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The sun is shining, the grass is growing, and the Red Sox fans are complaining. In other words, its time for
Top 10 Things Ryan would like to see Dan write about in 2005:
10. My trusty new Honda (why I finally stopped tree hugging and went foreign).
9. Bain Capital buys the NHL and names Charlie Hipwood (Ryan’s boss) Commissioner
8. Dan finally takes the train to NYC and swears to never complain about traveling there again
7. Olympic standard steroid testing for all VCs (were the late 90’s the steroid era?)
6. Dan replaces his lawn with Astroturf
5. All Hedge Funds and PE funds merge into one mega fund…Minimum deal size $500 Billion
4. PE Week Wire hits 50,000 subscribers. Thomson Financial throws party for subscribers headlined by Van Halen.
3. Dan Primack wins Pulitzer Prize for Investigative Journalism – Testa Hurwitz: The Inside Truth
Menlo Ventures on Tuesday held a first and final closing on its tenth venture capital fund. The vehicle came in at $1.2 billion, which was 20% higher than its $1 billion target. It is not expected to begin deploying capital until the second half of 2005, due to some remaining dry powder in Menlo Ventures IX. www.menloventures.com
Ambrx Inc., a
California Governor Arnold Schwarzenegger has backed off his plan to overhaul
Applied Microstructures Inc., a San Jose, Calif.-based provider of solutions that enable the vapor deposition of molecular-level films for nanotech applications, has raised $8.5 million in Series B funding. Sierra Ventures led the deal, and was joined by return backers Compass Technology Partners and Horizon Ventures. www.appliedmst.com
Epocal Inc., an Ottawa, Ontario-based developer of enterprise point-of-care blood diagnostic products, has raised Cdn$5 million in Series B funding led by Genesys Capital Partners. This represents a first close for the Series B round, with a final close scheduled to occur in the next several months. www.epocal.com
Sasken Communications Technologies Ltd., an India-based provider of telecom R&D outsourcing solutions, has received $10 million in equity funding from existing strategic partner Nortel Networks Ltd. (NYSE: NT). www.sasken.com www.nortel.com
Sparus Software, a France-based provider of network infrastructure middleware, has raised 1 million euros in startup funding from AXA Private Equity. www.sparus-software.com
TEMA India Ltd., an India-based manufacturer of shell and tube heat exchangers for the energy market, has received $12 million in private equity funding from Actis. www.actis.is
Boots Group PLC has put its healthcare division on the auction block, in an effort to raise approximately Gbp1.25 billion. GlaxoSmithKline has express interest, as have several private equity firms. In related news, the Wall Street Journal is reporting that firms like Blackstone Group, Texas Pacific Group, CVC Capital Partners and Cinven could try to buy out Boots in its entirety, which could require upwards of Gbp4.6 billion ($8.7 billion). www.boots-plc.com
Adelphia Corp. has tentatively agreed to be acquired for nearly $18 billion by Comcast Corp. and Time Warner Inc., according to multiple reports. The apparent agreement signals a loss for Kohlberg Kravis Roberts & Co. and Providence Equity Partners, which had submitted a rival bid. www.adelphia.com
CapMan Capital Management has completed its acquisition of mechanical power transmission equipment maker Metso Drives from Finland-based Metso Corp. The deal is valued at approximately 98 million euros. www.capman.com www.metsodrives.com
Terra Firma, a UK-based private equity firm, has agreed to acquire publicly-traded water utility East
Yellow Brick Road, a European directories publisher controlled by 3i Group and VSS Communications Partners, reportedly is receiving $2.6 billion buyout interest from unidentified hedge funds. It already has offers on the table from CVC Capital Partners, Blackstone Group, BC Partners and Macquarie Bank. www.ybrgroup.com
Falconhead Capital has sold its position in Maritime Telecommunications Network to Perseus LLC. MTN is a Pembroke Pines, Fla.-based provider of global communications to the maritime industry. No terms of the sale were disclosed, although press reports put the price at $110 million. www.mtnsat.com
China Techfaith Wireless Communication Technology Ltd., a
Gala, a UK-based bingo game operator, reportedly is looking at banks to underwrite an IPO that would value the company at around Gbp1.75 billion. The company is majority-owned by private equity firms Candover and Cinven. www.galagroup.co.uk
