington Partners is investing in content security provider Cobion together with Sofinnova Partners of France. During the initial round of funding, the two companies are investing a total of six million euros in two tranches. Following intensive development work, Kassel-based Cobion AG now possesses unrivaled technologies for fully automated identification and filtering of text and image content. This means that Cobion is able to offer both private- and public-sector organizations effective protection against unwanted or illegal Internet, e-mail and intranet content.

Silicon Valley Bank, a wholly owned subsidiary of Silicon Valley Bancshares (SIVB), today announced that Daniel Allred has joined its Research Triangle office in Durham, North Carolina. Previously serving as VP of Strategic Development with the local Council For Entrepreneurial Development, Allred will leverage his relationships and expertise in the local entrepreneurial and VC community to provide financing and banking services to the North Carolina technology and life science industries.

M Group Inc., a Birmingham, Mich.-based venture firm, invested $1.85 million in a Series D round of funding for portfolio company MIG Email Marketing. The financing is in the form of Senior Subordinated Convertible Notes, and was led by M Group and included other existing and new investors. The financing is expected to take the issuer to profitability in early 2003.

The Deal is reporting that Stamford, Conn.-based buyout shop Saunders Karp & Megrue has reduced the size of its latest fund from $943 million down to $735 million. This is the first U.S.-based buyout fund known to have reduced its fund size, although others like TA Associates have been reducing management fees. According to performance figures PE Week obtained last week from UTIMCO, the 2000 fund is approximately 25% drawn down, and has been written down by just over 12 percent.
News From Tuesday 10/8
nCircle Network Security Inc., an Orlando, Fla.-based network security solutions provider, today announced the closing of its Series C round of financing, led by Menlo Ventures. The new $20 million Series C funding round brings the total amount of equity investment in nCircle to over $34 million. The round also included participation from Visa International as well as existing investors Alta Partners, BV Capital, Guide Ventures, Industry Ventures, Court Square Ventures and Tall Oaks Capital.

Hawkes Peers & Co. and Co-Capital Partners have jointly formed a Fund Merger Advisory Practice focused on supporting the rapidly growing base of venture capital, corporate and buyout funds looking for advice in assessing the possibility of merging, buying or selling their funds without adversely impacting the underlying portfolio of companies, limited partners or the general partners managing the funds. Leading this practice are Helen MacKenzie, Managing Director of Co-Capital Partners, and Alex Brecher, Managing Director at Hawkes Peers.

Nomadix Inc., a Westlake, Calif.-based supplier of mobility-enhancing networking products, announced yesterday that it has completed its expansion round of financing, totaling approximately $16 million. Participants in this financing included Mellon Ventures, ITX International Equity and Keystone Venture Capital, Avtech Ventures, Intel Communication Fund and Smart Technology Ventures.

BigBand Networks Inc., a Redwood City, Calif.-based provider of broadband multimedia routing systems for broadcast television and advanced services, today announced an investment from AOL Time Warner Ventures. This investment brings the total amount of venture capital raised by BigBand Networks to $60 million. In addition to AOL Time Warner Ventures, the company’s investors include Series C round leader Charles River Ventures, Redpoint Ventures, Pilot House Ventures, Cedar Fund, Evergreen Investments, CommVest and Lauder Partners.

IntruVert Networks , a San Jose, Calif.-based developer of next generation intrusion detection systems (IDS), today announced it has raised $15.5 million in Series C financing. The company has raised approximately $36 million in three rounds of financing to date. Worldview Technology Partners led this round with ComVentures and Trinity Ventures also participating.

FundsXpress Financial Network Inc., an Austin, Texas-based provider of online financial services, today received $5 million as part of an overall $10 million equity financing plan from Warburg Pincus and The Texas Growth Fund. At the same time, the company announced the appointment of Brent Warrington as chief executive officer. This investment allows FundsXpress to continue to expand its customer base, explore new partnerships and add new products and services to support its client base. John Burns, founder and former chief executive officer will serve as vice-chairman of the board of directors.

Léman Capital, via the private equity fund BVP Europe LP,, has backed the add-on acquisition of the aluminium high pressure die casting (HPDC) foundry divested by PSA Peugeot Citroen. The acquisition comes as an add-on to its platform involved in Automotive HPDC, MB Automotive (formerly known as Manzoni Bouchot). Senior debt to support the transaction was raised by the Royal Bank of Scotland, the platform’s current banking partner.

