PE Week Wire — Friday 11/14

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General Atlantic Partners has agreed to invest $125 million for a minority position in Archipelago Holdings LLC, a Chicago-based all-electronic stock exchange operator. Additional terms of the investment were not disclosed, except that Bill Ford of General Atlantic will join the Archipelago board of managers.

Madison Dearborn Partners has agreed to acquire Oak Brook, Ill.-based Great Lakes Dredge & Dock Corp. from majority owner Vectura Holding Co. LLC, a portfolio company of Citigroup Venture Capital Ltd. The transaction is worth $340 million in cash, and is expected to close by year-end.

Peptor Ltd., a venture-backed biopharma company focused on diabetes and other autoimmune diseases, has agreed to merge with DeveloGen AG, a venture-backed biopharma company focused on diabetes and obesity. The merged company will have its headquarters in Germany and will be known as DeveloGen AG. The company will keep the R&D operation of Peptor in Israel and maintain the professional team for future pre-clinical and clinical development. As part of the merger, the company has received an undisclosed investment led by Techno Venture Management. Other participating investors include Nomura, DVC Deutsche Venture Capital, Global Life Science Ventures and Dansk Kapital Anlaeg.

Ralcorp Holdings Inc. (NYSE: RAH) has agreed to pay $287.5 million in cash to acquire Bakery Chef Inc., a Westmont, Ill.-based producer of frozen griddle products and frozen pre-bake biscuits. Bakery Chef is currently owned by an investment group led by private equity firm Wind Point Partners.

Doros Platika will leave his scientific advisor role at MPM Capital, and become CEO of the Pittsburgh Life Sciences Greenhouse, an investment partnership founded by the University of Pittsburgh, Carnegie Mellon University, UPMC Health System, the Commonwealth of Pennsylvania and its regional foundation community. Platika succeeds Donald Smith, who had served as interim CEO since founding CEO Dennis Yablonsky left in January to become Pennsylvania’s Secretary of the Department of Community and Economic Development.

LECG Corp., an Emeryville, Calif.-based provider of economics consulting services, has priced 7.5 million shares at $17 per share, for a total IPO take of $127.5 million. The company, which will trade on the Nasdaq under ticker symbol XPRT, is minority-owned by buyout firm Thoma Cressey Equity Partners.

Myrio Corp., a Kirkland, Wash.-based provider of software, content management and integration services for Internet Protocol based video services, has raised $9 million in new venture funding. Siemens Venture Capital led the round, and was joined by return backers Ridgewood Capital, NeoCarta Ventures and Alexander Hutton Venture Partners.

Vesta Corp., a Portland, Ore.-based provider of stored value recharge solutions (i.e. prepaid telecom services), has received $20 million in new funding from Oak Investment Partners.

Carrier Access Corp. (Nasdaq: CACS) has agreed to acquire Paragon Networks International Inc., a Brookfield, Conn.-based provider of wireless transport solutions to mobile wireless operators. No financial terms were disclosed on the deal, which is expected to close in the first quarter of 2004. Paragon has raised around $38 million in venture capital funding since its 1985 inception, including a $12.5 million inception in late 2001 at a post-money valuation of approximately $40 million. Investors included Axiom Venture Partners, Culinane & Donnelly Venture Partners and Granite Ventures.

Outsource Partners International Inc.,, a New York-based outsourcer of finance and accounting functions, has raised $20 million in new venture funding Trident Capital led the deal with an $8 million infusion.

Daniel Regis, a managing director of Bellevue, Wash.-based venture firm Digital Partners, has joined the board of directors at Columbia Banking System, the parent company of Columbia Bank.

Enquiro Search Solutions Inc., a Kelowna, Canada-based Internet marketing company, has received a $750,000 investment from the Altura Growth Fund.
Sanarus Medical Inc., a Pleasanton, Calif.-based medical device company focused on minimally-invasive diagnosis and treatment of breast tumors, has raised $19.12 million in Series C funding. Alta Partners led the deal, and was joined by fellow new investor Channel Medical Partners. Return backers included  U.S. Venture Partners, Forward Ventures, Federated Kaufmann Fund and Technology Funding.  

