PE Week Wire — Friday 5/7

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The State of Michigan has amended its open records laws, one year after The University of Michigan released market values and internal rates of return for each of its VC and buyout fund relationships. The school was consequently booted out of a new Sequoia Capital fund, and asked to sell off existing stakes in earlier Sequoia Capital funds (although it did not do so). In order to avoid similar situations going forward, University of Michigan convinced state legislators to pass Senate Bill No. 1032, otherwise known as the “Confidential Research and Investment Information Act.” It was signed into law by Gov. Jennifer Granholm on April 22, and prohibits the University of Michigan from disclosing any private equity portfolio information except for fund names, aggregate amounts of investment and aggregate rates of realized returns. More on this story in both Monday’s PE Week Wire and Monday’s print edition of PE Week, including comments from the University of Michigan, the Michigan Press Association and State Senator Valde Garcia (R-District 22), who lead-sponsored the bill.

 

Gores Investment Corp. has filed to raise $250 million via an IPO of common stock on the Nasdaq under proposed ticker symbol GINV. Gores is a newly-created business development company (BDC) from Los Angeles-based private equity firm Gores Technology Group. www.gores.com

 

Quadrangle Capital Partners and Behrman Capital have invested a total of $30 million to form Daleen Holdings Inc., which will acquire both Daleen Technologies Inc. (OTC BB: DALN) and Protek Telecommunications Solutions Ltd., a UK-based software company. Quadrangle has put up $25 million, while Behrman has invested the remaining $5 million. The aggregate acquisition cost was $37.2 million in stock and cash, including anticipated performance payments. www.protek.com

  

Leonard Green & Partners has agreed to sell portfolio company White Cap Construction Supply Inc. to The Home Depot (NYSE: HD). No deal terms were disclosed, except that the transaction is expected to close within the next 30 days. White Cap Construction is a Santa Ana, Calif.-based distributor of specialty hardware, tools and materials to large and mid-sized construction contractors. www.whitecapdirect.com


IntelliRisk Management Corp., a New York-based provider of customer management solutions, has completed a refinancing. Harvest Partners led the $37.5 million equity investment, while Goldman Sachs led $90 million worth of debt financing. In addition, Wells Fargo Foothill established a $20 million permanent debt facility and a $20 million revolver. 
www.irmc.com

  

NaviSite Inc. (Nasdaq SC: NAVI) has agreed to acquire Surebridge Inc., a Lexington, Mass.-based application service provider. Under terms of the agreement, NaviSite will issue two promissory notes in the aggregate principal amount of $39.5 million, three million shares of NaviSite common stock and the assumption of certain liabilities at closing. The entire transaction reportedly is valued at approximately $54 million. Surebridge has raised over $50 million in VC funding from such firms as Providence Equity Partners, Axxon Capital, BancBoston Capital, Goldman Sachs, Spectrum Equity Investors and Thomas H. Lee Partners. www.surebridge.com

 

CrossMedia Services Inc., a Chicago-based provider of Web-enabled print promotions for brick and mortar retailers, has been jointly acquired by Gannett Co.(NYSE: GCI), Knight Ridder Inc. (NYSE: KRI) and Tribune Co.(NYSE: TRB). No deal terms were disclosed. CrossMedia has raised over $20 million in VC funding from Gabriel Venture Partners, CMS Cos., First Analysis Corp., River Cities Capital Funds and Trident Capital. www.crossmediaservices.com

 

Adobe Systems Inc. (NYSE: ADBE) has agreed to acquire Q-Link Technologies Inc., a Tampa, Fla.-based provider of business process management software. No deal terms were disclosed. Q-Link had raised VC funding from DFJ Gotham Venture Partners and Eyes of Texas Partners. www.adobe.com

 

Biolex Inc., a Pittsboro, N.C.-based protein therapeutics company, has acquired Epicyte Pharmaceutical Inc., a San Diego-based drug company focused on the discovery and development of human monoclonal antibodies. No deal terms were disclosed. Biolex has raised over $37 million in VC funding since its 1997 inception, from investors such as Kitty Hawk Capital, Dentennial Ventures, Dogwood Equity, Dow Chemical Co., Franklin Street Partners, Intersouth Partners, Johnson & Johnson Development Corp., Mitsui & Co. Venture Partners, Quaker BioVentures, Tall Oaks Capital Partners, Uniplan Capital Corp., Wakefield Group, Village Ventures and Academy Funds. Epicyte has raised over $22 million of VC funding since its 1996 inception, from such investors as CMEA Ventures, Dow Chemical Co., Johnson & Johnson Development Corp., Milepost Ventures and Tullis-Dickerson & Co. www.epicyte.com

  

Paul Brentlinger, a partner with Morgenthaler Ventures, has retired from the board of directors at Allegheny Technologies Inc. (NYSE: ATI).

