PE Week Wire — Friday 8/16

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Proxima Therapeutics Inc., an Alpharetta, Ga.-based developer and marketer of site-specific cancer treatments, today announced that it has raised $14 million in a Series E round of financing, bringing the total raised by the company since 1995 to $48.6 million. The financing was led by Montagu Newhall Associates, a Baltimore-based venture capital management company that has made numerous investments in the health care and life sciences area, and included significant support from Pilgrim Baxter Hybrid Partners. Returning investors included Hillman Medical Ventures, New Enterprise Associates, Domain Associates, Catalyst Ventures, Lovett Miller & Company, Merrill Lynch Ventures and Boston Scientific Corporation.

Actona Technologies Inc. a Los Gatos, Calif.-based provider of solutions for extending storage and applications over the Wide Area Network (WAN), today announced that it has secured $7 million in second round financing from leading venture capital firms Sequoia Capital, Evergreen Partners and Fantine Group. The company recently changed its name from VersEdge Technologies Inc. to Actona Technologies Inc. Actona will use the funding to further develop its core technology and expand its business operations.

TA Associates announced today the successful recapitalization of its portfolio company, MedQuest Associates, led by JPMorgan Partners for $350 million. Headquartered in Atlanta, MedQuest is a leading provider of high-quality, fixed-site outpatient diagnostic imaging services. The company operates 72 imaging centers in 12 states, primarily in the Southern United States. TA Associates acquired a minority interest in MedQuest in November 1999 to support the company’s continued growth of its diagnostic imaging centers. TA made a follow-on investment in 2001 to provide additional expansion capital to the company. Since TA’s first investment in the company, the number of MedQuest’s diagnostic imaging centers has grown over 200%.

Genstar Capital today announced the closing of an $21 million investment in Installs Inc LLC, a privately-held company based in Buffalo, N.Y. Prior to the closing, the company was known as DigiVision Satellite Services. Installs Inc is a leading third-party provider of in-home consumer electronic installation services. Terms of the transaction were not disclosed.

Michael Klein has been named CEO of Citigroup’s global corporate and investment bank (GCIB in Europe, and will assume responsibility as the Chairman of the European Operating Committee. He will continue to serve as co-head of the Global Investment Banking Division. Klein joined SSB in 1985 as a member of the Salomon Smith Barney Merger and Acquisition Group. In 1999, he was named a Head of the Firm’s European Investment Bank. Prior to that he was responsible for the firms Private Equity advisory practice. In 2000, he was named Co-Head of Firm’s Global Investment Bank.

SRI/Surgical Express Inc. (Nasdaq:STRC) today announced that N. John Simmons Jr. was elected as Chairman of the Board. A director of SRI/Surgicalsince February 2001, John is currently President of Quantum Capital Partners, a Tampa-based venture capital investment firm. Previously, John was Chief Financial Officer of Checkers Drive-In Restaurants, Inc., Vice President and Controller of Eckerd Corporation, and served 17 years with KPMG Peat Marwick.

MathStar, a provider of high speed, high performance communications chips, today announced that it successfully raised $15.3 million in additional funding. Investors include leading institutional investors, a Minneapolis-based venture capital firm, and angel investors.

Wilson Sonsini Goodrich & Rosati, one of Silicon Valley’s leading tech law firms, plans to cut its administrative staff my approximately 100 employees. The firm is also planning additional layoffs among its associate ranks.

News From Thursday 8/15
Florida Digital Network announced that a group led by MC Ventures Partners has invested $35 million in the company, allowing it to retire its bank debt and continue aggressively pursuing sales and expansion efforts in Florida’s major markets. CEO Mike Gallagher said Florida Digital would seek to capitalize on current market conditions that have seen a number of struggling telecom carriers quit markets throughout the state. The company has now raised a total of $123 million over four rounds of funding.

Agilera Inc. announced that it is acquiring United Messaging Inc. (UMI), a Malvern, Pa.-based company that received over $105 million in venture capital funding from such firms as Adams Street Partners, Broadview Capital Partners, Comcast Interactive, Internet Capital Group, Labrador Ventures, Oak Investment Partners and First Union Capital Partners. The company’s last funding round was a $70 million Series C deal in late 2000, at which point UMI received a post-money valuation of $200 million. Details of the acquisition were not disclosed.

Golden LEAF, the foundation established to use money from the tobacco settlement for the long-term economic advancement of North Carolina, has announced an $85.4 million economic stimulus package it believes will significantly improve North Carolina’s economy and make the state a leader in the biosciences industry. The centerpiece of the package is a commitment to invest $42 million for investments in venture debt and venture capital fund that, in turn, will invest in biopharmaceutical companies developing and manufacturing their products in North Carolina.

CTI Squared (CTI2), a San Mateo, Calif.-based developer of communications and messaging solutions for service providers and enterprises, announced today that Shai Schiller has joined the company as chairman of the board. Mr. Schiller is replacing the current chairman, Aaron Mankovski, a managing director at Pitango venture capital.

