PE Week Wire — Friday 3/28

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Doug Brown, former president and CEO of Advent International, has been elected president and chief executive of water treatment and purification company Ionics Inc. (NYSE:ION). Brown stepped down from his lofty Advent post late last year when the firm abandoned its hierarchical structure in favor of a partnership model. He has served as a director at former Advent portfolio company Ionics for several years, and has been serving as chairman of its audit committee. He will officially take the reins on April 1.

Aurema Inc., a Cupertino, Calif.-based developer of systems resource management software, has raised $4 million in Series B financing. Intel Capital led the round, with additional participation from fellow return backer Allen & Buckeridge.

Ameripath Inc. (Nasdaq:PATH) stockholders have approved a merger with Amy Acquisition Corp., an entity formed by buyout firm Welsh, Carson, Anderson & Stowe. Under the terms of the merger, each of AmeriPath’s approximately 30.6 million outstanding shares of common stock, other than shares held by Welsh Carson, have been converted into the right to receive $21.25 in cash. In conjunction with the debt financings for the transaction, Amy received approximately $360 million in equity and subordinated debt financing from Welsh Carson and certain other investors.

Charles Rossotti, founder and chairman of American Management Systems and former IRS commissioner, has been named a senior advisor with The Carlyle Group. He will focus on IT-related buyout and venture investments, once he takes the post on June 1.

Marketing Technology Solutions Inc., a New York-based marketing services information company, has raised an undisclosed amount of third round funding from Palisade Capital, as well as current investors, Lazard Technology Partners and Hudson Ventures.

Hicks, Muse, Tate & Furst is planning to raise a new €1.5 billion buyout fund focused on European companies, according to today’s Times of London. In sort of related news, PE Week is reporting that UK-based buyout firm Doughty Hanson is nearly halfway into its fund-raising drive for a $3.2 billion-targeted fourth fund.

IntellIDIOT Corp., a San Diego-based health-care information technology company, has raised $2.25 million in new funding from American River Ventures and Shoreline Ventures.
NEWS FROM THURSDAY 3/28
I4 Commerce Inc., a Baltimore-based developer of merchant payment solutions for multi-channel retailers, has raised $23 million in fourth round funding led by GRP Partners. Return backers include Crosspoint Venture Partners, Azure Capital Partners, First Data Corp. and Paymentech. The company has now raised around $66 million since its 2000 founding, including a $15 million Series C deal in Nov. 2001 at a post-money valuation of just under $42 million.

Pat La Vecchia, currently the group head of Legg Mason‘s Private Finance and Sponsors Group, has decided to leave Legg Mason effective the end of March 2003. La Vecchia wrote in a mass email that his weekly commute from Connecticut to Baltimore had become too much of a personal burden, and will pursue opportunities in the Connecticut/New York area.

Packet Design Inc., a Palo Alto, Calif.-based network appliance developer spun out from Packet Design LLC in March, has raised $14.25 million in Series B funding. Advanced Technology Ventures and Mayfield Fund co-led the deal, and were joined by Allegis Capital, Masthead Venture Partners and former parent Packet Design LLC.

ArcStream Solutions Inc., a Watertown, Mass.-based wireless consulting and systems integration firm, today announced it has completed a $4 million round of new funding led by existing backer North Bridge Venture Partners. The company now has raised over $11 million since being founded in October of 2000.

Ischemia Technologies Inc., a Denver-based developer of proprietary blood tests, has raised $8.4 million in new venture financing. KB Partners led the deal, and was joined by new investors Advantage Colorado and Murphree Colorado, plus previous backers Crawley Venture Group, Murphree Ventures, Quest Capital Partnership, Roser Venture Partners, Sequel Venture Partners, White Pines Ventures and Wolf Ventures also participated. The company has now raised around $27 million since its 1997 founding, including a $2.5 million deal in mid-2001 at a post-money valuation of $22.27 million. It’s flagship product recently received FDA clearance and is the first new blood test for evaluation of heart attacks since 1994.
OpSource Inc., a Santa Clara, Calif.-based IT infrastructure services company, has received $2 million in additional Series A funding from Artiman Ventures. In total, the round now comes in at $6.5 million.

Key3Media Group Inc. has received court approval for $30 million in debtor-in-possession financing from Thomas Weisel Capital Partners.

Oblix, a Cupertino, Calif.-based developer of identity-based security solutions, has received $4 million from General Motors Investment Management Corp.