 

Howard Minigh has been elected to the board of directors at MetaMorphix Inc., a Savage, Md.-based life sciences company that uses DNA to improve the global food supply. Minigh is currently a partner with Trishul Capital Group, and previously ran DuPont’s $5 billion Agriculture & Nutrition business.

 

Roger Attick, a venture partner Artiman Ventures since 2000, has been named president and CEO of CeMines Inc., an Evergreen, Colo.-based genomics and proteomics company. Former CEO Bailey Dotson has been named vice chairman of the board of directors.

 

Ulrika Ekman has joined Greenhill & Co. as a managing director and general counsel. She most recently served as a partner and member of the corporate department at David Polk & Wardwell. 

  

Morningstar Inc., a Chicago-based provider of investment research services, has filed to raise $100 million via an IPO of common stock on the NYSE. In 1998, the company received a $91 million strategic investment from Softbank Finance Co., in exchange for 20% of Morningstar’s then-outstanding shares. Softbank currently owns a 19.8% ownership stake. www.morningstar.com

 

PRN Corp., a San Francisco-based operator of an in-store television network, has filed to raise $126.5 million via an IPO of common stock on the Nasdaq under proposed ticker symbol PRNC. Significant shareholders include the Shamrock Capital Growth Fund, Moore Macro Fund, GE Capital, Allen & Co. and the State of Michigan. www.prn.com

 

Inhibitex Inc., an Alpharetta, Ga.-based provider of antibody-based products for the prevention and treatment of bacterial and fungal infections in hospitals, has set its IPO offering price range to $10-$12 per share, and its number of offered shares to 5.9 million. Significant shareholders include New Enterprise Associates, Alliance Technology Ventures, William Blair Capital Partners, Essex Woodlands Health Ventures, Capital Technologies CDPQ Inc. and Burrill & Co. The company also replaced lead underwriter US Bancorp Piper Jaffray with Thomas Weisel Partners. www.inhibitex.com

 

Accent Optical Technologies Inc., a Bend, Ore.-based provider of process control and management tools, has set its IPO offering price and its number of offered shares to 3.7 million. The company has raised $15.9 million in private equity funding, from such investors as FleetBoston Financial and Winfield Capital Corp. www.accentopto.com

 

InfraSource Services Inc., an Aston, Pa.-based specialty contractor for the utility transmission and distribution infrastructure sectors, has reduced its IPO offering price range from $16-$18 per share, down to $13-$15 per share.  The company was formed in May 2003 by Oaktree Capital Management and GFI Energy Ventures in order to acquire InfraSource and certain subsidiaries from Exelon Enterprises Co. www.infrasourceinc.com 

   

Semaphore, a Boston-based consultancy, has been named interim general partner of Northcoast Fund II LP, a Chicago-based VC fund owned by Key Capital Corp., the Ohio State Teachers’ Retirement Systems, Bank of America, Ohio Bureau of Workers Compensation, Fifth-Third Bank, Huntington Bank and LaSalle Bank.

 

 

News from Thursday, May 6

 

 

 

THL Investment Capital Corp. has filed to raise $500 million via an IPO on the Nasdaq under an undetermined ticker symbol. The issuer is a newly-formed business development company sponsored by Boston-based buyout firm Thomas H. Lee Partners.