Siemens Communications Inc., a unit of Siemens AG (NYSE: SI), has acquired Myrio Corp., a Kirkland, Wash.-based provider of middleware and applications for home entertainment solutions. Siemens originally took a minority stake in Myrio via a venture capital deal in late 2003, but terms of the actual acquisition are not being disclosed. Myrio raised over $45 million in total VC funding since its 1998 inception, from groups like Ridgewood Capital Management, Alexander Hutton Venture Partners, NeoCarta Ventures and Siemens Venture Capital. www.siemens.com www.myrio.com
Wicks Medical Information LLC has agreed to acquire Jobson Publishing LLC, a Bloomfield, N.J.-based specialty healthcare communications, education and publishing company. No financial terms were disclosed. Jobson Publishing currently is owned by Boston Ventures. www.jobson.com
The Firm, a
Greenfield Online Inc. (Nasdaq: SRVY) has acquired Ciao AG, a
Sequoia Capital is raising a later-stage venture capital fund, according to PE Insider. This would be the Menlo Park, Calif.-based firm’s third such effort, and is being marketed with a target capitalization of between $475 million and $525 million. www.sequoiacap.com
The Private Equity Industry Guidelines Group (PEIGG) has released its
Vikram Gandhi is joining Credit Suisse First Boston as head of its Global Financial Institutions Group. He most recently served as co-head of the Financial Institutions Group at Morgan Stanley. www.csfb.com
Kathryn Munro, a principal with private equity firm BridgeWest LLC, has joined the board of Knight Transportation Inc. (NYSE: KNX).
Jan Cotta has joined Germany-based fund-of-funds manager VCM Venture Capital Management as a managing director and head of institutional marketing and client relationships, according to PrivateEquityOnline. www.vcm-capital.de
Correction: Yesterday’s note on Odyssey Inv*stment Partners’ pending acquisition of Neff Corp. (OTC: NFFCA) should have said that the deal values Neff’s equity at $240.5 million, not that Odyssey itself will provide $240.5 million of equity itself (it will provide a portion, while the rest will include other financing).
Updates: SiliconBeat.com is reporting that Jan Gullett has been named to replace Mark Pincus as CEO of Tribe Networks. Also, the entire value of the Spectrum Equity-led leveraged recap of Classic Media is $175 million, including the reported $75 million in equity from Spectrum.
Thursday, April 7
A few quick notes before the trusty Pontiac heads down to Providence Airport, where I’ll catch my plane to Raleigh-Durham for the VCIC event:
** Boston-based Summit Partners is in the fund-raising market with two offerings: One focused on late-stage private equity and LBOs, and the other focused on growth-stage venture capital. Limited partners expect the LBO fund to easily hit its $3 billion target, particularly given its predecessor’s recent run of successful IPOs. The VC fund is arguably a bit less certain with its $250 million to $300 million target, particularly since Summit’s original VC fund was still underwater as of the last time CalPERS updated its performance figures (9/30/04). Moreover, the venture group has lost three general partners since being founded, including founder Kip Sheeline (now with Levensohn Venture Partners) and Marc Friend, whose departure was first reported in yesterday’s PE Week Wire.
There are, however, a few things going for the VC fund-raising effort. First, Summit is raising both funds at the same time, which means that it could apply some not-so-subtle pressure to LPs looking for access to the LBO fund (I’m not saying they’re doing that, just that it’s an available – and not unprecedented — option). Second, much of the original VC fund’s troubles came from its 1999 vintage and early-stage focus. The vintage for Summit VC II is obviously changed, but the focus also has moved a bit later, which is a better fit with the firm’s exhaustive deal-sourcing system. Oh, and they also have dropped the original VC fund’s “Accelerator” tag, which made it sound like what Bill Gross might call his NASCAR team, if he were to buy one.
Finally, a few personnel notes on Summit. Marc Friend says he is leaving on good terms, and that he simply wants to do earlier-stage inv*sting than Summit is pursuing (like what he used to do at USVP). His immediate plans are a trip with his wife to China and India, although he likely will join a West Coast firm upon his return. Also, I made a mistake yesterday in saying that Tom Jennings would be moving from Boston to Palo Alto. He will stay put in Beantown, although the part about his impending promotion from VP to principal was accurate (all apologies Tom).
