PE Week Wire — Friday 11/15

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Sockeye Networks, Waltham, Mass.-based provider of automated network management equipment, has received $12 million in a second round of venture financing from Baker Capital and Polaris Venture Partners. It had previously raised $28 million in a January 2001 round with a post-money valuation of approximately $80 million.

Aspect Communications Corp. (Nasdaq: ASPT), a San Jose, Calif.-based provider of business communications solutions has entered into a private placement agreement with Vista Equity Partners to sell $50 million in Series B convertible preferred stock. Each share of the Series B convertible preferred stock will be convertible into common stock at a conversion price of $2.25, or approximately 22,200,000 shares of common stock, subject to anti-dilution protection and certain adjustments.

Agilent Technologies Inc. (NYSE:A) today announced that Agilent Ventures (AV) has made an equity investment in Infinera, a privately held company that produces innovative solutions for the optical network telecommunications industry. The amount of the Agilent investment was not disclosed.

MDdatacor Inc., an Atlanta-based medical informatics company, today announced it successfully raised an additional $2.3 million in private equity financing. The additional capital was secured from MDdatacor’s current investors, including DIANON Systems Inc. (Nasdaq: DIAN), a national provider of cancer and genomic diagnostic services. To date, MDdatacor has raised $6.4 million in aggregate private equity proceeds.

Jones, Day, Reavis & Pogue has added Greg Lanier as a Menlo Park, Calif.-based partner. Lanier joins Jones Day from Cooley Godward’s Palo Alto, Calif. office, where he was the office head of litigation. Lanier specializes in complex business and technology litigation and counseling matters, and has handled numerous jury, bench and administrative trials, arbitrations and appeals for a variety of technology and venture capital clients, and has argued before the Federal Circuit.

Kate Bleasdale has been awarded £2.2 million in what may be the largest sexual discrimination settlement in UK history. Bleasdale had founded a nurse recruitment company in 1987, which was later bought out in an MBO that included HG Capital and Bridgepoint, and the appointment of Tim Chessell as company chairman. Bleasdale accused Chessell of “bullying” her and ultimately dismissing her, in part, because she was a female executive. She has said that she will invest some of her settlement money into women-owned start-up businesses.

3i Group and Veronis Sulher Stevenson have agreed to purchase the phone directory unit of Dutch telecom company KPN for approximately 500 million Euros. KPN said last year that the directories were no longer core assets. The buyers were advised by BNP Paribas, while KPN had retained Credit Suisse First Boston.

LxSix Photonics Inc., a Canadian manufacturer of optical components, has raised $CA8.4 million ($5.31 million) in Series A venture funding from the Solidarity Fund QFL, Innovatech du Grand Montreal and Investissement Desjardins.
NEWS FROM THURSDAY 11/14
Venetec International Inc., a San Diego-based maker of catheter securement devices, today announced completion of a $19 million round of financing. The deal was led by Channel Medical Partners with an additional new investment from Affinity Capital Management. Previous Venetec investors also contributing to the round included Lurie Investments and Wasserstein Adelson Ventures.

Lime Rock Partners, an energy-focused private equity firm, today announced the closing of its second fund with $320 million. Lime Rock closed its first fund in October 1998 with a total of $105 million in capital, which has now been invested in a total of twelve energy companies. In late 2001, Lime Rock retained Monument Group to assist in raising a second fund, and began meeting with institutional investors in early 2002. The fund¹s original target was $200 million.

WorldWinner, a Los Angeles-based provider of online skill-based tournaments for cash, today announced the completion of a third round of venture financing totaling $9.2 million in an oversubscribed round led by Benchmark Capital. In conjunction with this investment, Bob Kagle, a founding partner of Benchmark Capital, joined the Worldwinner board. Also participating in this round were previous WorldWinner investors Zero Stage Capital, HarbourVest Partners and CommonAngels.

Motiva Inc., a Pleasanton, Calif.-based provider of enterprise incentive management (EIM) software, has secured $6.5 million in a fourth round of funding led by Sierra Ventures. Other investors include InterWest Partners, Palomar Ventures, Silicon Valley Bank Ventures, Staenberg Venture Partners and select individual investors.