Innovation Philadelphia (IP), the public/private partnership dedicated to enhancing the global innovation economy of Philadelphia through technological leadership, today received a $442,500 investment from the U.S. Department of Commerce’s Economic Development Administration. This federal investment will initiate a coordinated technology based, cluster driven, economic development strategy for the Greater Philadelphia Region. It will have a focus on new approaches, relationships, methods and technologies for the new knowledge economy.

Deutsche Telekom said yesterday that it has retained three bidders for final negotiations in the sale of its television cable networks. Although the German telecom company did not specify the bidders, some German press reports indicate they are syndicates made up of: Goldman Sachs and Apax Partners; Liberty Media, Apollo Management and Blackstone Group; and BC Partners with GMT.

Expansion, a Spanish newspaper, is reporting that the government of Spain may block the sale of utility Iberdrola‘s stake in Red Electrica Espana SA (REE), the owner of most of Spain’s high-voltage electricity cable network, to U.S. private equity firm CVC Capital Partners. The $577 million deal was agreed to in July, but the government – which has regulatory approval over the transaction – wants REE to buy Iberdrola’s 10% stake in the network.
News From Monday 10/7
Broadbus Technologies Inc., a Boxborough, Mass.-based provider of video-on-demand (VOD) server systems for the cable television industry, today announced the closing of its Series A-1 round of financing, raising more than $12 million. Leading the round are both Battery Ventures and Charles River Ventures. Comcast Interactive Capital, Wolf Ventures and several other private investors also participated. Broadbus will use the funds to fully execute on its business plan and facilitate the strategic product launch of its VOD server system. Santo Politi, general partner with Charles River Ventures and Todd Dagres, general partner with Battery Ventures will join the Company’s board of directors. For more on this story, PE Week subscribers can go to the protected Deal News section of www.PrivateEquityWeek.com.

Seranoa Networks today announced that it has raised $15.75 million from St. Paul Ventures, YankeeTek Ventures, Advent International, FA Technology Ventures, Schoffstall Ventures, and several private investors. Seranoa is developing a new category of networking product, the IP edge concentrator, a subscriber aggregation product that economically enhances the capacity, performance and availability of network service providers’ IP communication services by building on existing infrastructure investments.

Interlink Networks, an Ann Arbor, Mich.-based provider of network security and access control software, announced today that it has received $7.5 million in a Series B financing led by Duchossois TECnology Partners, and including Arbor Partners, Intel Capital, M Group, and Siemens Venture Capital.

Erik Krieger, chairman and co-founder of Pacific Crest Securities, announced he is transitioning from Pacific Crest to form Riverlake Partners LLC, a new private equity fund. Krieger, who has spent much of his 17-year financial career advising corporations on mergers and acquisitions while helping build Pacific Crest, will be the managing general partner of Riverlake. He will continue his involvement with Pacific Crest as an equity owner and member of its board of directors. With initial capital commitments of several million dollars from general and limited partners in place, Riverlake expects to raise a minimum of $25 million for its first fund.

Techno Venture Management, the German-U.S. venture capital firm, announced the promotion of Michael J. Nowak to General Partner. Previously he was Principal at TVM responsible for investments in the information & communications technologies field.

Vormetric Inc., a San Jose, Calif.-based provider of data-layer security solutions, today announced that the company has received $10 million in its second-round of venture capital financing. The round was lead by Sigma Partners, a top-tier technology venture capital firm, who was joined in the round by existing investors, Vanguard Ventures and QTV Capital.

American Capital Strategies Ltd. has invested $27 million in Academy Events Services LLC, one of the largest tent manufacturers, and a leading tent and accessories lessor for the special events equipment rental market. American Capital’s investment takes the form of a revolving loan facility, senior term loans, a senior subordinated loan with warrants, and preferred and common stock. Cambridge Capital Partners is the equity sponsor, and management is also investing in the equity. The transaction combines the assets of Academy Tent & Canvas Inc. and Event Technical Services Inc.

Ming Pao Daily, a Hong Kong newspaper, is reporting that telecom provider PCCW is hoping to receive between $128 million to $256 million for the sale of its yellow pages division. The report cites Carlyle Group and CVC as being among the bidders.

The Sunday Times has reported that the directors of UK jewelry chain Goldsmiths has raised approximately £75m to buy out leading shareholder Alchemy Partners, a private equity firm. The board secured the money from Bank of Scotland (BoS) and is preparing to open talks about acquiring a large part of Alchemy’s stake. 
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