PE Week Wire — Friday, August 20

Random Ramblings

Some scattered notes, links and marketing as the summer doldrums head into their second-to-last weekend: (1) A steady refrain from entrepreneurs over the past six months has been that seed-stage and Series A funding rounds have become increasingly difficult to come by. They blame risk-averse VCs who are willing to exchange price (better at Series A than at Series B) for product (better at Series B than at Series A). For the most part, I’ve gone along with the argument, due mostly to anecdotal evidence. This includes research for the news blurbs below, and also the fact than so many “early-stage” VC firms have been moving later and later down the company lifecycle (Battery Ventures and Austin Ventures have even begun doing some buyouts).

It is worth noting, however, that the statistical evidence does not necessarily back up such assertions. According to Thomson Venture Economics (publisher of your dear Wire), seed-stage/startup funding for U.S.-based companies has stayed relatively constant since the first quarter of 2002, although it did experience a strong – albeit isolated – bump in Q3 2003. If you add “early-stage” funding into the mix, Q2 2004 actually was the busiest quarter in two years. Some of you have mentioned to me that seed-stage and early-stage statistics are a bit suspect due to the massive number of undisclosed deals, but the trend-lines should be fairly legitimate. It also is possible that the numbers are simply lagging reality, which basically is another way of saying that my opinion on this matter has become unformed.

(2) It seems that Google boosted its first-day IPO performance by not allocating the number of shares requested by winning bidders. See George Mannes of here, or Steve Syre of The Boston Globe here.

(3) The latest issue of Venture Capital Journal is online at Check out my cover story on LP Overhang, plus Lawrence Aragon’s Q&A with optimistic entrepreneur Taylor Scanlon. Plus all the other good stuff you’ve come to expect from VCJ.

PolyServe Inc., a Beaverton, Ore.-based supplier of server and storage clustering software for enterprise data centers, has raised $20 million in Series D funding. Fidelity Ventures led the deal, and was joined by return backers Greylock, New Enterprise Associates and the RODA Group. The company has raised $63.5 million in total VC funding since its 1999 inception.


Google Inc., a Mountain View, Calif.-based online search company, closed its first day of public market trading up at $100.34 per common share. The company priced its IPO at $85 per share, but opened trading at $100.01 per share. Google previously had raised approximately $40 million in VC funding from Sequoia Capital, Angel Investors LP and Kleiner Perkins Caufield & Byers. This includes a $25 million deal in 1999 at a post-money valuation of approximately $62.5 million, and a $15.18 million deal in 2000 at a post-money valuation of approximately $445 million. Neither Sequoia nor Kleiner Perkins sold shares as part of the IPO.


William Cohen, former U.S. Secretary of Defense, is launching a merchant banking group, according to Newsday. The firm – named TCG Financial Partners – plans to raise $300 million to invest in defense companies. Joining Cohen will be Edward Carter, former head of U.S. investment banking with Bank of America Corp. Also participating will be retired General Joseph Ralston, former Supreme Allied Commander in Europe, and George Robertson, former NATO secretary-general.


Othera Pharmaceuticals Inc., a Kennett Square, Pa.-based drug company focused on ophthalmic indications, has held a $13 million first close on its Series B funding round. The company hopes to raise an additional $2 million over the next few weeks. NewSpring Ventures led the round, and was joined by fellow new investors Commerce Health Ventures (a New Spring affiliate fund) and Johnson & Johnson Development Corp. Return backer Liberty Venture Partners also participated. The company previously raised $1.4 million via a Series A funding round in late 2002, and subsequently raised $100,000 and $500,000 rounds from Ben Franklin Technology Partners.