DigiLens Inc., a Sunnyvale, Calif.-based developer and manufacturer of electro-optic components, announced today a $4 million first closing of its current private equity financing led by Crescendo Ventures. Other participants included Alta Partners, Apex Investment Management, Noro-Moseley Partners, Johnson & Johnson Development Corp. and Vision Capital. The total financing is anticipated to raise $15 million, with a second and final closing expected by March 2003.

SkyBitz, a Dulles, Va.-based global locating system (GLS) provider, announced today that it has obtained $18 million in Series B venture funding led by AIG Highstar Capital LPand Industrial Technology Ventures LP.


Optate Inc., an Ann Arbor, Mich.-based application service provider in the health benefits industry, has secured $1.8 million in convertible term notes from two previous backers. Optate’s existing investor base includes Ascend Venture Group, Internet HealthCare Group and Opportunity Capital Partners.

ArcLight Capital Partners LLC announced today it has committed $100 million of equity to Lightning Gas LLC, a limited liability company established by ArcLight in partnership with CDX Gas LLC, a Dallas-based natural gas drilling and exploration company that has pioneered proprietary horizontal drilling technology. The commitment is expected to support over $500 million of new investments in coal bed methane and other non-conventional natural gas projects in the United States and Canada.

Evotec OAI AG a Germany-based drug discovery services provider, and Oxford Bioscience Partners, a Boston-based life sciences venture firm, announced that they have entered into an innovative drug discovery and development partnership to benefit OBP’s portfolio companies.

CapitalSource, a commercial finance firm based in Chevy Chase, Md., recently raised $325 million in its second debt offering of the year. The funds will be used for further growth of the two-year-old firm as it continues to make loans to small to mid-sized borrowers. In May, CapitalSource completed a $275 million securitization. CapitalSource was founded in 2000 with more than $540 million of equity capital commitments as the largest privately funded startup ever. Co-lead investors in the company were Farallon Capital Management and Madison Dearborn Partners. Other investors included First Union Capital Partners, Friedman Fleischer & Lowe LLC, Highfields Capital Management, Och-Ziff Capital Management Group and Rosewood Venture Group.
NEWS FROM WEDNEDSAY 11/13
Narad Networks Inc., a Westford, Mass.-based provider of business broadband solutions, announced today it has secured an additional $16.25 million in financing. Polaris Venture Partners led the Series B round, joined by other industry investors including Sofinnova Venture Partners, Vertical Group, YAS Broadband Partners, Origin Partners, Optical Capital Group, General Catalyst, CommVest Partners, Aurora Technology Fund and Allen & Co.

Looking Glass Networks Inc., a Laurel, Ill.-based provider of metro data transport services, has signed a definitive agreement to acquire the assets and customer contracts of Lightwave Communications Inc., a Laurel, Md.-based provider serving major cities in the Northeast that has annualized revenue of approximately $10 million. Both companies are venture-backed, with Lightwave receiving approximately $10.5 million of funding from Kitty Hawk Capital and South Atlantic Venture Funds. Looking Glass has received over $300 million from such firms as Battery Ventures and Madison Dearborn.

ITU Ventures, a Los Angeles-based venture capital firm serving technology start-ups emerging from research institutions and universities, today announced the first close of the $40 million ITU Ventures California I LP fund.

Sylvan Ventures LLC, a subsidiary of Sylvan Learning Systems Inc., today has completed its previously disclosed acquisition of National Technological University from Stratys Learning Solutions Inc. The acquisition price was $14.5 million.

Milestone Merchant Partners LLC today announced that Robert P. Pincus has joined the firm as Chairman of MMP Capital Partners LP – a private equity fund focused on leveraged buyouts of lower middle market businesses in the Mid-Atlantic, Southeastern and Midwestern regions of the United States. Pincus, who will also join the MMP board, is chairman of financial holding company BB&T, DC Metro Region, and was president and CEO of the Metro Region from 1998 until early 2002.

Dynogen Pharmaceuticals Inc., a neuroscience-based drug discovery company targeting novel therapies for genitourinary (GU) and gastrointestinal (GI) disorders, has raised $13.25 million in its first round of private equity financing. The round was led by Oxford Bioscience Partners and HealthCare Ventures LLC, and includes an investment by A.M. Pappas & Associates. In addition, the company appointed two new directors, Gus Lawlor, a general partner at HealthCare Ventures, and Myles D. Greenberg MD, a principal at A.M. Pappas.

GMT Communications Partners and VS&A Communications Partners have invested 50 million Euros in German cable television consolidator PEPcom. The deal also includes 100 million Euros of debt financing.

