PE Week Wire — Friday 4/4

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Alan Austin has agreed to join buyout shop Silver Lake Partners as managing director and chief operating officer. He had spent the past three years in a similar position with early-stage venture firm Accel Partners. Most of Austin’s duties at Accel will be taken over by Tracy Sedlock, who currently serves as the firm’s chief financial officer, and Rich Zamboldi, an associate with the firm.

SSA Global Technologies Inc., a Chicago-based provider of e-business solutions, has received $75 million in equity capital from General Atlantic Partners. The company is still majority owned by Cerberus Capital Management.

Charterhouse Group has invested over $30 million into OAKLEAF Waste Management Inc., an East Hartford, Conn.-based waste services firm.

Roger Salquist, former managing director of Bay City Capital, has joined the board of Sacramento-based Lipomics Technologies Inc.

Be Here Technologies Inc., a Cupertino, Calif.-based panoramic imaging company, has raised new funding led by Birchmere Ventures. As part of the deal, Chuck Dietrick of Birchmere will join the Be Here board of directors. Terms of the deal were not disclosed.

Chartwell Investments has made an equity investment in RCR Enterprises, a NASCAR racing team founded and majority owned by Richard Childress.

C. Sage Givens, managing director of Acadia Venture Partners, and Charles Newhall, managing director of New Enterprise Associates, recently stepped down as board members at managed care provider Amerigroup Corp. The pair so far have maintained board seats with accounting scandal-plagued HealthSouth.

Texas Pacific Group is said to be weighing a possible investment in bankrupt airline company Air Canada.

John Crocker has joined Capital Z Investment Partners as a senior vice president and partner. He was most recently a partner in Credit Suisse First Boston’s private equity fund-of-funds group.

PrivateEquityCentral.net is reporting that Congress has decided to halt future funding of the New Markets Venture Capital (NMVC) program, which provided capital to small business in low-income areas via approved investment funds. Both The White House and Small Business Administration supported the decision. NMVC was launchedshortly before President Clinton left office, and had been championed by Clinton and House Speaker Denny Hastert.
NEWS FROM THURSDAY 4/3
Texas Attorney General Greg Abbott has ruled that the University of Texas Investment Management Co. (UTIMCO) must release updated top-line performance data on funds within its private equity portfolio – regardless of whether or not those funds signed confidentiality waivers (only 31 of 67 managers have signed them). The disclosure must occur within the next 10 business days. What Abbott did not say, however, is whether or not his ruling can be relied on for similar disclosure requests in future quarters, which was something that UTIMCO had asked for clarification on. This is a similar position to one taken by former AG John Conryn, but also means that UTIMCO likely will be forced to request yet another ruling next quarter.

Epigenomics AG, a German biotech company focused on DNA methylation-based products, has raised €21 million ($22.5 million) in Series C funding. New investor The Wellcome Trust Ltd. joined return backers 3i Group, Abingworth, Deutsche Venture Capital, MPM Capital and TBG. The company has now raised over €56 million ($60 million) since being founded in 1998.

Sam Jadallah has joined Mohr, Davidow Ventures as a general partner. He was most recently in charge of West Coast and Asian operations for Internet Capital Group. Previously, Jadallah was a vice president of worldwide enterprise sales for Microsoft.

Network Associates Inc. has signed a definitive agreement to purchase San Jose, Calif.-based IntruVert Networks Inc. for $100 million in cash. IntruVert is a provider of network-based intrusion protection technology that has raised over $40 million in venture funding since being founded in late 2000. It’s most recent round was a $20.64 million Series C round in Sept. 2002 at a post-money valuation of around $45 million. Investors included ComVentures, Raza Foundries, Trinity Ventures and Worldview Technology Partners.

Ajay Agarwal has joined Bain Capital Ventures as a venture partner. He has spent the past seven years in various senior management positions at Trilogy Software Inc., an Austin, Texas-based enterprise application software developer

Remanage Inc., a Dallas-based software company focused on property management companies, has secured $3 million in funding from Clarium Capital and Novus Ventures.

FitLinxx Inc., a Stamford, Conn.-based provider of interactive systems for the fitness industry, has received an undisclosed investment from Blue Sky Ventures, North Atlantic Capital and Warbros Venture Partners.

Kathleen Rae, a founding partner of Bellevue, Wash.-based venture firm Ignition Partners, has been named president and chief operating officer of InfoSpace Inc. (Nasdaq:INSP).