The Center from Health Promotion Inc., a Seattle-based provider of tobacco cessation and weight management solutions, has raised $10 million in funding from Polaris Venture Partners, Three Arch Partners and Kaiser Permanente. The cash is being used to fund CHP’s spinout from former parent organization Group Health Cooperative, which will retain a minority equity position in CHP and will continue to use CHP services.   

Esmertec AG, a Zurich, Switzerland-based provider of Java solutions for mobile multimedia phones and embedded devices, has raised €23 million (approx. $27 million) in third-round funding. The deal was co-led by Earlybird Venture Capital, Partners Group and Sofinnova Partners. Also participating were BV Group Private Equity Berne, Quilvest Group, Rothschild Gestion, Invision AG, and Credit Lyonnais Private Equity Paris.   

Larry Schloss has resigned as global head and chairman of Credit Suisse First Boston Private Equity, according to an internal memo obtained by The Wall Street Journal. The move is expected to become effective in April.   

Grenax Broadcasting LLC has raised $3.1 million in Series A funding. Kansas City Equity Partners led the transaction, which will be used to acquire radio station WCFX-FM 95.3 in Mt. Pleasant, Michigan.   

The National Association of State Retirement Associations (NASRA) issued a letter to Ohio Gov. Taft last Friday, with a carbon copy to Ohio legislative leaders. At issue is NASRA’s objection to a potential piece of legislation (HB 227), that would restrict the pool of investment advisors and securities traders eligible to manage Ohio retirement system trust funds by requiring that 50% to 70% of such business arrang! ements be directed to companies located in Ohio.   

Linguagen Corp., a Cranbury, N.J.-based maker of ingredients used to improve the taste of food, beverages and pharmaceutical products, has received $10.2 million in Series A funding commitments. Investors include NJTC Venture Fund SBIC, Cargill Ventures, Danisco Venture A/S, DuPont Ventures, Aperture Venture Partners and RK Ventures Group.   

Hewlett-Packard (NYSE:HPQ) has agreed to acquire Persist Technologies Inc., a Pleasanton, Calif.-based provider of software designed for long-term storage and access of reference information. No deal terms were disclosed. Persist Technologies has raised around $12 million in venture funding, including a $1.5 million infusion in late 2002 at a post-money valuation of approximately $17 million. Investors included ArrowPath Venture Capital, Athena Ventures, ComVentures and Red Rock Ventures.   Oak Investment Partners was surprised by an unsolicited offer by Onyx Software Corp. (Nasdaq: ONXS) for Pivotal Corp. (Nasdaq: PVTL), which Oak had already agreed to acquire. Pivotal is now reviewing both offers, although Oak issued a press release today claiming that its “current all-cash offer is superior to the unsolicited stock-for-stock proposal from Onyx.”   

ReefEdge Networks Inc., a Ft. Lee, N.J.-based provider if wireless LAN systems for multi-site enterprises, has raised $13 million in new funding. Comcast Interactive led the deal, and was joined by return backers Bessemer Venture Partners, Columbia Capital, RRE Ventures, Allegra Partners, Ericsson Venture Partners and Saturn Venture Partners.   

Lightyear Capital has acquired Telmar Network Technology, an Irvine, Calif.-based remanufacturer and distributor of hardware technology to communications companies. No deal terms were disclosed.   

The Aurora Funds announced that Dr. William New has been named as the firm’s first entrepreneur-in-residence. Earlier this year, New joined Aurora as a special venture partner.   

Aspen Insurance Holdings Ltd., a Bermuda-based insurance provider, has filed to raise up to $209.5 million via an IPO on the NYSe under proposed ticker symbol AHL. The company will offer 9.524 million shares at a price range between $20 and $22 per share. Aspen’s principal existing shareholders include The Blackstone Group, Candover Partners Limited, Wellington Underwriting and Credit Suisse First Boston Private Equity.   

NetForensics Inc., an Edison, N.J.-based provider of security information management solutions, has raised $12 million in new funding led by Noruma.   