General Catalyst Partners, an early-stage private equity firm based in Cambridge, Mass., today announced that Larry Bohn has joined as a venture partner. Most recently president and chief executive officer of NetGeneis, Bohn will focus on identifying new investment opportunities within the enterprise software and information technology sectors.
NEWS FROM TUESDAY 11/12
Bluefire Security Technologies Inc., a Baltimore-based provider of security solutions for mobile and wireless handheld devices, today announced it has closed a $6 million second-round of funding led by JK&B Capital.

Skylight Systems Inc., a San Diego-based provider of interactive bedside communication and entertainment systems for hospitals, today announced it has closed $7.8 million in a Series B financing round which was led by Utah Ventures and included Versant Ventures, lead investor of the company’s Series A round, and members of the board and management.

Blue Point Capital Partners today announced that it has acquired LVI Services, a national environmental service firm specializing in the remediation of hazardous materials, such as toxic mold, asbestos and lead-based paint as well as nuclear facility and power plant decontamination, support of facility closure and demolition services. Blue Point and LVI management provided the equity for the transaction, with lead debt financing provided by Dymas Capital Management and Falcon Investment Advisors.

TradeCard Inc., a New York-based financial supply chain service provider, today announced that it has raised an additional $10 million of equity capital. Warburg Pincus, which is the majority shareholder in TradeCard, led the round.

BioForce Nanosciences Inc., an Ames, Iowa-based developer of nanoarray biomolecular analysis systems, announced today that it has received a $2 million Series A investment from the private equity team at Societe Generale Asset Management.

Actimize, an Israel-based Israel-based business data analysis company, has raised $10 million in a second round of funding. Giza Venture Capital and Vertex Israel led the round, alongside Series A backer Carmel Ventures.

Onset Technology, a Santa Cruz, Calif.-based developer of mobile enterprise software, announced today that sales of its popular METAmessage(R) for Wireless product line doubled during the third quarter compared to the same period in 2001, and the company received $2 million in new funding from first-time investor Catalyst Fund L.P. Catalyst Fund is an Israel-based venture capital firm that invests in late-stage companies. In addition, Onset obtained a $1 million revolving credit line from the Technology and Life Sciences Division of Comerica (NYSE: CMA) for general working capital purposes.

American Capital Strategies Ltd. announced today it has invested $5 million in Phillips & Temro Holdings LLC and its wholly owned subsidiaries, a manufacturer of cold weather starting and comfort products for the automotive and heavy duty truck OEM market and aftermarket. American Capital’s investment takes the form of a senior secured subordinated note and is supporting the acquisition of Phillips & Temro from the Budd Co. by TMB Industries, a private equity firm based in Chicago.

Brera Capital Partners LLC, a New York-based private equity firm, has acquired 2-10 Home Buyers Warranty and its subsidiaries. 2-10 HBW provides risk management solutions to builders, realtors and homeowners. Terms of the deal were not disclosed.

Onex Corp. has continued its movie theater buying spree with the $80 million purchase of Los Angeles-based Landmark Theaters and Silver Cinemas. The theaters are currently owned by Oaktree Capital Management, which worked with Onex earlier this year on a buyout of Lowes Cinexplex.

Dow Jones is reporting that Georges Muller has resigned from the board of Swiss private equity firm Private Equity Holding AG, effective immediately.

NEWS FROM MONDAY 11/11
AmberPoint Inc., an Oakland-based provider of Web services management solutions, today announced that it has secured $13.6 million in equity financing. This second round of funding was led by Crosslink Capital and included additional investments from existing AmberPoint backers Norwest Venture Partners and Sutter Hill Ventures. To date, AmberPoint has raised $22.6 million in venture capital. PE Week subscribers can read more of this story in the protected Deal News section of PrivateEquityWeek.com , or in today’s print edition.

Sabrix, a San Ramon, Calif.-based provider of global transaction tax management software, today announced it has closed $6.2 million in Series B financing from existing investors bringing the total capital invested in the company to $19.1 million. Investors Mohr, Davidow Ventures (MDV) and Venture Strategy Partners (VSP) co-led the financing. PE Week subscribers can read more of this story in the protected Deal News section of PrivateEquityWeek.com , or in today’s print edition.