Valera Pharmaceuticals Inc. (f.k.a. Hydra Med Sciences), a Cranbury, N.J.-based drug company focused on urologic and endocrine conditions, has raised $11.5 million in Series C funding. New investor Psilos Group Managers LLC and existing investor Sanders Morris Harris co-led the deal. Other return backers included Wheatley Partners and the NJTC Venture Fund.


iMove Inc., a Portland, Ore.-based provider of immersive visual solutions for security and surveillance applications, has raised an undisclosed amount of new VC funding from return backers SmartForest Ventures and The Grosvenor Funds. The company also named John Herring its new president and CEO. Herring most recently ran Norcom Networks Corp., and also has served in senior management positions with Kodak, LaserAccess Corp. and CBA Systems.


ThinkOrSwim Group Inc., a Chicago-based option brokerage, has received a $22.5 million minority investment from Technology Crossover Ventures. Henry Feinberg, a general partner with TCV, will join the ThinkOrSwim board of directors.


Intense Photonics Ltd., a Glascow, UK-based provider of optical components and modules, has raised £5 million in new venture capital funding. Return backers included 31 Group, ACT Venture Capital, Alice Ventures, Cazenove Private Equity, FNI Venture Capital and TTP Ventures.

Neah Power Systems Inc., a Bothell, Wash.-based developer of micro fuel cell technology, has raised $12 million in Series B funding. New investors Castile Ventures and WestAM joined return backers Frazier Technology Ventures, Alta Partners and Intel Capital.


Wellspring International Inc., a Bristol, Pa.-based provider of wireless, point-to-point utility sub-meters, has held a $3.3 million first close on its Series E funding round. Return backers include Nth Power, Expansion Capital, Early Stage Ventures and North Atlantic Capital. The company hopes to close the entire round out at $10 million.


Galey & Lord, an Atlanta-based supplier of denim, khaki and corduroy fabrics to the fashion apparel and uniform markets, has filed for Chapter 11 bankruptcy protection in anticipation of its $188 million acquisition by Patriarch Partners (as announced in July). As part of the refinancing, Galey & Lord also will receive $80 million in post-petition financing from GE Capital. The company became privately held after emerging from a separate bankruptcy action in March 2004. Inc. (Nasdaq: AMZN) has agreed to acquire Ltd., an operator of online retail sites targeting China. The deal is valued at approximately $75 million, including around $72 million in cash and the assumption of employee stock options. It is expected to close later this was founded in 2000, and has raised venture capital from firms like Legend Capital and Softchina Venture Capital Corp.

NewMarket Technology Inc. (OTC BB: NMKT) has formed a strategic partnership with Sensitron Inc., a San Mateo, Calif.-based provider of wireless solutions to the healthcare market. As part of the agreement, NewMarket will acquire a 20% equity stake in Sensitron.


Walter Industries Inc. (NYSE: WLT) said that Scott Nuttall, a principal with Kohlberg Kravis Roberts & Co., has resigned from the company’s board of directors. He will be replaced by Simon Brown, also a principal with KKR.

Diane Swonk is leaving her chief economist position with Bank One.


UBS has launched a secondary market advisory practice within its private equity funds group. The Stamford, Conn.-based team will be led by Nigel Dawn, a managing director of private equity for UBS.


  Thursday, August 19


Google Prices, VCs Wait

Searching for a column topic… U.S. women break a swimming relay record in front of a half-full stadium? No, too sports-oriented. The electoral college should be scrapped so that Bush vs. Kerry isn’t decided by just a handful of people in an even smaller handful of states? No, too political. Maybe Google?

OK. As you’ve undoubtedly heard/read/seen by now, Google Inc. is expected to begin trading on the Nasdaq today, after pricing over 19.6 million common shares at $85 per share. That represents a total IPO take of approximately $1.67 billion. This space has been saying for weeks (or has it been months?) that Google execs were smoking a controlled substance if they really believed that retail buyers would bid $135 for a stock that would already have hit its short-term ceiling. But the real story here – for our purposes – is not that the stock priced lower than (Google) expected. Instead, it’s that the company’s primary VC backers have yet to receive any ROI.