Marlin Business Services Corp., a Mt. Laurel, N.J.-based provider of equipment leasing services, has raised $61.6 million via an initial public offering on the Nasdaq under ticker symbol MRLN. The company priced 4.4 million shares at $14 per share, and finished its first day of trading up at $16.15 per share. The company had raised approximately $17 million in venture capital funding from Primus Venture Partners, Peachtree Equity Partners, ING Capital, Wachovia Capital Associates and Hampshire Equity Partners.   

Edison Schools shareholders have approved a merger agreement that will take the company private. The main equity sponsors are Liberty Partners and Christopher Whittle, Edison’s founder and CEO.    

Tessera Technologies Inc., a San Jose, Calif.-based provider of semiconductor packaging technologies, will begin trading on the Nasdaq today under ticker symbol TSRA. The company priced 7.5 million shares yesterday (4.35 million issued by company, 4.5 million issued by shareholders) at $13 per share in its initial public offering. The company has raised around $35 million in venture funding, including a $5.18 million infusion in 2000 at a post-money valuation of approximately $276 million. Investors include Apax Partners, Concord Partners, CSK Venture Capital, Investor AB, Landmark Partners and Tic! onderoga Capital.   

Claes Post has been named CEO of Gastrotech Pharma AG, a Copenhagen-based startup focused on the medical applications of gastrointestinal hormones. Over the past year, Post has served as a partner with Danske Lie Sciences, a venture capital fund within Danske Bank. In related news, Gastrotech Pharma has raised an undisclosed amount in a Series A funding round led by Nordic Biotech KS.   

The Deal is reporting that Research Partners has hired Arie Abecassis as a managing director of venture capital investments. Abecassis previously served as a director with Thomson Financial Ventures.   

The Irish Independent is reporting that Clashfern Holdings Ltd. founder and CEO Gerry McNamara has launched a €50 million (approx. $58.4 million) venture capital fund focused on opportunities in the environmental and energy sectors.   

Dow Jones is reporting that Simon Jennings has joined the investment team at Hermes Private Equity. He had been serving as an external consultant to Swiss and UK fund-of-funds.  

  Arsenal Digital Solutions Worldwide Inc., a Cary, N.C.-based provider of storage management services, has raised $11 million in private debt funding. The company now has raised a total of $86 million of combined equity and debt financing.  

Recruitmax, a Ponte Vedra Beach, Fla.-based provider of workforce management solutions, has raised $17.2 million in Series A funding. QuestMark Partners and Tudor Ventures co-led the deal, and were joined by Montagu Newhall Associates.   

MonoSphere Inc., a Redwood City, Calif.-based provider of automated storage software solutions, has raised $11.25 million in third-round funding. ComVentures led the deal, and was joined by return backers LightSpeed Venture Partners and Benchmark Capital. Monosphere has raised over $22 million in venture funding since its 2001 founding.   

HSBC Private Equity (Asia) Ltd. has held a $350 million interim closing on its fifth regional fund since the firm was founded in 1989. Participating limited partners included Colorado Public Employees Retirement Association and Railpen Investments (a.k.a. British Rail Pension Fund). Links Capital Group is the placement agent assisting in the fund raising.   

LinkedIn Ltd., a Mountain View, Calif.-based provider of professional networking tools for hiring managers, job seekers and professional service providers, has raised $4.7 million in Series A funding led by Sequoia Capital. LinkedIn is run by CEO Reid Hoffman, who co-founded SocialNet in 1997 and most recently served as executive vice president of PayPal.  

Austin Ventures has committed $50 million to launch an unnamed acquisition platform focused on the supply-chain outsourcing sector. The new effort will be led by Bill Razzouk, whose industry experience includes 13 years at Federal Express Corp.   

Burlington Industries Inc. completed the sale of its operating businesses to Mohawk Industries Inc. and private equity firm W.L. Ross & Co. The transaction was approved by the Bankruptcy Court as part of Burlington’s reorganization plan confirmed on October 31.   

Xinhua Financial Network Ltd., a China-based financial information and media company, has raised $20 million in new venture funding. Investors included Itochu Corp., Japan Asia Investment Co. and Nissay Capital.   