Corvil Networks Ltd., a Dublin, Ireland-based developer of network management and operations support software, has raised €10 million in second round funding. The deal was led by Apax Partners, and included Cisco Systems as a new investor as well as existing investors ACT Venture Capital.

ABN AMRO has paid €25 million for an 80% stake in the Spanish unit of South Africa-based packaging company Nampak.

 

Baring Private Equity Partners Asia has exited its investments in two China-based companies. First, the global investment firm exited wireless application service provider Newpalm via a trade sale. Next, it exited online content portal operator Netease via a partial sell-down of an ADR issue on Nasdaq.

The Chicago Tribune is reporting that McDonald’s Corp. has begun shopping its Partner Brands division, which includes such chains as Boston Market, Chipolte Mexican Grill and Donatos Pizzaria. Private equity firms are reported to be involved in the discussions.

PrivateEquityOnline is reporting that Christian Dummett has been put in charge of Merrill Lynch’s London-based placement team. He was previously head of the private equity group at Abbey National.
NEWS FROM WEDNESDAY 3/26

Novartis Pharma AG has agreed to acquire a majority interest in Idenix Pharmaceuticals Inc., a Cambridge, Mass.-based developer of antiviral therapeutics. Upon closing of the transaction, Novartis will acquire 51% of Idenix stock on a fully-diluted basis from existing Idenix shareholders such as MPM Capital. Novartis will pay to the selling shareholders $255 million at closing and up to an additional $357 million contingent upon achievement of certain hepatitis drug candidate milestones. Idenix (formerly known as Novirio Pharmaceuticals) had raised $68 million in venture capital since its 1998 founding. Investors included MPM, Banc of America Securities, CSFB Private Equity, Noruma International, Swiss Life Private Equity Partners and TVM Techno Venture Management. The company’s final round of private funding was a $44 million Series C deal in May of 2002 at a post-money valuation of $180 million.

Endius Inc., a Plainville, Mass.-based medical device maker focused on spine fusion surgery, has raised $26.5 million in new funding. New investors EGS Healthcare Capital Partners and The Carlyle Group co-led the deal, which also included returning investors Morgan Stanley, Advanced Technology Ventures, Capstone Ventures, Dauphin Capital Partners, Hickory Venture Group, Hillman Medical Ventures, Polaris Venture Partners, Senmed Medical Ventures and Trellis Health Ventures. The company’s most recent fund-raising had been an $8.1 million Series C deal last March at a post-money valuation of $38.3 million.

Adam Osborne, a high-tech legend responsible for creating the world’s first portable PC in 1981, passed away last Tuesday at the age of 64. His wife told reporters that he had suffered from a series of strokes over the past decade.

Riverwood Holding Inc., parent company of Riverwood International Corp., and Graphic Packaging International Corp. (NYSE: GPK) have signed a definitive merger agreement. The deal between paperboard packagers is worth around $3 billion, and is expected to close during the third quarter. Riverwood’s investors include funds managed by Clayton, Dubilier & Rice, Exor, Brown Brothers and other institutional investors. Several Coors family trusts, which own approximately 75% of the outstanding common shares of Graphic Packaging as converted, will own approximately 30% of the combined company.

Paul Grayson has been named a director in the San Diego office of Sanderling Ventures. Grayson was most recently co-founder and CEO of Senomyx Inc., a venture-backed company focused on discovering new proprietary flavor and fragrance molecules for use in consumer products.

NetWolves Corp. (Nasdaq:WOLV) has closed on the previously announced $4.6 million private placement of its Series B preferred stock.

USA Interactive (Nasdaq: USAI) has completed its acquisition of Entertainment Publications from a group of investors led by The Carlyle Group. The consideration for Entertainment Publications is approximately $360 million and was paid all in cash. The transaction is expected to be accretive to USA’s 2003 adjusted net income and adjusted earnings per share. Entertainment Publications is expected to contribute $205 million in revenue, $41 million in EBITA and $25 million in operating income to USA’s 2003 financial budget, from the date of closing.

The Board of the Institutional Limited Partners Association has appointed Arlett Tygesen to the position of executive director, effective April 1. Tygesen works in the Private Equity Funds group at the Ontario Municipal Employees Retirement System).

Fort Washington Capital Partners has raised $40 million for a fund designed to fuel economic growth in the tri-state region surrounding Greater Cincinnati. It includes investments from The Procter & Gamble Co., GE Aircraft Engines, Convergys Corp., E.W. Scripps Co., Ashland Inc., Fifth Third Bancorp, Cincinnati Children’s Hospital Medical Center, University of Cincinnati, Castellini Management Co. and The Western and Southern Life Insurance Co.