As of late last week, it looked like both Sequoia Capital and Kleiner Perkins would sell a combined 4.5 million shares of Google stock via the IPO. Even at the reduced $85 per share price, this would have netted them around $382 million, compared to original investments of just about $35 million. Once Google reduced its total number of offered shares, however, both Sequoia and Kleiner were shut out, with their total number of offered shares totaling zero. Angel Investors LP, on the other hand, did participate in the IPO and already has made back more than its entire Google investment, with another $63.5 million in paper value on the books.

I’m not asking you to shed tears for Mike Moritz or John Doerr, but I am saying that they shouldn’t be handing out cigars just yet (maybe cigarillos). Google likely will still go down as one of the best early-stage investments made in 1999-2000, but the final verdict still isn’t in. We still have a little while to wait, and a questionable aftermarket to watch…

Unrelated: Tech problems, again, plagued the Top Secret button yesterday. In other words, I didn’t get any anonymous messages you may have sent. It is back up now, and can be accessed via the button ad, or by going to:

KKR Financial Corp., a new real estate investment trust launched by buyout firm Kohlberg Kravis Roberts & Co., has raised $780 million through a Rule 144A offering. The REIT sold 78 million common shares at $10 per share, according to an SEC filing from KKR Financial placement agent Friedman, Billings, Ramsey Group Inc. Initial reports had KKR only looking for $650 million, although it previously had filed to raise $750 million via a business development company (BDC) offering. The firm has yet to formally withdraw the BDC offering, but a source close to the situation confirms that the REIT was launched as a substitute for the BDC.


Google Inc., a Mountain View, Calif.-based online search company, is expected to begin trading on the Nasdaq today under ticker symbol GOOG. The company priced over 19.6 million common shares at $85 per share (below its original $108-$135 offering range), for a total IPO take of approximately $1.67 billion. Google has raised approximately $40 million in VC funding from Sequoia Capital, Angel Investors LP and Kleiner Perkins Caufield & Byers. This includes a $25 million deal in 1999 at a post-money valuation of approximately $62.5 million, and a $15.18 million deal in 2000 at a post-money valuation of approximately $445 million.


Point Biomedical Corp., a San Carlos, Calif.-based developer of technology platforms for medical imaging and drug delivery applications, has raised $27.12 million in Series F funding. Investors included Anvers LP, CHL Medical Partners, De Novo Ventures, Frazier Healthcare, Fininvest, Institutional Venture Partners, INVESCO Private Capital, Mosaix Ventures, Oakwood Medical Investors, Palo Alto Investors, S.R. One Ltd., Sprout Group and William Blair Capital Partners. The company has raised over $90 million in total VC funding since its 1996 inception, including a $28.3 million Series E infusion in 2002 at a post-money valuation of approximately $62 million.


Suros Surgical Systems Inc., an Indianapolis-based medical device company, has raised $12 million in new venture capital funding. New investors Morgan Stanley Capital Partners, Piper Jaffray Ventures and River Cities Capital Funds provided a combined $10 million, while the remainder came from existing investors Rose Hulman Ventures and Twilight Ventures.


Adaptix Inc., a Bothell, Wash.-based provider of wireless equipment to supplement, extend or replace wire-line infrastructure, has emerged from stealth mode with an undisclosed amount of venture capital funding from Baker Capital. The company features product development and manufacturing facilities in Shanghai, China.


Affinergy Inc., a Research Triangle Park-based developer of biomaterial coatings, has raised $2 million in Series A funding. Investors included MCNC, Trinity Healthcare, Charleston Angel Partners and the Wilmington Investor Network.


QuantomiX, a San Francisco-based, has raised $5 million in new Series B funding. The company held a $3.5 million first close on the deal late last year, bringing the round total up to $8.5 million. Evergreen Partners led the latest tranche with a $2 million investment, and was joined by return backers Pitango Venture Capital, Vitalife Life Sciences Venture Capital and Shrem Fudim Kelner Technologies.


Codexis Inc., a Redwood City, Calif.-based biotech subsidiary of Maxygen Inc. (Nasdaq: MAXYGEN), has raised $10 million in Series C funding.