** Sticking on the personnel tip for a moment, a pair of Silicon Valley happenings to share. First, Intel Capital has lost yet another senior executive. This time it’s Claude Leglise, whose last day will be Friday. You might remember that Intel Capital president John Miner announced his resignation on March 24, which really is a lot of senior-level transition for one firm. even one as large as Intel Capital. Go to www.privateequityweek.com for the complete story.
** In unrelated personnel news, PE Week has learned that Mark Pincus has stepped down as CEO of online classified company Tribe Networks Inc. This is similar to the transition that occurred at Pincus’ previous company Support.com, and basically is a case of Pincus being a better software guy than managerial/marketing guy. He plans to stay at the firm on a fulltime basis, and says that the search for a new CEO began late last year. No word yet on the newbie’s identity, but a formal announcement is expected to come by the end of April.
** I never used to care much for The West Wing, but last night’s episode was the single best hour of dramatic television I’ve seen since the pilot for NYPD Blue. Simply amazing.
** Tomorrow’s PE Week Wire column will be written by Ryan Delaney of Stag Capital, who won our 3rd Annual March Madness contest (this is part of his prize). I’ll still be taking care of the news section from down in North Carolina, however, and the email will originate from the regular domain (i.e., no need to change your settings). Have a great weekend.
Elevation Partners has lost out in its efforts to acquire UK-based Eidos PLC, a publicly-traded video game maker known for its “Tomb Raider” series. The Menlo Park, Calif.-based buyout firm agreed last month to buy Eidos for 50 pence per share (approx. $135 million), but one day later was bested by a 72.8 pence per share offer from rival game-maker SCi Entertainment Group PLC. Eidos has now accepted the SCi Entertainment offer, after Elevation failed to increase its bid. www.eidos.com www.elevation.com
Claude Leglise, a vice president at Intel Capital, will step down this Friday, in the second major departure from the venture unit in less than a month. Two weeks ago, Intel Capital President John Miner announced that his last day would be June 1. www.intel.com
Spectrum Equity Investors reportedly has sponsored a leveraged recap of Classic Media Inc., a New York-based owner of cartoon and television characters like Mr. Magoo and The Lone Ranger. Spectrum’s participation came in at around $75 million, with existing shareholders like Pegasus Capital Advisors and Random House Ventures retaining a minority position. In related news, Classic Media Inc. is considering a bit for children’s television programmer HIT Entertainment PLC, which would be backed by both Spectrum and Thomas H. Lee Partners. Both Apax Partners and Lions Gate Entertainment already have made bits for HIT. www.classicmedia.com
Picolight Inc., a Boulder, Colo.-based maker of optical transceivers and components, has held a $13 million first close on its latest round of VC funding. The company hopes to raise between $4 million and $7 million in additional capital during the second quarter. It now has raised over $100 million in total private funding since its 1996 inception. www.picolight.com
Third Brigade Inc., an Ottawa, Ontario-based provider of deep host intrusion prevention solutions, has raised Cdn$6 million in Series A funding. BCE Capital and Celtic House Venture Partners co-led the deal, and were joined by seed-stage backer BDC Venture Capital. www.thirdbrigade.com
Diagnostic Ultrasound Corp., a Bothell, Wash.-based medical device company, has closed the first tranche of a $34 million capital commitment from DW Healthcare Partners and Rho Private Equity. www.dxu.com
EnOcean GmbH, a Germany-based provider of battery-less switches and sensors, has raised 10 million euros in third-round funding. Backers included 3i Group, BayTech Venture Capital, SAM Private Equity, Wellington Partners and Siemens Venture Capital. www.enocean.com
Kohlberg, Kravis, Roberts & Co. has completed its acquisition of Toronto-based building products company Masonite International Corp. (NYSE: MHM), at a price of Cdn$42.25 per share. www.masonite.com www.kkr.com
Barclays Private Equity and 3i Group have sold their ownership position in INBIS Group PLC to AssystemBrime SA for an undisclosed amount. INBIS Group is a UK-based provider of independent design and engineering support services, which was formed via a 1997 management buyout co-sponsored by Barclays and 3i. www.inbis.com
Odyssey Inv*stment Partners has agreed to acquire Neff Corp. (OTC: NFFCA), a Miami, Fla.-based construction and industrial equipment rental company. The deal is valued at $510 million, including $240.5 million in equity. Company management will retain a significant ownership position.