Zon Capital Partners has received its SBIC license. The Princeton, N.J.-based firm currently has $36 million of capital under management, and plans to keep fund raising throughout the year with a target capitalization of $75 million to $100 million.

Bridgepoint Capital has sold its 70% stake in German shipyard Lloyd Werft to a holding company operated by the shipyard’s management and employees.

AES Corp. has agreed to sell a pair of wholly owned business in Bangladesh to the power and energy group of UK private equity firm CDC Group. The deal is valued at $127 million, but CDC will assume $310 million in debt. In addition, AES also said that it would unload its 32% stake in AES Oasis Ltd. for around $150 million to a fund managed by Emerging Markets Partnership. AES Oasis is a new company that will own a pair of electric generation plants in Oman and Qatar.

The News & Observer is reporting that Draper Fisher Jurvetson and SI Partners have teamed up to form a new fund devoted to Southeast-based companies. The new effort will be named Draper SI, and will be run by former Tribune Ventures investor Randy Glein.
NEWS FROM TUESDAY 3/25
EqualLogic Inc., a Nashua, N.H.-based developer of scalable network storage solutions, has raised $15 million in second round funding led by TD Capital Technology Ventures. The deal also includes Series A backers Charles River Ventures and Sigma Partners.

Virginia Turezyn has been named a managing director with Constellation Ventures, a private equity fund overseen by Bear Stearns Asset Management. Turezyn was previously the co-founder and managing director of Infinity Capital and its predecessor firm Information Technology Ventures. Prior to that, she was with Morgan Stanley’s Venture Capital Group.

Jimmy Treybig has been named an Austin, Texas-based venture partner with New Enterprise Associates (NEA). Treybig is a former venture partner with Austin Ventures, and serves as chairman of WholeSecurity. In related news, NEA announced that it would provide $3.4 million of an $8 million financing round to WholeSecurity. Synacor, a Buffalo, N.Y.-based company that offers content provisioning to Internet service providers, has secured $6.5 million in Series C funding. New investors Access Technology Capital, Intel Capital and Rand Capital joined Synacor’s early investors, Walden International Investment Group and Crystal Venture Capital, in the round.

PA Early Stage Partners has opened an office in Morgantown, West Va. The move was made in conjunction with a recent limited partner investment in PA’s third fund from the West Virginia Economic Development Authority. Scott Nissenbaum, who has been a PA principal since 1998, will head up the new shop.

Alere Medical Inc., a Reno, Nev.-based provider of care and remote monitoring of patients with advanced heart failure, has raised $11.5 million in new private funding. Cutlass Capital, S.R. One, Flagship Ventures and IVP provided $5.1 million in new equity funding, while $6.4 million of debt was committed by Western Technology Investments.

TeraXion, a Quebec City-based provider of optical components, has raised $10 million in an ongoing second round of financing. SGF Tech Inc. led the deal, along with new investor Entrepia Inc. and return backers Business Development Bank of Canada and Innovatech Québec.

Zelos Therapeutics Inc., an Ottawa-based drug developer focused on osteoporosis, has raised $14 million in new venture funding. VenGrowth Capital Partners led the deal, and was joined by Seaflower Ventures.

Craig Media Inc., Canada’s largest private television broadcasting company, has received $145 million in a buyout deal led by Providence Equity Partners. The equity tranche provided by Providence comes in at $110 million, while RBC Capital Markets and BMO Nesbitt Burns teamed up for a $35 million senior debt facility.

SonicBlue Inc. (Nasdaq:SBLU), a Santa Clara, Calif.-based consumer electronics company known for its Rio MP3 players and ReplayTV devices, filed for Chapter 11 bankruptcy yesterday. The company went public in 1993, but in 2002 received a $75 million financing package from private equity firms like Citadel Investment Group and Wellington Partners. As of end of trading yesterday, SonicBlue stock was down to five cents per share.

Siperian Inc., a San Mateo, Calif.-based provider of customer data management software, recently raised $8 million in Series B funding. ArrowPath Venture Capital and Red Rock Ventures both participated on the deal as new investors, while return backers included Anthem Venture Partners, Blumberg Capital and Saffron Hill Ventures.

Enigmatec Corp., a London-based developer of reactive rule-based enterprise tools, has raised £2 million in funding led by Pentech Ventures. Existing investor Amadeus Mobile Seed Fund also participated.