PizzaExpress, a UK-based restaurant chain operator, has agreed to a £277.8 million ($435 million) takeover bid by private equity firms Capricorn Ventures International and TDR Capital.

K12 Inc., a McLean, Va.-based education company run by former Secretary of Education Bill Bennett, has raised $20 million in a deal led by Constellation Ventures.

Walter Kortschak, a managing partner with Summit Partners, has been named a trustee with the U.S. Ski and Snowboard Team Foundation.

American Capital Strategies has invested $40 million to recapitalize ACE Cash Express Inc., an Irving, Texas-based owner and operator of retail financial services stores. American Capital’s investment takes the form of senior secured subordinated notes, with proceeds being used to refinance a portion of ACE’s existing debt. A bank group led by Wells Fargo Bank Texas, JP Morgan Chase Bank, Bank of America and US Bank remains as the company’s revolving credit facility provider. New lenders in the company’s revolving credit facility include US Bank and Southwest Bank of Texas.

Clareos Inc., a Herndon, Va.-based business intelligence software company, has received $3 million in Series A funding led by Core Capital Partners.

Sentient, a Norwell, Mass.-based provider of private jet membership, today announced that TH Lee Putnam Ventures has acquired the company from CSFB Private Equity. Terms of the transaction were not disclosed.

Jackie Skelly Fitness, a UK-based gym chain, has raised €3 million in new funding from ICC Venture Capital and the Guinness Ireland Ulster Bank Equity Fund, which is managed by NCB Ventures.

Travel Transactions Processing Group, a company formed by Citigroup Venture Capital and Teachers’ Merchant Bank to purchase ticket technology company Worldspan from its airline owners, has received antitrust clearance by the Federal Trade Commission. No terms have been announced, but the deal is rumored to be worth around $1 billion.

V.I. Technologies Inc., a Watertown, Mass.-based blood supply safety company also known as Vitex, has received SEC approval to sell up to $20 million of common stock through subscription rights to shareholders.
NEWS FROM WEDNESDAY 4/2
Responsys Inc., a Palo Alto, Calif.-based provider of e-marketing services, has raised $9.4 million in fourth round funding. Investors included Accel Partners, Foundation Capital, Redpoint Ventures, Sigma Partners, Lighthouse Capital Partners and R. B. Webber & Co. Responsys has now raised almost $65 million since its 1998 founding, including a $25 million Series C round in March 2001 at a post-money valuation of $78.33 million. In related news, the company also announced that it has named Howard Koenig as its new CEO. Koenig was previously in charge of BenefitAmerica.

Fabric7 Systems Inc., a Mountain View, Calif.-based developer of systems solution for large enterprise data centers, has secured $13.94 million in Series A funding. Investors on the deal include New Enterprise Associates ($5.9 million), Goldman Sachs and Fidelity Ventures. As part of the deal, Dick Kramlich of NEA and Ankur Sahu of Goldman Sachs have joined the Fabric7 board of directors.

Xcel Pharmaceuticals Inc., a San Diego-based company that withdrew its IPO filing earlier this year, has rebounded with $26 million in Series C private equity and $62 million in senior debt restructuring. Ferrer Freeman & Co. led the equity round. The equity and debt capital was used to repurchase 3 million shares of Series A preferred stock held by Elan Corp., and to retire $109 million of long-term debt owned to Elan (via a one-time $89.5 million payment to Elan). Xcel had filed for a $97.75 million IPO in early 2002, but pulled it this past January due to unfavorable market conditions. The company had previously raised over $90 million in venture funding from such firms as Domain Associates and New Enterprise Associates.

SupplyWorks Inc., a Bedford, Mass.-based provider of relationship management solutions, has raised $3 million in Series D funding. Return backers included Atlas Venture, Longworth Venture Partners and Solstice Capital.

Ansata Therapeutics, a La Jolla, Calif.-based biopharmaceutical company, has raised $2.5 million in second round funding from existing investors Domain Associates and Avalon Ventures.

Apollo Real Estate Advisors and GMAC Institutional Advisors (GIA) have closed a jointly managed mezzanine fund with $200 million. The new vehicle will invest in junior loans and preferred equity positions, typically $8 to $20 million per transaction, with terms of up to five years. In addition to Apollo, the managing general partner, and GIA, the co-general partner, lead investors included insurance companies and a private endowment. A five-year term credit facility has been provided to the fund by a GMAC affiliate. This is the first time Apollo has created a fund with a co-sponsor, and the second such venture for GIA.