ClearLight Partners has led buyout of Switchcraft Holdings Inc., a Chicago-based maker of electronic connectors and cable assemblies. Company management also participated. No financial terms were disclosed for the deal, which also included senior note financing from Antares Capital and subordinated note funding from Black Canyon Capital. www.clearlightpartners.com www.switchcraft.com
Perry Capital has agreed to acquire mid-market commercial finance companies Capital Factors Inc. and Capital Tempfunds Inc. from the Union Planters Bank, a division of Regions Financial Corp. (NYSE: RF). No financial terms of the acquisition are being disclosed, although Perry Capital has said that it will inv*st up to $100 million to support its new acquisitions. www.perrycapital.com
CVC Europe says that it has given up its battle to buy publicly-traded Swiss flooring company Forbo International SA. www.cvceurope.com
The Carlyle Group has acquired French semiconductor metrology company Cameca from an inv*stor consortium led by Barclays Private Equity, according to Dow Jones. www.cameca.fr
Accent Equity Partners has agreed to buy the BakeMark Sweden unit of Dutch food conglomerate CSM NV for approximately 8.75 million euros, according to Dutch press reports.
Freightcar America Inc., a Chicago-based maker of railroad freight cars, closed its first day of trading up 10.68% to $21.03 per share. The company traces its roots back to 1901, and was owned by Bethlehem Steep Corp. from 1923 to 1991. It then was purchased by Johnstown America Industries (now known as TTII), and resold in June 1999 to an investor group that included company management, Trimaran Capital Partners and John Hancock Life Insurance Co. www.johnstownamerica.com
Progress Software Corp. (Nasdaq: PRGS) has acquired Apama Inc., a Cambridge, UK-based provider of event steam processing technology, with a particular focus on the financial services industry. The deal was valued at $25 million, net of cash acquired. Apama was founded in 1999, and had raised VC funding from The Carlyle Group, Anschutz Inv*stment Co. and Providence Inv*stment Company Ltd. www.progress.com www.apama.com
Esmertec AG, a Switzerland-based provider of software for mobile phones and embedded devices, has taken a majority ownership position in eValley Inc., a Japan-based exponent for Java software development. No financial terms were disclosed for the deal. Esmertec took a minority stake in eValley in July 2002, with an option for controlling interest, which now has been exercised. Esmertec has raised VC funding from Credit Lyonnais Private Equity, Partners Group, Sofinnova Partners, Rothschild Ventures, BV Group Ventures, Earlybird Venture Capital and BV Group Ventures. www.esmertec.com www.evalley.co.jp
Inter-Atlantic Group has launched its second private equity fund focused on the financial services industry. It is targeting $150 million, with Bentley Securities and Trinity Group serving as placement agents. www.interatlanticgroup.com
3i Group is considering a sale of up to 800 “legacy portfolio companies” on the secondary market. The news was reported in this morning’s Times of London, and was confirmed by a 3i spokeswoman. The companies likely would be sold either individually or in small groups, and 3i says that there is no sense of urgency. www.3i.com
AXA Private Equity is planning to launch venture capital-focused offices in both London and Singapore. Ivan Bernard-Brunel, a former principal with Crescendo Ventures, will run the office, assisted by former Credit Lyonnias professional Pierre-Emmanuel Boulic. No information was disclosed about Singapore-based personnel. www.axaprivateequity.fr
Bard Capital Partners has launched as a mid-market buyout firms with offices in New York and Denver. It also announced its first acquisition, by buying the Contractor and Industrial Products Group of International Surface Preparation Corp. The deal was valued at $130 million.