 

Endeavour Capital has raised approximately $240 million for its fourth venture capital fund, according to documents filed with the SEC. Limited partners include the Oregon Public Employees’ Retirement Fund and the Washington State Investment Board. The Portland, Ore.-based firm also raised a combined $42 million for a pair of affiliated side funds. www.endeavourcapital.com

 

Senator Olympia Snowe (R-ME), chair of the Senate Committee on Small Business and Entrepreneurship, is co-sponsoring a bill that would restore the eligibility of certain small biotech firms to receive grants from the Small Business Innovation Research (SBIR) program. Other co-sponsors include Senators Kitt Bond (R-MO) and Edward Kennedy (D-MA). The bill would reverse a 2000 decision by the SBA’s general counsel, which argued that biotech companies with VC backing are “controlled by big business”, and therefore ineligible for SBIR grants. Snowe and her colleagues believe that the general counsel’s premise was faulty.

 

Aegis Semiconductor Inc., a Woburn, Mass.-based provider of optical components and systems, has raised $10 million in Series C funding. Return backers included St. Paul Venture Capital, Alta Partners, YankeeTek Ventures, Technology Venture Partners, Stata Venture Partners and Megunticook Management. The firm now has raised around $27 million in total VC funding since its 2000 inception. www.aegis-semi.com

Tideway Systems Ltd., a London, UK-based developer of automation technology for global IT enterprises, has received $5.8 million in Series A funding from Apax Partners. The company had previously raised seed financing from NESTA (the National Endowment for Science, Technology & the Arts), Esther Dyson of EDventure Holdings and John Taysom, founder and managing partner of RVC. www.tideway.com

Tao Group Ltd., a Reading, UK-based provider of a multimedia platform for mobile and other digital devices, has received for than $7 million in new VC funding led by Cross Atlantic Capital Partners. The company now has raised approximately $45 million since its 1992 inception as Toa Systems Ltd. www.tao-group.com

  

CSFB Private Equity and MidOcean Partners have jointly acquired Thompson Publishing Group Inc., a Washington, D.C.-based provider of subscription-based publications. No financial terms of the deal were disclosed. www.thompson.com

 

Metro-Goldwyn-Mayer Inc. (NYSE: MGM) has postponed its annual shareholder meeting, in order that it can discuss strategic options. The film studio reportedly has a $5 billion buyout offer on the table from Sony Corp. (NYSE: SNE), Texas Pacific Group and Providence Equity Partners. The meeting originally was scheduled for May 12, but now will be held on June 29.

  

Bradley Wechsler has been elected to the board of directors at Apollo Investment Corp., the business development company recently launched by Apollo Management. He is co-chairman and co-chief executive of Imax Corp. (Nasdaq: IMAX).

 

Doug Brown, a special partner with Advent International and the firm’s former CEO, has resigned from the board of Advent portfolio company Aspen Technology Inc. (Nasdaq: AZPN). Brown currently serves as CEO of Ionics Inc. (NYSE: ION), and is being replaced by former Exodus Communications president and COO Don Casey.

 

Jose Olympio Pereira has joined Credit Suisse First Boston as a managing director and head of investment banking in Brazil. He previously served as head of Brazilian investment banking and co-head for all Latin American activities with Citigroup, and before that worked for Donaldson Luftkin & Jenrette, which since has been acquired by CSFB. www.csfb.com

  

Acadia Pharmaceuticals Inc., a genomics-based drug discovery company headquartered in San Diego, has set its IPO offering price range to $12-$14 per share. The company has raised over $75 million of VC funding since its 1993 inception, with significant shareholders including Oxford Bioscience Partners, OrbiMed Advisors, Federated Kaufman Fund, ABN AMRO Ventures and Hambrecht & Quist Capital Management. www.acadia-pharm.com

 

Senomyx Inc., a La Jolla, Calif.-based biotech company that develops flavors and flavor enhancers for the packaged food and beverage industry, has set its IPO offering price range to $13-$15 per share. The company has raised over $70 million in VC funding since its 1998 inception, from investors like Bay City Capital, Rho Ventures, Merrill Lynch Ventures, Prospect Venture Partners, Domain Associates and Kingsbury Associates. www.senomyx.com

 

 

Spring Mill Venture Fundhas received a limited partner commitment from The Indiana Future Fund, although no specific dollar amount was disclosed. www.springmillvp.com.