Vernier Networks Inc., a Mountain View, Calif.-based, has raised $2 million in additional Series D funding. The company had announced a $10 million first close in July.


The Blackstone Group has agreed to acquire Prime Hospitality Corp. (NYSE: PDQ), a Fairfield, N.J.-based hotel operator. The total transaction is valued at $790 million (including debt), and includes a $12.25 per share buyout of existing Prime Hospitality shareholders (a 42% premium on yesterday’s closing stock price).


Yahoo Inc. (Nasdaq: YHOO) in July acquired FareChase Inc., a New York-based provider of online travel services. No financial terms were disclosed. The news first was reported by Searchblog. FareChase had raised around $9.5 million in total VC funding, with investors including Boston Capital Ventures and DB Capital Partners Australia.


Michael Feinglass and Jon Madorsky both have joined RCP Advisors LLC as principals. Feinglass recently received his MBA from Washington University, while Madorsky received his MBA from the University of Chicago Graduate School of Business.

Michael Rowny, chairman of Rowny Capital, has been named an independent director with CIENA Corp. (Nasdaq: CIEN).


Penny Pickett has been named president and a board member of the Washington DC Technology Council. She previously served as business director with the Telecommunications Development Fund.


Robert Evanson, a senior advisor to Apax Partners, has been elected to the board of Cadmus Communications Corp. (Nasdaq: CDMS), a Richmond, Va.-based provider of graphic communications services. 


  Wednesday, August 18


Starting Up In China

Slow day in terms of VC funding news, so I’ll share a trio of unannounced startup deals uncovered by my colleague Jerry Borrell. Each company is involved with semiconductors and plans to have a significant portion of its operations based in China. Oh, and Walden International invested in all three. First up is Celestial Semiconductor Inc., which secured $11 million in Series A funding from Walden International and ComVentures. The company is headquartered in San Jose, Calif., but is running R&D out of Beijing. Next is Telegent Systems Inc., a fables startup that raised $15 million in Series A funding from Walden International, New Enterprise Associates, H&Q Asia and U.S. Venture Partners. The company also is based in San Jose, but plans to open a satellite shop in either Shanghai or Beijing. Finally, Mohr, Davidow Ventures led a $23 million first-round deal for an IC design services company currently referred to as NoNameYet. Walden International and New Enterprise Associates also participated on the deal. No additional information is available, but NoNameYet will assuredly have a China component.

In completely unrelated news, we’ve finally gotten our “Top Secret” button to work, after several months of failure. It is the bottom button on the PE Week Wire’s right-hand navigation bar (under all the ads), and allows you to communicate anonymously with me. When it worked, readers used this button to drop dimes to me, whether it be an unreported/pending news story, or a decent piece of industry gossip. All submissions are welcome and, of course, anonymous.

Google Inc., a Mountain View, Calif.-based online search company, today reduced its IPO offering price range to $85-$95 per common share, from an original range of $108-$135. The company also reduced the number of shares to be sold by insiders, from 25.7 million down to 19.6 million. Google has raised approximately $40 million in VC funding from Sequoia Capital, Angel Investors LP and Kleiner Perkins Caufield & Byers. This includes a $25 million deal in 1999 at a post-money valuation of approximately $62.5 million, and a $15.18 million deal in 2000 at a post-money valuation of approximately $445 million.


Texas Pacific Group has teamed with former Goldman Sachs trader Dinakar Singh to form an in-house hedge fund, according to The Wall Street Journal. The new effort will be known as TPG-Axon Capital, and is designed to raise upwards of $3 billion.


Front Porch Digital Inc. (OTC BB: FPDI) has agreed to acquire ManagedStorage International Inc., a Broomfield, Colo.-based provider of outsourced services for data protection and resource management. The all-stock deal is valued at approximately $39 million, and is expected to close later this week. At that time, the combined company will change its name to Incentra Solutions Inc. ManagedStorage has raised over $85 million in total VC funding since its 2000 inception, from investors like Storage Technology Partners, JPMorgan Partners, Great Hill Equity Partners, EMC Corp., Wachovia Corp., Tudor Ventures and Providence Equity Partners.