Mountain View Data Inc., a Mountain View, Calif.-based developer of server management software, has closed the first tranche of an ongoing Series B financing. The round was led by existing investor Nippon Venture Capital, and joined by Hitachi, ADTX, Nissei Capital, Daiwa Bank and Kokusai Capital. Financial terms were not disclosed, and a final close is expected in early May.

Ctek Corp., a Malborough, Mass.-based drug discovery company, has raised $6 million in new funding from John and Stephen Davis, Gainesborough Investments and James L. Waters.

Metris Cos. Inc. (NYSE:MXT) has received a $125 million term loan commitment from Thomas H. Lee Equity Fund IV as a back-up financing facility.

Steven Berger, formerly of Rosetta Partners, has been named executive chairman and managing director of the Corporate Finance unit of Dresdner Kleinwort Wasserstein.

Michael Golden has been named CEO of Edison, N.J.-based online retailer HomeClick. Prior to joining HomeClick in 2002, Golden was managing director at the Golden Opportunities Fund, an early-stage venture capital fund focused on Internet-related professional services companies.

Dow Jones is reporting that U.S. Trust Co. has filed with the SEC for a $100 million closed-end mutual fund that would invest in between eight and 12 buyout funds. The story also says that an unregistered side fund-of-funds will make parallel investments in the same buyout endeavors.

The Nordic Business Report is saying that Swedish private equity firms Nordico and Euroventures have agreed to merge.

The Financial Times is reporting that Vincenzo Morelli has been named managing director and co-head of the new Global Equity Sponsor Group at Alvarez and Marsal. Morelli was previously a senior advisor with private equity firm Clayton, Dubilier & Rice.
NEWS FROM TUESDAY 4/1
The San Jose Mercury News is at it again. This time the technophile newspaper has filed suit against the University of California for refusing to disclose fund-by-fund performance data from within its private equity portfolio. The suit also is asking for records of various closed sessions related to investment and advisor decisions.

Only one private equity-backed IPO made it out to market during the first quarter of 2003, which matches the lowest total since Venture Economics began keeping track back in 1970. The lucky company came from the venture-backed world, and was San Diego-based Accredited Home Lenders (Nasdaq:LEND). For data charts – including all the companies that pulled offerings in Q1 2003, check out the latest print edition of Private Equity Week.

Chris Hanson has been named chief operating officer at Battery Ventures. He was most recently CFO of WaterCove Networks Inc., a Chelmsford, Mass.-based provider of data networking infrastructure solutions. A Battery spokeswoman says that the move will help free up general partner Tom Crotty to focus more on investments, although he will maintain some operational duties.

The Bill & Melinda Gates Foundation has pledged $60 million to the International Partnership for Microbicides (IPM), a Silver Springs, Md.-based nonprofit that operates like a venture firm to encourage private drug makers to invest in microbicide product development. Microbicides are gels, films or other substances used to block transmission of viruses like HIV. The Gates donation is specifically for the development of creams that essentially act as invisible condoms for women.

Northface University, a Salt Lake City-based postsecondary school for software developers, has secured $13 million in Series B funding. Great Hill Partners led the deal, which is expected to be officially closed in mid-May.

HealthMedia Inc., an Ann Arbor, Mich.-based behavioral science technology company, has secured $3 million in financing. Chrysalis Ventures led the investment, which included participation from existing shareholders like Avalon Investments.

Kennet Venture Partners, a UK-based venture firm with $280 million under management, has participated in a management-led buyout from former parent Broadview Holdings.

Duncan Lewis, former CEO and president of GTS/Ebone Inc., has been hired as a London-based senior advisor to The Carlyle Group. Lewis will join the global private equity firm on April 2, and focus on global telecommunications and media.

David Verey, former CEO and chairman of Lazard Brothers, has been named a Europe-based special advisor to The Blackstone Group. He will also join the New York-based private equity firm’s European advisory board.

The Shansby Group has made an investment in Energy Brands Inc., a Whitestone, N.Y.-based producer of enhanced water products like vitamin-laden water. No terms were disclosed.

Guidant Corp. (NYSE:GDT) has paid $10 million for a 51% stake in an early-stage heart stent company founded by medical technology incubator Synecor LLC. Upon meeting certain conditions of the agreement, Guidant will purchase the remaining 49% for $6 million, which is expected to occur in early 2004. Guidant also will make payments upon the achievement of certain regulatory milestones.