 

News from Wednesday 5/5

 

Texas Pacific Group has agreed to lead a $1.4 billion buyout of IASIS Healthcare Corp., a Franklin, Tenn.-based owner and operator of acute care hospitals and other health facilities. In connection with the transaction, IASIS will commence a tender offer and consent solicitation relating to all of its 13% senior subordinated notes due 2009 ($230 million principal amount) and 8.5% senior subordinated notes due 2009 ($100 million principal amount). IASIS was formed by JLL Partners and other investors – including Trimaran Capital Partners — in 1999, and the company will receive “significant new investments” from JLL, company management and certain other current investors. Lehman Brothers and Merrill Lynch are advising Texas Pacific Group on the deal, while Goldman Sachs and Banc of America Securities are advising IASIS. The transaction is expected to close by the end of June. www.iasishealthcare.com

 

Merrimack Pharmaceuticals Inc., a Cambridge, Mass.-based drug company, has raised $28 million in Series C funding. Sorenson Development Inc. led the deal, and was joined by fellow new investors Unilever Technology Ventures and GTC Biotherapeutics. Return backers included Wharton Biotechnology Partners and MS Seed Capital. www.merrimackpharma.com

 

The California State Teachers’ Retirement System (CalSTRS) yesterday approved a new alternative investment plan that could move up to 25% of its $1.5 billion private equity portfolio abroad. More than half of the allocation will go to non-U.S.-based buyout funds, while the rest would be invested in VC and debt-related investment vehicles. 

 

iTRACS Corp., a Chicago-based infrastructure management software company, has raised $16 million in Series B funding. Return backer Mercantile Capital Group led the deal, and was joined by Paragon Ranch, Empire Capital, JI Ventures and Kenilworth Asset Management. The company now has raised $35.5 million in total VC funding since its 1995 inception. www.itracs.com

 

Genetics Squared LLC, an Ann Arbor, Mich.-based biotech company, has received a $1 million private equity investment from CrystalPoint Partners and an unnamed private investor. www.genetics2.com 

Vivendi Universal SA has sold Newsworld International to an investor group led by former Vice President Al Gore, and which also includes Blum Capital Partners and Yucaipa Cos. No deal terms were disclosed. Newsworld currently has 17 million subscribers, and features 24-hour news produced by the Canadian Broadcasting Co. That programming will remain for the time being, although Gore says the plan is to create an independent (i.e. non-conglomerate) news and information network for people in their 20’s. He also claimed that the plan is not to create a “Democratic network or a liberal network or any kind of political network.” 

 

Berkshire Partners and JH Partners have teamed up to recapitalize MD Beauty Inc., a San Francisco-based marketer of health, beauty and cosmetic products. BNP Paribas will lead the deal’s senior debt tranche, while Gleacher Mezzanine and York Street Capital Partners will provide mezzanine funding. No financial terms were disclosed for the deal, which is expected to close during the first two weeks of June. www.bareescentuals.com

 

Lincoln National Corp. (NYSE: LNC) has agreed to sell Delaware International Advisors Ltd. (DIAL) to Hellman & Friedman Corp. and DIAL management. No financial terms of the deal have been disclosed. DIAL is a London-based fund manager with over $19 billion in assets under management for U.S. institutional investors.

 

Carlyle/Riverstone Global Equity and Power Fund II has acquired Glenmoor Ltd., which is parent of the Buckeye Pipe Line Co. Glenmoor received an aggregate purchase price of $235 million in cash. www.buckeye.com

 

Parking Management Fund LP, a private equity partnership managed by The Gates Group has completed its previously-announced acquisition of Imperial Parking Corp., a Vancouver, Canada-based parking operator. Prudential Capital Partners and CapitalWorks LLC teamed up with Gates on the deal. No financial terms were disclosed.

 

Harvest Partners has acquired Communications Supply Corp., a Carol Stream, Ill.-based provider of network infrastructure distribution solutions, from UBS Capital. No deal terms were disclosed. www.gocsc.com

 

Convergys Corp. (NYSE: CVG) has acquired WhisperWire Inc., an Austin, Texas-based provider of sales effectiveness software. No financial terms were disclosed. WhisperWire has raised around $23 million in total VC funding since its 2000 inception, from investors like Austin Ventures, Comdisco Ventures, Bob Allen (former CEO of AT&T) and Reed Hundt (former FCC chairman). www.whisperwire.com

 