CyDex Inc., a Lenexa, Kansas-based provider of pharmaceutical solubility solutions, has raised $17 million in Series B funding. Sanders Morris Harris led the deal, and was joined by fellow new investors SR One Ltd. and Eastman Ventures. Return backers included Techno Venture Management, Private Equity Direct Finance, Clariden Investment, individual investor Paul Leach and members of company management.


Monitor Clipper Partners has sponsored a recapitalization of Filogix Inc., a Toronto-based provider of mortgage and real estate solutions. The equity investment is valued at approximately US$50 million.


Montagu Private Equity has completed a £146 million management buyout of The Survitec Group, a division of Air-Sea Survival Equipment Ltd. (controlled by the Alchemy Investment Plan). Survitec is a Northern Ireland-based provider of survival technology for the marine, military, aerospace and homeland security markets.


TH Lee Putnam Ventures and Freeman Spogli & Co. have acquired a “significant equity interest” in N.E.W. Customer Services Companies Inc., a Sterling, Va.-based administrator of warranty and extended service contracts for retailers, utilities, manufacturers and financial services firms. The deal gives N.E.W. an enterprise value of approximately $370 million, and included debt financing from CIBC.


WG Energy Holdings Inc., a Midland, Texas-based portfolio company of SKM Growth Investors, has retained Energy Spectrum Advisors to solicit bids on the proposed sale of certain oil and gas properties in North Texas.


Bain Capital, Carlyle Group and Kohlberg Kravis Roberts & Co. are among the likely bidders for Spain-based travel reservations company Amadeus Global Travel Distribution SA, according to The Wall Street Journal.


WebSideStory Inc., a San Diego-based provider of Web analytics solutions, has reduced its IPO offering price range to $8-$9 per common share, from an original range of $10-$12 per share. The company still plans to offer five million shares. Both Summit Partners and TA Associates are listed as significant shareholders in WebSideStory.


Bitfone Corp., a Laguna Nigel, Calif.-based provider of over-the-air software updates for mobile phones, has acquired Mobile Diagnostix Inc., a Toronto-based software company focused on customer care automation solutions for mobile devices. No financial terms were disclosed. Bitfone has raised over $48 million in VC funding from investors like Nokia Venture Partners, 3i Group, Cypress Ventures, Nexit Ventures, KTB Ventures, Prism Venture Partners and St. Paul Venture Capital.


Ikano Communications Inc., a Salt Lake City-based provider of private-label Internet services, has acquired, a San Antonio-based provider of Internet access to customers in San Antonio, Houston and Austin, Texas. No financial terms were disclosed. Ikano has raised over $33 million in VC funding from investors like Insight Venture Partners and Chicago Venture Partners.


Julie Levenson has joined Houlihan Lokey Howard & Zukin as a managing director and head of the firm’s private equity and PIPE placement group. She most recently served as a senior managing director in the strategic finance group at Bear Stearns, and as head of Bear’s private placement group. Before that, Levenson was a managing director with Merrill Lynch‘s private equity group, heading up its West Coast operations.


David Baker has joined the Chicago office of Goldsmith Agio Helms as a managing director focused on the life sciences M&A market. He previously served as a vice president of General Electric Healthcare in Europe.


Jaime Dworkin has been named a managing director of GB Palladin Capital LLC (a division of Gordon Brothers Group), and will co-lead the group’s equity investment division. Between 1998 and 2002, Dworkin served as a partner with private equity firm Saunders Karp & Megrue.


Richard Benkendorf, co-founder and managing principal of Technology Impact Partners, has joined the board of directors at Advent Networks Inc., an Austin, Texas-based provider of cable broadband technology.