The Recycling Fund, a £5 million venture vehicle aimed at the UK-based recycling sector, has chosen Impax Asset Management as its manager.
NEWS FROM MONDAY 3/24
Neoteris, a Mountain View, Calif.-based developer of SSL-based VPN systems, has raised $17.5 million in third round funding. Battery Ventures led the deal, and was joined by return backers New Enterprise Associates, Barksdale Group and Jim Clark.

Domain Associates is getting ready to commence fundraising on its sixth investment vehicle later this year. The new fund will have a target capitalization of $475 million, and will maintain the firm’s traditional focus on life sciences investments.

David Beirne, a general partner with Menlo Park, Calif.-based Benchmark Capital, is planning to relocate to Colorado. He is not planning to give up either his job or his board seats.

The Foundry, an incubator for medical device companies, has closed its third fund with $1.35 million. Morgenthaler Ventures and St. Paul Venture Capital co-invested.

A4Vision Inc., a Cupertino, Calif.-based developer of 3D-face recognition technology, has raised $3 million in Series A funding. The deal was led by MyCube – a $100 million fund promoted by Pirelli and funded by the European Investment Fund, Benetton Group, Merrill Lynch, Banca Intesa and Mediobanca.

Mythic Entertainment Inc., a Fairfax, Va.-based online gaming company, has received $32 million in funding from TA Associates.

Arsenal Digital Solutions, a Cary, N.C.-based provider of storage management services, has raised $10.5 million in Series D funding. Investors included Covestco, Southeast Interactive Technology Funds and Southern Cross Capital. Since being founded in August 1998, Arsenal has raised over $63 million.

Application Security Inc., a New York-based manufacturer of software for securing business infrastructures from application level attacks, today announced it has completed a seed funding round, co-led by Kodiak Venture Partners and Early Stage Enterprises.

Mindreef, a Hollis, N.H.-based producer of web service diagnostics, has raised $4 million in first round funding. Investors included Kodiak Venture Partners and company co-founders Jim Moskun and Frank Grossman (previously co-founders of NuMega Technologies Inc.).

Maria Walker has been named an administrative partner with Forward Ventures. Forward Ventures. Most recently, Walker served as CFO to Forward Ventures startups TargeGen and Kemia. She also serves on the board of directors of MedicineNet.

Craig Francis has been named a principal in the Palo Alto, Calif.-based office of Summit Partners, where he will run the firm’s health-care and life sciences team. Most recently, Francis was a managing director with StrandVentures.

Evergreen Solar Inc. (Nasdaq:ESLR) has agreed to sell $29.47 million worth of Series A convertible preferred stock to a syndicate of institutional investors and one strategic investor. New institutional investors include Perseus LLC (lead investor), RockPort Capital Partners, CDP Capital-Technology Ventures, the Massachusetts Renewable Energy Trust, Impax Asset Management, Merrill Lynch Investment Management, Credit Suisse Asset Management, and SAM Smart Energy. Aloso participating are some original venture capital investors in Evergreen prior to its November 2000 initial public offering: Nth Power LLC, Arete Corp., SAM Private Equity, Zero Stage Capital and Rockefeller & Co. In addition, Beacon Power Corp., a developer of flywheel energy storage systems, will invest $1 million on the same terms as the institutional investors. Beacon will also purchase a three-year warrant exercisable for 2.4 million shares of common stock.

LapLink Inc., a Bothell, Wash.-based developer of high-speed file transfer software, has filed for Chapter 11 bankruptcy protection. The Seattle Post-Intelligencer is reporting that that company plans to sell its assets for former Microsoft exec Thomas Koll (chairman of InfoWave Software) for $1.5 million in cash, plus another $300,000 if LapLink meets certain sales requirements. The company has received private backing from Accel Partners, Ascent Venture Partners, Bay Partners, Brentwood Advisors, HarbourVest Partners and Silicon Valley Bank. Near the end of 2001, it was valued at just under $18 million.

BitBand Inc., an Tel Aviv, Israel-based provider of video and audio-over-IP networks, has raised $9.1 million in second round funding led by Apax Partners. Other investors included Sequoia Seed Capital, the Fantine Group, the Challenge Fund and the Kardan Group.

Mitchell Kertzman will be named a general partner with Hummer Winblad Partners, according to The Boston Globe. This means he will step down from his post as CEO of troubled software development company Liberate Technologies Inc.

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