Telcordia Technologies Inc. has acquired Granite Systems Inc., a Manchester, N.H.-based provider of an operations support system for the telecom industry. No deal terms were disclosed. Granite Systems had raised $25 million in VC funding from firms like St. Paul Venture Capital and Global Crossing Ventures. www.granite.com

 

SPL Worldgroup has agreed to acquire the major assets of CES International, an Alpharetta, Ga.-based provider of utility outage management solutions. No financial terms were disclosed for the deal, which is expected to close next month. CES has raised over $12 million in VC funding from Cinergy Ventures, Insight Venture Partners and Wexford Management. www.ces.com

 

Michael Papile and David Gesmondi have left Fleet M&A Advisors to join Covington Associates in Boston. The former Fleet folk will lead Covington’s efforts to expand its M&A advisory practice into the industrial and consumer sectors. At Fleet, they had been responsible for providing M&A and other advisory services to FleetBoston Financial Industry Banking clients, including those in the industrial growth, transportation and logistics, and energy sectors.

 

Stuart Fuhlendorf, a former vice president with Lincoln Partners, has been named chief financial officer of Isilon Systems Inc., a Seattle-based provider of intelligent clustered storage systems for digital content. www.isilon.com

 

Kirk Rostron has joined Hovde Capital Advisors as executive vice president and chief operating officer. He will be based in Washington D.C., and will be involved in the firm’s creation of a new private equity fund. Rostron comes from Merrill Lynch & Co., where he served as director and U.S. head of capital introduction. www.hovde.com

 

Transportation Technologies Industries Inc., a Chicago-based maker of truck components, has filed to raise $150 million via an IPO of common stock on the Nasdaq under proposed ticker symbol TTII. The company originally went public in July 1993, but was acquired in a going-private transaction seven years later. Company management and Trimaran Capital co-led the buyout.  www.tti-inc.com

 

Blackboard Inc., a Washington, D.C.-based provider of software to the education industry, has set its IPO offering price range to $13-$15, and set its number of offered shares to 5.8 million. The company has raised over $100 million in total VC funding since its 1997 inception, with significant shareholders including Oak Hill Capital Partners, Internet Capital Group, Carlyle Group, Novak Biddle Venture Partners and Microsoft Corp. www.blackboard.com

   

Kleiner Perkins Caufield & Byersclosed its eleventh fund with $400 million last week, according to the Wall Street Journal.

 

The Caisse de dépôt et placement du Québecsaid yesterday that it has decided to outsource management of its existing portfolio of direct investments (approx. Cdn$300 million) to private partners. The mandate to find such partners has been given to Ernst & Young.

 

News from Tuesday 5/4

Castle Harlan has agreed to acquire Caribbean Restaurants LLC, which operates 165 Burger King restaurants in Puerto Rico. The deal is valued at $340 million. Castle Harlan will purchase Caribbean Restaurants from Oak Hill Capital Partners, which acquired the company in Sept. 1999 as part of a management buyout that also included American Securities Capital Partners.

 

Benchmark Capital is planning to hold a $400 million close on its fifth fund next month. The vehicle already is oversubscribed and is not accepting any new investors. In addition, Benchmark co-founder Andy Rachleff plans to scale back his work hours and is not listed as a general partner on the fund.

 

Microbia Inc., a Cambridge, Mass.-based drug company focused on gastrointestinal disorders, has raised $40 million in fourth-round funding. Paperboy Ventures led the deal, and was joined by fellow new investors Invus, Bio*One Capital, the Singapore Economic Development Board, Alton Ltd. and Linkagene. Previous investors also participated. The company now has raised over $105 million since its 1998 inception. www.microbia.com

 

Trilogy Health Services LLC, a Louisville, Ky.-based operator of senior healthcare centers in the Midwest, has received a $26 million private equity investment. Frontenac Co. led the deal, and was joined by Blue Chip Venture Co., Salix Ventures and company management.  www.trilogyhs.com

 

Microsulis Corp., a Waltham, Mass.-based medical research company, has raised $45 million in new private equity funding. No investor details were disclosed, except that the first $25 million came from a pair of VC firms, and the rest came from other new and existing shareholders. www.Microsulis.us

 

INVIDI Technologies Corp., an Edmonton, Canada-based provider of advertising technology for the broadband industry, has raised US$12 million in Series A funding. Menlo Ventures led the round, and was joined by EnerTech Capital and the Development Bank of Canada. www.invidi.com