Cascadia Capital of Seattle has launched a financial sponsors group catering to U.S.-based private equity funds with a minimum size of $500 million. The group will be run by new managing director Christian Schiller, who previously served as a managing director of M&A for Cook Associates.


  Tuesday, August 17


Bailing on BDCs

Will Google actually price its IPO today, as expected? Will it hit its absurd $135 per share asking price? Will the SEC slap Google silly for its interview with a bunny-eared men’s magazine (the actual publication name would cause an email filter meltdown)? As we wait for answers to these vital questions, let’s take a quick look at a group of IPOs that are looking more and more like they’ll never get done: business development companies (BDCs) from large private equity firms.


The background on this – for the uninitiated – is that Apollo Management filed for, and priced, a BDC IPO earlier this year. In its wake, we saw a slew of offerings from venerable firms like Blackstone, KKR, Thomson H. Lee, Kelso & Co. and others. The idea was easy access to mezzanine capital, and management fees that would make a bookie blush. Banks initially fell over each other to underwrite the deals, as they too saw a few million quick bucks.


Now to the foreground. Apollo Investment Corp. (Nasdaq: AINV) priced at $15 per share, but never has gotten back over that hump. Such aftermarket under-performance is not surprising for a BDC, which is structured like a closed-end fund but really is a corporation will all of the traditional reporting requirements. Jon Maier, an analyst covering Apollo for UBS, says that Apollo could see a small stock price bump in September when it begins initial shareholder distributions, but probably can’t expect any real movement until at least Q2 2005.


The result of Apollo’s aftermarket lethargy has been the disintegration of institutional investor interest in other prospective BDCs. After all, why buy something today that almost assuredly will go down in value? Let’s call this the Google problem. Apollo did beat Wall Street earnings estimates by about three cents for its first operational quarter, but the surprise was based almost entirely on an accelerated investment pace, not the actual quality of said investments. It could take until the end of next year until the market gets a real sense of how high – or low – Apollo should trade. And the public markets have no current interest in acting proactively.


So firms like Blackstone and KKR have shifted their strategies. Blackstone withdrew its BDC offering, and seems poised to raise another traditional mezzanine fund (its current vehicle is approximately 75% invested). KKR has kept its BDC offering papers on file, but a source familiar with the situation confirms a Commercial Mortgage Alert report that the firm has abandoned its BDC in favor of an REIT (which is rumored to be worth $700 million). Prospect St. managed to price its IPO, but raised far less than anticipated. No word yet on Tom Lee, Kelso, etc., but the BDC outlook is weakening by the day. Expect to see more filings pulled in the upcoming weeks, with the next talk of a BDC rush (from traditional PE firms) coming after Apollo has begun to issue some meaningful distributions. —

Replidyne Inc., a Louisville, Colo.-based drug company focused on the discovery and development of anti-infective therapies, has raised $40 million in Series C funding. TPG Ventures led the deal, and was joined by fellow new investor Perseus-Soros Biopharmaceutical Fund. Return backers included HealthCare Ventures, Morgenthaler Ventures and Sequel Venture Partners. The company now has raised $53 million in total VC funding since its inception, including a $13 million in early 2002 at a post-money valuation of approximately $18.5 million.


Canada’s Venture Capital and Private Equity Association (CVCA) today released second-quarter VC disbursement data, in partnership with Macdonald & Associates. They report that Canadian VCs invested Cdn$375 million in Q2 2004, while Canadian VC firms raised Cdn$317 million in new fund capital.


MFORMA Group Inc., a Kirkland, Wash.-based provider of wireless entertainment media, has held a $19 million first close on its second round of external venture funding. The entire deal is expected to total $40 million, and comes on the heels of a $44 million round announced this past June. Draper Fisher Jurvetson led the latest transaction, and was joined by return backers General Catalyst Partners and Bessemer Venture Partners. John Fisher, a managing director with Draper Fisher Jurvetson, will joined the MFORMA board of directors.