Richard Rémillard has been named the first executive director of the Canadian Venture Capital & Private Equity Associates (CVCA). Rémillard most recently served as president of RCG, an Ottawa-based management consulting firm specializing in business and policy issues in the financial services industry   

Digital Evolution Inc., a Santa Monica, Calif.-based provider of Web services management and security products, has raised $8 million in Series C funding. Redpoint Ventures and Mellon Ventures joined as new investors on the deal. Digital Evolution now has raised $28 million in venture funding since its 1998 founding.   

CenterBoard, a Pleasanton, Calif.-based provider of enterprise information integration solutions, has raised $6 million in Series A funding. Investors include Bay Partners, Woodside Fund and Siemens Venture Capital.   

M-Qube Inc., a Boston-based provider of mobile messaging services, has raised $8 million in second-round venture funding. Sigma Partners led the deal, and was joined by return backers General Catalyst Partners and Bain Capital Ventures.   BioStar Private Equity Fund, a Saginaw, Mich.-based venture fund focused on medical device companies, has held a first close on an undisclosed amount of committed capital.   

Milestone Merchant Partners has acquired Tile Industries Inc. from Illinois Tool Works Inc. subsidiary Premark International Inc. No deal terms were disclosed.   

Mike Ahearn, managing director of executive search firm Conley & Co., has been named to the board of directors at Affinnova Inc. Until last year, Ahearn was a recruiting partner with Charles River Ventures.   

Reuters is reporting that tomorrow will be the final day for private equity firms to submit bids for wax museum operator Madame Tussauds. The report plaims that Permira, BC Partners and Kohlberg, Kravis & Roberts are all expected to be making bids.  

The Boston Globe is reporting that Viacell Inc. has acquired Kourion Therapeutics AG, a German biotech firm that specializes in embryonic stem-cell research. No deal terms were disclosed. Kourion has raised over $18 million in venture funding from investors like MPM Capital. Viacell has raised over $80 million in venture funding, and currently is in registration for an IPO.

SolArc Inc., a Tulsa, Oklahoma-based provider of supply and trade management solutions for global commodities companies, has raised $25 million in funding from Technology Crossover Ventures. This represents SolArc’s first round of funding since being founded 12 years ago.   

Texas Pacific Group has agreed to acquire specialty chemicals maker Kraton Polymers Group for $770 million. The seller is private equity firm Ripplewood Holdings, which bought Houston, Texas-based Kraton from Royal Dutch/Shell Group in 2001 for around $520 million. The deal is expected to close by year-end.   

PhotonEx Corp., a Maynard, Mass.-based producer of optical networking equipment, has filed for Chapter 11 bankruptcy protection. The company had raised $178 million in venture capital funding, including an $80 million Series B deal in 2000 at a post-money valuation of around $447 million, and a $90 million Series C deal in late 2001 at a post-money valuation of approximately $214 million. Investors included 3i Group, Boston Millennia Partners, Castile Ventures, Comdisco Ventures, Essex Investment Management Co., Intel Capital, J.P. Morgan Capital, Matrix Partners, North Bridge Venture Partners, North Hill Ventures, Oak Investment Partners, The Photonics Fund and Silicon Valley BancVentures. PhotonEx’s bankruptcy lists just $10 million in remaining assets.   

Brazos Private Equity Partners LLC has acquired Cheddar’s Inc., a Dallas-based owner and operator of casual dining restaurants. No deal terms were disclosed.   

Skip Glass has joined Canaan Partners as a venture partner focused on infrastructure software and services. Most recently, Glass served as CEO of uRoam (f.k.a. Filanet), which was acquired by F5 Networks.   

Mimix Broadband Inc., a Houston, Texas-based fabless semiconductor company for wireless communications, has held a $1.3 million second close on its Series B funding round. The company had announced a $6.7 million first close in September, with investments from 3i and First Capital Group. Greg Carlisle, a managing director with Genifor Ventures, will take a board seat with Mimix as part of the most recent transaction.   

Stephen Knight has been named president of Fidelity Biosciences Group, a unit of Fidelity Investments that will oversee Fidelity’s private equity investing in biotechnology efforts. He has been president and chief operating officer of EPIX Medical Inc. (Nasdaq: EPIX) since November 1999, and will remain with the company until an NDA submission later this year.   