 

InnoDesk LLC, a Beachwood, Ohio-based maker of cap-less highlighters and markers, has raised $2 million in Series B funding led by GMG Capital Partners.  www.innodesk.com

 

Capnia Inc., a Los Gatos, Calif.-based biomedical company developing therapeutic products based on a medical gas delivery platform, has raised $12 million in Series B funding. Teknoinvest led the deal, and was joined by BioAsia, Asset Management and Novel Bioventures. www.capnia.com

 

Acologix Inc., an Emeryville, Calif.-based biopharmaceutical company, has raised $40 million in Series B funding. Nomura Securities Co. led the deal, and was joined by.fellow new investors Nomura Research and Advisory Co., Softbank Investment Co., SMBC Capital Co. and Tokio Marine and Fire Insurance Co. Return backers included JAIC America and AquaRIMCO. www.acologix.com

 

Webify Solutions Inc., an Austin, Texas-based provider of Web services-enabled business applications, has raised $7 million in Series B funding. Viventures and Dali Hook Partners co-led the round, and were joined by fellow new investor Eyes of Texas and return backer Trhe Entrepreneur’s Fund. www.webifysolutions.com

 

BioLineRx Ltd., a Jerusalem, Israel-based drug development company, has raised around $4 million in new venture capital funding from Star Ventures and Yehuda Zisapel. The company had previously secured $11 million in startup capital from Teva Pharmacaeuticals, Pitango Venture Capital, Giza Venture Capital, Hadasit (a subsidiary of the Hadassah Medical Center) and the Jerusalem Development Authority. www.biolinerx.com

 

Aurora Capital Group has agreed to sell Autocam Corp. to an investor syndicate that includes Transportation Resource Partners, Goldman Sachs Capital Partners and John Kennedy, CEO of Autocam. The deal is valued at $390 million, and is expected to close by the end of the second quarter. Autocam is a Kentwood, Mich.-based provider of close tolerance, metal components for automotive applications. The company has manufacturing facilities in North America, France, Brazil and China. www.autocam.com

 

 

Brazos Private Equity Partners has sold Rennhack Marketing Services Inc., to an affiliate of H.I.G. Capital.  Rennhack is a Dallas-based provider of premiums and incentive marketing services to domestic financial institutions, and was acquired by Brazos in May 2002. Financial terms of the transaction were not disclosed.

 

Red Diamond Capital and Century Park Capital Partners have acquired Hi-Tech Rubber Inc., an Anaheim, Calif.-based molder of precision “elastomeric” components. Company management will remain with the company, and have invested in the transaction.

   

Meeting Maker Inc. has acquired WebEvent Inc., an Andover, Mass.-based provider of collaborative time-management software solutions. No deal terms were disclosed. WebEvent has raised VC funding from Claflin Capital Management and Egan-Managed Capital. All WebEvent operations will be moved from Andover to Meeting Maker’s Waltham, Mass.-based headquarters. www.webevent.com

   

David Lundeen, a general partner with Beekman Ventures and a partner with Watershed Capital, has joined the board of directors at Northgate Innovations Inc. (OTC BB: NGTE). www.northgate.com

 

David Lee has joined the law firm of Kaye Scholer LLP as counsel in the firm’s Chicago-based private equity practice. He most recently served as a partner with Kirkland & Ellis LLP. www.kayescholer.com

  

Live Oak Capital LLC of Dallas has launched its inaugural investment fund, which will purchase secondary interests in private equity partnerships. www.liveoaksecondary.com

 

 

Memec Inc., a San Diego-based provider of semiconductor products, has filed to raise $100 million via an IPO of common stock on the NYSE under proposed ticker symbol MEC. The company is majority owned by Permira.  www.memec.com

 

Alibris Inc., an Emeryville, Calif.-based operator of an online marketplace for used and rare books, has set its IPO offering price range to $10-$14 per share. The company has raised over $60 million in VC funding since its 1994 inception, with significant shareholders including CMGI @Ventures, Lightspeed Venture Partners and Aberdare Ventures. www.alibris.com

 

W&T Offshore Inc., a Houston, Texas-based oil and gas company, has filed to raise $201.25 mill