Sentit0 Networks Inc., a Rockville, Md.-based provider of communications infrastructure, has raised $9.5 million in Series D funding led by Core Capital Partners. This follows a $19 million Series C round raised late last year at a post-money valuation of approximately $52.2 million. That earlier deal was led by Kodiak Venture Partners.


Echopass Corp., a San Francisco-based provider of on-demand contact center solutions, has raised $11 million in Series C funding. Advanced Equities Inc. led the deal, and was joined by return backers New Enterprise Associates, Canaan Partners, Outlook Ventures and Cardinal Venture Capital. The company has raised over $50 million in total VC funding since its 1998 inception.


Affinnova Inc., a Waltham, Mass.-based provider of product design, development and testing solutions, has raised $4.5 million in Series C funding. Sherbrooke Capital led the deal, with return backer Flagship Ventures also participating.


Dellago Technologies LLC, a Royal Oak, Mich.-based provider of business and technology strategies for manufacturers and distributors, has raised $1.5 million in VC funding from Cooke & Moses LLC. The company was founded in 2003 as QSSolutions Engineered Systems Group.


Control4 Corp., a Draper, Utah-based provider of home automation systems, has raised $15 million in Series B funding. Frazier Technology Ventures led the deal, and was joined by return backers Thomas Weisel Venture Partners and vSpring Capital. Len Jordan, a general partner with Frazier Technology, will joined the Control4 board of directors, in conjunction with the financing.


Evolva, a Switzerland-based drug discovery company, has raised 12 million in Series A funding, according to The Deal. Aravis General Partner led the deal, and was joined by Novartis Venture Fund, Yamanouchi Venture Capital and Dansk Innovationsinvestering PS. The company was founded Copenhagen three years ago, and received seed-stage funding from Symbion Capital and Vaekstfonden.


Cymbet Corp., an Elk River, Minn.-based manufacturer of thin-film solid-state batteries,, is in the midst of raising $15.5 million in second-round funding, according to the Israel Business Arena. The report says that Cymbet already has secured capital from Millennium Materials Technologies, which backed Cymbet’s Series A round alongside Helmet Capital.


Intelsat Ltd., a Bermuda-based satellite company, yesterday confirmed reports that it will be acquired for $5 billion by Apax Partners, Apollo Management, Madison Dearborn Partners and Permira. The deal includes $3 billion of equity (with each firm getting a 25% ownership stake), plus the refinancing of approximately $2 billion in Intelsat debt. The acquiring vehicle is named Zeus Holdings Ltd.


Charterhouse Group has completed its acquisition of Lason Inc. (OTC BB: LSSN) for approximately $30 million. Lason is a Troy, Mich.-based provider of business process outsourcing solutions.


Google Inc., a Mountain View, Calif.-based online search company, is expected to price its massive IPO later today. The company has raised approximately $40 million in VC funding from Sequoia Capital, Angel Investors LP and Kleiner Perkins Caufield & Byers. This includes a $25 million deal in 1999 at a post-money valuation of approximately $62.5 million, and a $15.18 million deal in 2000 at a post-money valuation of approximately $445 million.


McAfee Inc. (NYSE: MFE) has agreed to acquire Foundstone Inc., a Mission Viejo, Calif.-based provider of vulnerability management solutions. The deal is valued at $86 million in cash, and is expected to close in the next two months. Foundstone has raised over $17 million in VC funding since its 1999 inception, from investors like OVP Venture Partners, Motorola Ventures, Riordan, Lewis & Haden and Wilson, Sonsini, Goodrich & Rosati.


Multek Inc., a wholly-owned subsidiary of Flextronics International Ltd. (Nasdaq: FLEX) has agreed to acquire Sheldahl Inc. in an all-stock deal. Financial terms were not disclosed. Sheldahl is a Northfield, Minn.-based provider of printed circuits, which was bought out of bankruptcy for $20 million in 2002 by existing shareholders Ampersand Ventures, Molex Inc. and Morgenthaler Partners. Company Ltd.