Gert Caspritz, a partner with Techno Venture Management, has resigned from the board of Pain Therapeutics Inc. (Nasdaq:PTIE). He will be replaced by Robert Gussin, who most recently served as chief scientific officer and corporate vice president of Johnson & Johnson.

NEWS FROM MONDAY 3/31
Janet Effland has retired from her post as head of health-care investing at Apax Partners. She had spent the past 15 years with Apax (formally known as Patricof & Co. Ventures), and was previously managing director of U.S. investments for British Coal Corp. subsidiary CIN Investment Co.

Sentron Medical has shut down its Senmed Medical Ventures unit, just as the group was raising a new fund. Two of the venture group’s investment managers have teamed back up to form a new organization named Triathlon Medical Ventures.

Southbridge Capital, an Ontario, Canada-based investment firm, has stopped making new venture capital investments.

Acadia Pharmaceuticals, a San Diego-based drug discovery and development company, has raised $25 million in sixth round venture funding. The deal was led by Oxford Bioscience Partners, and included investments from OrbiMed Advisors, Federated Kaufmann Fund, LD Pensions, Hambrecht & Quist Capital Management, ABN AMRO Ventures, Carnegie Fund II Biotechbridge and Dansk Kapitalanlaeg Aktieselskab. As part of the deal, Oxford Bioscience’s Alan Walton will take an Acadia board seat. Acadia was last in the private equity market nearly three years ago when it raised $22 million at a post-money valuation of just over $80 million.

Bluesocket Inc., a Burlington, Mass.-based maker of wireless local area network security systems, has raised $10 million in third round funding led by Menlo Ventures. Hal Calhoun, a managing director with Menlo Ventures, took a Bluesocket board seat as part of the transaction. Other investors included return backers Ascent Venture Partners, Boulder Ventures, Intel Capital, Ironside Ventures, Osborn Capital, Ridgewood Capital and St. Paul Venture Capital.

Incipient Inc., a Waltham, Mass.-based network storage software developer, has raised $15 million in Series B financing led by Globespan Capital Partners (formerly JAFCO Ventures) with participation from return investors Greylock and Sigma Partners. To date, Incipient has raised $25 million.

Atempo, a Paris, France and Mountain View, Calif.-based developer of a software platform for backup and recovery services, has raised $6.2 million in fourth round venture funding. Banc of America Equity Partners, KBC Investco, Plantagenet Partners and Vision Capital accounted for a majority of the investment in the round.

Hotelevision Inc., a New York-based distributor of cable television to luxury hotels, has raised $15 million in Series A funding from WS Investments.

Silverback Systems Inc., a Campbell, Calif.-based provider of IP-based storage networking, has closed its Series C funding round with $15 million. Existing investor Excelsior Venture Partners (managed by U.S. Trust) led the deal, and was joined by fellow return backers Gemini Israel Fund, JP Morgan Partners, Newbury Ventures and Pitango Venture Capital.

The California Public Employees’ Retirement System (CalPERS) has named Rob Feckner as chair of its investment committee, and Priya Mathur as vice chair. Feckner, a galzing specialist for the Napa Valley Unified School District, was elected to the CalPERS Board of Administration in 1999 by classified school employees. Mathur was elected to the Board at the beginning of 2003 as a representative of public agency employees. She is a principal financial analyst for the Bay Area Rapid Transit District.

Advent International has completed a $115 million recapitalization of American Radiology Services Inc. (ARS), in partnership with the company’s existing physician shareholders and Johns Hopkins University. As a result of the transaction, Advent invested $35 million of equity capital and has acquired 60% of Baltimore-based ARS.

Medical Alley, the Minnesota health-care trade association, has announced it is in the process of developing an early-stage venture fund that will be focused on funding medical device, bioscience, and other life sciences and health care-related companies. The investment size target is planned to be between $50,000 and $1 million.

AHL Services Inc., an Arlington, Va.-based provider of marketing support services, announced today that a group led by private equity firm Cravey, Green & Wahlen has agreed to acquire the outstanding shares of AHL not already held by the group, and take the company private. The purchase price represents approximately a 168% premium over the closing market price of AHL’s common stock on March 28. The aggregate value of the transaction, including the amount of debt to be assumed, is approximately $100 million.

The Financial Times is reporting that Close Brothers Private Equity has acquired a 45% stake in ship management company V Ships. The deal is worth approximately $100 million.

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