Motorola Inc. has agreed to acquire the assets of Xtreme Spectrum Inc., a Vienna, Va.-based provider of ultra-wideband (UWB) solutions for multimedia connectivity. The deal is expected to close within the week, although no financial terms were disclosed. Xtreme spectrum has raised over $38 million in venture funding since its 1998 inception, including an $11.5 million infusion in 2002 at a post-money valuation of approximately $73 million. Investors included Alliance Technology Ventures, Cisco Systems Inc., Delmag Ventures, Granite Ventures, Motorola Ventures, POD Holding and Novak Biddle Venture Partners.   

Kazuhiko Sunada has been named president and CEO of Itochu Technology Inc., the Santa Clara, Calif.-based business development and venture investment arm of Itochu Corp. Takahiro “Terry” Susaki, who has been CEO since 1999, remains on the board of directors and will assist in the transition. Sunada most recently served as general manager for strategy and financial planning in the IT & Telecom Division at Itochu Corp.   

Gold’s Gym International Inc., a portfolio company of private equity firm Brockway Moran & Partners, has acquired a seven-gym cluster in San Antonio, Texas, that previously operated under the Fitness Connection name.   

Austin Ventures has purchased a majority interest in Colonial Tax Compliance Co., an Atlanta-based consulting  and outsourcing sales & use tax compliance solutions firm. No deal terms were disclosed.   

Capital IQ Inc. has acquired Simplystocks Inc., an India-based provider of market data and outsourced financial research. The acquisition terms were not disclosed.   

Steven Mayer, a managing director of Cerberus Capital Management, has joined the board of directors at Acterna Corp.   

Arsenal Capital Partners has closed its previously announced acquisition of Rutherford Chemicals from Cambrex Corp. The transaction is valued at $65 million, which includes $55 million cash, a $2 million subordinated 12% interest bearing note payable in full in 5.5 years and an $8 million performance-based cash earn-out as certain future operating profit targets are achieved in each of the next three years.   

Roger Altman, chairman of Evercore Partners, yesterday announced a the launch of New Jobs for New York, an organization intended to accelerate efforts to retain and attract new investment and jobs in New York communities facing economic challenges. Chairing the group’s board will be Senator Hillary Clinton (D-NY).   

Margita Thompson has been named the new press secretary for Calif. Governor-elect Arnold Schwarzenegger. Thompson most recently worked as a press secretary for Lynne Chaney, wife of Vice President Dick Cheney. In 2000, Thompson served as a California-based director of the National Venture Capital Association.     

The Deal is reporting that Summit Partners will announce today that it has acquired a majority stake in Physician’s Formula Cosmetics from French company Pierre Fabre SA. No deal terms were disclosed.  

Reuters is reporting that the Carlyle Group will acquire a controlling interest in Colin Corp., a Japanese medical device maker that filed for bankruptcy protection earlier this year. No deal terms were disclosed.


  Topspin Communications Inc. a Mountain View, Calif.-based provider of switched computing solutions, has raised $20 million in new venture funding at a post-money valuation of approximately $100 million. Meritech Capital Partners led the deal, and was joined by return backers Accel Partners, Advent International, Duff Ackerman & Goodrich, Presidio Venture Partners and Redpoint Ventures. The company now has raised over $67 million in venture funding since its 2000 inception.

GTCR Golder Rauner, a Chicago-based buyout firm, has closed its eighth fund with $1.85 billion in capital commitments.

EQT Northern Private Equity Funds has acquired the Sirona Group, a Luxembourg-based provider of professional dental equipment, from UK-based private equity firm Permira. The €417.5 million (approx. $479 million) deal is being done in concert with Sirona management, which will receive a 15% stake in the bought-out company. Intel Corp. has acquired Mobilian Corp., a Hillsboro, Ore.-based maker of wireless chips for use in mobile devices. No deal terms were disclosed. Mobilian had raised approximately $50 million in venture capital funding since its 1999 inception, from investors like Amerindo Investment Advisors, Bessemer Venture Partners, Dell Ventures, Globespan Capital Partners, Morgan Stanley Private Equity, Raza Venture Fund, SBV Venture Partners and Siparex Group.