ARTISTdirect Inc. (Nasdaq:ARTD) today announced that its Board of Directors has approved an Agreement to accelerate up to $10 million of its existing funding commitment to ARTISTdirect Records in exchange for an additional equity interest of as much as 20% of the label. Any and all advances made pursuant to the Agreement will be credited toward satisfaction of the company’s overall commitment and its obligation for 2003. Furthermore, the Agreement contains a provision designed to provide the Company with a minimum compound annual rate of return of 25% on the accelerated funding. ARTISTdirect Records is the company’s co-venture record label with ARTISTdirect Chairman and CEO Ted Field, and BMG Entertainment .

Craig Sherman and Mark Handfelt have both joined Wilson Sonsini Goodrich & Rosati as partners in the law firm’s Kirkland, Wash. office. Both men were most recently with Venture Law Group as a managing partner and a partner, respectively.

Laura Druyan has been promoted to the position of general partner at Allegis Capital. Druyan joined Allegis in 2000 as a principal, having previously been responsible for Silicon Graphics Inc.’s desktop software business.

News From Wednesday 8/14
V3 Systems, a Charlotte, N.C.-based provider of innovative enterprise supply chain execution and warehouse management applications for automating business processes and providing supply chain visibility across global distribution networks, announced today it has received $11.5 million in a Series A private placement from four top-tier Mid-Atlantic-based venture firms. Sterling Venture Partners led the round with Draper Atlantic Management, SpaceVest, and Updata Venture Partners all participating in the syndicate. Hyde Park Capital Advisors of Tampa, Fla. served as V3 Systems’ investment bank in this offering.

Finatus Inc., a Portland, Ore.-based provider of online environmental, health and safety regulatory compliance services, has completed a second round of financing, securing an additional $2.4 million in venture capital. Second-round investors include SmartForest Ventures and American River Ventures, marking a re-investment by SmartForest, lead investor in a 2001 Finatus funding round of $2.4 million. This funding is an extension of a Series A round, bringing to a total of $4.8 million in financing Finatus has closed since it was founded in January 2000.

Quad Ventures LLC today announced the closing of Quad Venture Partners LP, a $100 million private equity fund focused on the $815 billion U.S. education industry. New York-based Quad’s limited partners include Citigroup, JPMorgan Chase, Merrill Lynch Community Development, MBNA, North Fork Bank, Prudential Financial, Wachovia, Washington Mutual Bank, Wells Fargo, Wilder Foundation, and a number of family investment groups.

U.S. Bancorp Piper Jaffray is pleased to announce that Jeff A. Rosenkranz has joined the firm as a managing director in the firm’s middle market mergers and acquisitions (M&A) group. He will lead Piper Jaffray’s Chicago investment banking office, and with Glenn Gurtcheff, will co-head Piper Jaffray’s middle market M&A effort. Gurtcheff is based in the firm’s Minneapolis headquarters office. Rosenkranz, 38, has more than 16 years middle market corporate finance experience and joins Piper Jaffray from Merrill Lynch & Co., in Chicago and New York, where he was a managing director in their exclusive sales group.

Galileo Genomics Inc., a Montreal-based population genetics company, today announced it has secured an additional $6.5 million in equity and debt funding. Bio Fund of Finland, the equity investor, subscribed to $3 million in shares and Investissement Quebec, through its subsidiary La Financiere du Quebec, is providing $3.5 million in debt financing. Galileo’s project will create 20 new specialized jobs and attest to Quebec’s vitality and expertise in the genomic sector.

Spherics Inc. today announced that it has completed a Series B equity financing, raising $10 million to advance the development of its proprietary bioadhesive drug delivery technologies. Institutional investors involved in the financing included Zero Stage Capital, CB Health Ventures, PODHolding Inc, and Eastman Ventures.

Arxan Technologies, a West Lafayette, Ind.-based provider of software anti-tamper solutions, today announced a strategic round of venture funding totaling $3 million. The round was led by Trident Capital. Additional investors include Dunrath Capital. The investment will enable Arxan to expand product and market development activities in efforts to extend its position as a leader in the rapidly growing software anti-tamper markets.

eFinancial News is reporting that T-Venture, the venture capital arm of Deutsche Telekom, has appointed Klaus Radermacher as its new chief technology officer. Radermacher was most recently CEO of multimedia solutions at Deutsche Telekom’s consulting unit. The report also says that the $489 million T-Ventures fund will be split up into four, equally-capitalized funds which will match up with the parent firm’s four business groups.
News From Tuesday 8/13
IntraLuminal Therapeutics Inc., a Carlsbad, Calif.-based medical device company that has developed a guided crossing wire system for safely crossing total occlusions (TO), has recently completed a financing round. The investment is structured in two tranches, with the first $20.0 million tranche available immediately. The second tranche of $10.0 million will be triggered by completion of specific milestones.

Archemix Corp., a Cambridge, Mass.-based pioneer in the discovery and development of selected nucleic acids both as drugs (aptamers) and as tools for drug discovery and development (RiboReporters™), announced today that it has completed its $51.75 million