Traq-wireless, an Austin, Texas-based provider of enterprise mobile communications management solutions, today announced that it has completed a $14.8 million third round of venture financing. The round was led by Sevin Rosen Funds and included HO2 Partners, Convergent Investors, TIAA-CREF, Crown Venture Funds and others.

Kada Systems Inc. is expected to announce tomorrow that it has closed its second round of funding. Previous investors JK&B Capital and Network Angel Capital invested $2.6 million into the round – the valuation of which Kada Chief Executive Jim Acquaviva characterizes as “pretty much sideways” from the last round. PE Week subscribers can read more of this story in the protected Deal News section of PrivateEquityWeek.com , or in today’s print edition.

Simple Access Inc. today announced that it has acquired Intel Network Systems (formerly Shiva Corp.) from Intel Corp. and will rename itself Shiva Corp. Financial terms of the transaction were not disclosed. As a part of the transaction, Simple Access has opened a development facility in Toronto, and Intel Capital, Intel’s corporate venture arm, will hold an equity position in Simple Access. Simple Access will integrate the acquired virtual private networking (VPN) products in its new Shiva business with its existing broadband, firewall, and secure socket layer (SSL) business to bring innovative security solutions to market.

WorldWater Corp. (OTCBB: WWAT) announced today that it signed a definitive Securities Purchase Agreement with Millennium 3 Opportunity Fund LLC, a New Jersey-based venture capital fund. Under the agreement, Millennium 3 has purchased $250,000 of 10% convertible notes and warrants to purchase common stock and has agreed to make a subsequent investment of up to another $2.25 million, subject to certain conditions. The definitive Securities Purchase Agreement provides for funding in three stages: the first has been consummated, the second is another $250,000, which Millennium 3 has committed to fund by Friday, November 15, 2002; and the third is anticipated to close by December 31, 2002, subject to Millennium’s satisfactory completion of due diligence.

Saybrook Capital LLC today announced Cary Stanford has joined the firm as Managing Director. In addition, Todd Rosen was named an Associate and Brandon Gregorio a Senior Financial Analyst in the firm’s expanding restructuring advisory services practice. Stanford was most recently a managing director at Houlihan, Lokey, Howard & Zukin, while Rosen joins Saybrook from the corporate securities group at law firm Irell & Manella. Gregorio was last with Wedbush Morgan Securities.

FaceTime Communications, a Foster City, Calif.-based provider of network-independent, enterprise solutions for the management and control of IM, today announced a late-stage investment from new lead investor BA Venture Partners and existing FaceTime investors Sutter Hill Ventures and TH Lee Putnam Ventures.

GuardedNet, an Atlanta-based provider of advanced network security management software solutions, today announced that it has received $9 million in Series A financing led by Boston-based M/C Venture Partners, one of the most active and experienced venture capital firms in the network communications sector. Other firms participating in the round include Atlanta-based Imlay Investments and Technical Consulting Services Ltd.

LogiSpring, a Geneva-based venture capital fund investing in supply chain and logistics technology companies, announced the appointment of Jean-Yves Quentel as Partner. Quentel’s has served as an Investment Manager for Atlas Venture and a senior vice president for Europatweb. Jean-Yves joins LogiSpring from ETF, where he was director, based in ETF’s Paris office.

The Carlyle Group and Welsh, Carson, Anderson & Stowe today closed the first part – Dex East – of their purchase of Qwest Communications‘ yellow page directories business. This first part of the transaction is valued at $2.75 billion. The purchase price of the whole company is $7.05 billion, representing the largest U.S. buyout since 1989 and the second largest in U.S. history. The second part of the transaction – Dex West – is expected to close in 2003.

The Detroit News is reporting that former Ford Motor Co. CEO Jacques Nasser is expected to take a job with One Equity Partners LLC, the venture capital arm of Banc One Corp. Nasser was fired from Ford over a year ago due to poor corporate performance.

Focus Ventures, today announced the addition of seven influential industry leaders to its Venture Advisors Board. This experienced and diverse group includes Craig Johnson, founder of Venture Law Group; Professor Lawrence Lau, Professor Hau Lee and Joseph Goodman, PhD, all from Stanford University; Frank Marshall, board member of PMC-Sierra and Netscreen Technologies; Frank Fanzilli, former CIO of Credit Suisse First Boston; and James Jordan, founder of Ungermann-Bass and former president of Kalpana.

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