The Ontario Teachers’ Pension Plan has promoted Mark Wiseman to vice president of funds and inv*stments. Since joining OTPP in 2002, he has been responsible for all direct and indirect private equity commitments. In other OTPP news, the group also has promoted Rosemarie McClean to vice president of member services and Ron Lepin to vice president of infrastructure. www.otpp.com
Rod Paige, former U.S. Secretary of Education, has joined the advisory board of New York-based private equity firm Leeds Weld & Co. www.leedsweld.com
Brown Gibbons Lang & Co. has promoted four managing directors to the position of partner, and said that co-founders Michael Gibbons and Scott Lang have assumed the titles of chairman and CEO, respectively. The new partners are Scott Berlin, James Miller, Stephen Miles and David Sulaski. In other personnel news, the firm has promoted William Watkins to director, Cameron Miele to vice president, Scott Hasley to director and Michael Shaffer to senior associate. www.bglco.com
Marilyn Selby Okoshi has joined law firm Katten Muchin Zavis Rosenman as a partner, where she will focus on the organization and representation of hedge funds and private equity funds. She previously served as a partner with Coudert Brothers LLP. www.kmzr.com
Wednesday, April 6
The sun is shining, oil prices are rising and no number of World Series wins will lessen my distain for Derek Jeter. In other words, it’s time for some Friday Feedback (the premature Wednesday edition). We haven’t done this for a while, so advance apologies for the lack of a coherent theme:
A couple of emails on the new Archon Ventures (or perhaps it’s Spark Capital) fund being raised by Todd Dagres and Santo Politi. First up is Tim: “I think that the focus on the media/entertainment/tech intersection is a very real market opportunity, but am not sure that LPs agree enough to commit to such a niche-focused fund. It’s kind of one of those things that LPs hope their tech VCs pay attention to, but not that they pay all of their attention to.” Deb adds: “Great idea for a fund, but a 25% carry for a first-time team? If they pull that off, then it’s just further proof that LPs will do anything to approach their allocations.”
Regular respondent James had a quick note about the pending SunGard buyout, and its potential for drawing old-guard LBO shops like KKR and Blackstone further into the tech market: “If you’re right that the big boys will use SunGard as a way to get their toes wet in technology, then Silver Lake may have made a big mistake [in putting together the consortium]. They’ve basically had the tech buyout market to themselves, with just a couple other firms… But if the Old Guard does well enough on SunGard that they are convinced to do other similar deals, then Silver Lake has basically just raised the price for most of the auctions it gets into.” Interesting point James, and I’ve been told that it was briefly considered by both Silver Lake and Texas Pacific Group, although apparently not too seriously…
Patrick writes in to ask the months-old question about why I’m so interested in the Testa Hurwitz saga. More specifically, he asked me to lose that interest. He writes: “I’ve found the PE Week Wire to be very valuable, but why do you talk so much about Testa? I’m a PE professional and I don’t care about some random law firm regardless of how many PE/VC deals they’ve worked on.” The short answer is that THT was essentially the bedrock of Boston’s VC/PE community, in a way that likely will not, or cannot, be duplicated. Nonetheless, I have promised no more significant discussion of that matter, and intend to keep to my word (the preceding paragraph, not included).
Finally, Robert from New York wrote in this morning to ask how I’m feeling about my beloved Red Sox. The short answer is lousy, but mainly because I’m still aghast at how the team again increased ticket prices without significantly increasing payroll. My uncle yesterday compared Red Sox ticket prices to gas prices, in that there is no significant outcry that they keep rising. The difference, I told him, was that high-priced gas still works the same as low-priced gas. If the Sox perform significantly worse than last year, then people will begin to complain.