Matthias Moser who left private equity firm Terra Firma last month, will resurface in January as a managing director with Fortress Investment Group, where he will focus on German investment opportunities.

Gabriel Li has rejoined San Francisco-based Orchid Asia Management Co. as a managing director focused on Asian investment opportunities. Li worked at Orchid between 1997 and 2000. Since then, he had been a Hong Kong-based managing director with The Carlyle Group.

Composite Software Inc., a San Mateo, Calif.-based provider of enterprise information integrations solutions, has raised $12.1 million in Series B funding. The deal – which was reported in the 10/30 print edition of PE Week – was led by Lehman Brothers Venture Partners, and joined by return backers Palomar Ventures, Apax Partners, Clearstone Venture Partners and Dot Edu Ventures. The company now has raised over $17 million since its 2002 inception, including a $5.2 million Series A deal at a post-money valuation of approximately $8 million.

iS3 Inc., a Cupertino, Calif.-based provider of security management solutions, has raised $9.1 million in Series B funding. Menlo Ventures led the deal, and was joined by Via International, BV Capital and Asset Management. The company now has raised $11 million in venture funding since its 2000 inception. In related news, iS3 has signed a multi-year strategic partnership with Visa.

SCA North America Inc. has agreed to acquire Alloyd Co. Inc. from Wind Point Partners for $97 million. Alloyd is a DeKalb, Ill.-based manufacturer of light-gauge custom thermoformed retail and medical packaging.

StarGen Technologies Inc., a Malborough, Mass.-based semiconductor company, has raised $1.3 million from new investors Ironside Ventures and Commvest. This infusion closes out StarGen’s Series C round at $16.3 million, which included earlier investments from Morgenthaler Ventures, St. Paul Venture Capital, Commonwealth Capital Ventures and The Boston University Community Technology Fund.

Quality Distribution Inc., a Tampa, Fla.-based tank truck carrier and leasing company, began trading on the Nasdaq last Friday under ticker symbol OLTY. The company had priced seven million shares of common stock at $17 per share, and closed Friday trading at $18.75 per share. The company was formed in 1994 as a holding company known as MTL Inc., and consummated its initial public offering on June 17, 1994. On June 9, 1998, MTL was recapitalized through a merger with a corporation controlled by Apollo Management, and became a private company.

Victor T.K. Li has beaten out Cerberus Capital Management for a 31% stake in the bankrupt airline carrier. Li’s Trinity Time Investments will invest Cdn$650 million (approx. $495 million) for the stake, which was chosen by Air Canada over a competing bid from Cerberus.

Allen Moseley, a general partner with venture firm Noro-Moseley Partnershas been named vice chair-elect of the Technology Association of Georgia‘s board. He will assume the chair responsibilities for the 2005 term.

Dynamicsoft Inc. has acquired Teltier Technologies Inc., a Clark, N.J.-based provider of wireless presence and availability solutions. No deal terms were disclosed. Teltier has raised around $6 million from CIR Ventures and St. Paul Venture Capital, including a $5.5 million infusion in 2001 at a post-money valuation of approximately $12.5 million. Dynamicsoft has raised over $65 million in venture funding, including a $40 million round in mid-2000 at a post-money valuation of $237 million. Company investors include ComVentures, Sprout Group, Sun Microsystems, U.S. Bancorp Piper Jaffray, UBS Capital and VantagePoint Venture Partners.

The Press Democrat is reporting that telecom equipment maker Gluon Networks Inc., a Petaluma, Calif.-based telecom equipment maker, laid off one-third of its staff (40 employees) last Thursday. The company has raised nearly $80 million in venture capital funding from investors like JPMorgan Partners, New Enterprise Associates, Onset Ventures, Texas Pacific Group, Vanguard Ventures and U.S. Venture Partners.

Varoujan Basmadjian has stepped down as president and CFO of Overlord Financial, so that he can focus on his chief executive role of the company’s venture capital arm.

The Economics Daily has reported that Stan Shih, chairman of the Acer Group, and WF Chen, co-founder of Acorn Campus, will launch a $60 million venture capital fund focused on the semiconductor, information technology hardware and nanometer technologies sectors.

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