National Waterworks Holdings Inc., a Waco, Texas-based provider of water and wastewater transmission products in the U.S., has filed to raise $400 million via an IPO of common stock, which would trade on the NYSE under ticker symbol NWW. National Waterworks is controlled by JPMorgan Partners and Thomas H. Lee Partners, each of which holds a 43.1% pre-IPO ownership position. www.nationalwaterworks.com
FeedBurner, a Chicago-based provider of RSS/Atom post-processing services for online publishers, has raised $7 million in second-round funding. Mobius Venture Capital led the deal, and was joined by Sutter Hill Ventures and return backers Portage Venture Partners and Draper Fisher Jurvetson. www.feedburner.com
Marc Friend has left the general partnership of Summit Partners, where he worked on the Summit Accelerator venture capital fund, PE Week has learned. In other Summit Accelerator news, the group will make two promotions, effective July 1: Tom Jennings will be promoted from vice president to principal, while Greg Goldfarb will be promoted from senior associate to vice ! president. www.summitpartners.com
Integrian Inc., a Durham, N.C.-based provider of mobile digital video technology for the public safety, transportation and federal government markets, has raised $13 million in Series B funding. Polaris Venture Partners led the deal, and was joined by Dow Chemical and return backers Intersouth Partners, Motorola Ventures and Wakefield Group. www.integrian.com
Elixent Ltd., a UK-based reconfigurable semiconductor company, is looking to raise $15 million in third-round funding. So far, it has closed on an undisclosed amount from Panasonic Digital Concepts Center and Toshiba Corp., while return backers 3i Group, GIMV and NIF Ventures also participated. www.elixent.com
SkinMedica Inc., a Carlsbad, Calif.-based drug company focused on dermatological conditions, has raised $15 million in Series E funding. EuclidSR Partners led the deal, and was joined by return backers Apax Partners, Domain Associates, HealthCare Ventures, Montreux Equity Partners, Perseus-Soros BioPharmaceutical Fund and Split Rock Partners. The company has raised over $95 million in total VC funding since its 1999 inception, including a split-tranched $56 million Series D round in 2004. www.skinmedica.com
CorNova Inc., a Burlington, Mass.-based coronary stent maker, has raised $3 million in Series A funding from CardioTech International Inc. and Implant Sciences Corp. www.cornova.com
Protonex Technology Corp., a Southborough, Mass.-based maker of fuel cell power systems for portable and remote applications, has raised $9 million in second-round funding. Return backers Conduit Ventures, SAS Investors, Solstice Capital and Commons Capital were joined by new participants Parker Hannifin Corp., Contango Capital Management and the Massachusetts Green Energy Fund. www.protonex.com
CVC Capital Partners has completed its sale of Dutch specialty chemicals company Verdugt BV to Kemira Oyj for approximately 148 million euros. Company management also sold its ownership position. www.verdugt.nl
KKR and Providence Equity Partners may not be getting help from Cablevision Systems Corp. after all. Reports last week suggested that the two buyout firms had talked with Cablevision about joining their bid for Adelphia Communications Corp., which also is being sought after by frontrunners Time Warner and Comcast. Today, however, new reports suggest that those talks broke down, and that Cablevision will go it alone with a $16.5 billion offer.
Apax Partners has dropped out of an inv*stment consortium trying to buy Enel SpA’s 62.5% stake in Italy-based telecom company Wind SpA. The move could provide a large boost for Blackstone Group, which is leading the competing consortium. Wind’s overall enterprise value is coming in at around 12 billion euros, including 12 billion in assumed debt.
Hispania Capital Partners has acquired a controlling interest in Eastern Research Services Inc., a Springfield, Penn.–based provider of independent market research and telephone data collection services. No financial terms were disclosed. www.easternresearch.com www.hispaniapartners.com
GAB Robbins, a portfolio company of Brera Capital Partners, has put its non-U.S. operations on the auction block. According to The Times of London, GAB will be looking for up to Gbp100 million.
CryoCor Inc., a San Diego-based maker of a catheter system for cardiac arrhythmias, has filed to raise $46 million via an IPO of common stock, which would trade on the Nasdaq under proposed ticker symbol CRYO. The offering will be led by W.R. Hambrecht, which will use its Open IPO distribution method. The company has raised $46.5 million in total VC funding since being spun out of CryoGen in 2000, including a $27.5 million Series D round in 2003. Significant shareholders include MPM Capital, Healthcare Equity Partners, OrbiMed Advisors and William Blair Capital Partners. www.cryocor.com
EV3 Inc. of Plymouth, Minn. has filed to raise $230 million via an IPO of common stock, which would trade on the Nasdaq under proposed ticker symbol EVVV. The company was formed in 2000 as an endovascular device acquisition platform by industry veteran Dale Spencer, private equity firm Warburg Pincus and medical device-focused VC firm The Vertical Group. Warburg Pincus currently holds more than a 90% stake in the company. www.ev3.com
Freightcar America Inc., a Chicago-based maker of railroad freight cars, has priced 8.5 million common shares at $19 per share, for a total IPO take of approximately $161.5 million. It originally filed to price 16 million shares at between $16 and $18 per share. Freightcar America traces its roots back to 1901, and was owned by Bethlehem Steep Corp. from 1923 to 1991. It then was purchased by Johnstown America Industries (now known as TTII), and resold in June 1999 to an investor group that included company management, Trimaran Capital Partners and John Hancock Life Insurance