PE Week Wire — Friday, August 27

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Friday Feedback

The gap between high and low-income U.S. households continued to grow in 2003, MassPRIM fund performance data is now available at www.PrivateEquityWeek.com and I’ve got to go pack for a weekend on Cape Cod. In other words, it’s time for Friday Feedback. Today’s edition concerns the issue of federal funding for embryonic stem cell research, which currently is restricted to ES cell lines created on, or before, August 9, 2001. Venture capitalists seem to have lined up in unanimous opposition to the present policy, which Senator Kerry has pledged to overturn, if elected. On Tuesday, I specifically asked for feedback from VCs who support President Bush on this matter, but no such letters were forthcoming. Most of the email writers were in favor of expanded federal funding flexibility for ES cell research, while the handful of naysayers engage in daily activities other than venture capital.

Jeff, an independent private equity sponsor, was among the naysayers: “Of course VCs would like to see the government subsidize stem cell research. Taxpayers foot the bill and VCs reap the financial benefit. It is human nature to support policies from which you benefit so directly.” James, business consultant, writes that funding for ES cell research should be paid for by universities and big pharma, not by the federal government: “The universities, med schools and biotech research PhD programs have the money, the staying power and the know-how. Let’s shame them into investing some of their massive endowments into this research rather than into new football stadiums. Small pharma doesn’t have the scale to do this and expect to earn a positive risk-adjusted return. Neither do the VCs, because the time horizons are too long. The Feds should not subsidize it for the simple reason that close to half of the electorate feels deeply that it is sinful, and the Feds are supposed to represent ALL the people.”

Those in support of expanded funding discusses the supposed separation between Church and Investment (as regular respondent Nari put it), the fact that most of the “approved” ES cell lines are either unavailable to purchase or already have collapsed and that VCs will be happy to invest once there is a bit more regulatory certainty. The most compelling email, however, came from venture capitalist Geoff. It’s kind of long and Geoff lives in Australia, but it does a good job summing up the emotional angle of this debate:

“There’s a small boy I know, not yet three years old. Outwardly, he is a happy bright little boy with a zest for life – ‘stuffed full of chuckles’ people say. But there’s a dark side. Lift up his shirt, and you can see large purple bruises. Every day, his parents re-apply the bruises. ‘No Daddy’ he says, his little limbs futilely pushing his father away “Don’t hurt me. It hurts. Stop”. But his Daddy doesn’t stop, and hurts him just the same. I am that Daddy.

My son has Type 1 (or Juvenile) Diabetes, like many tens of thousands of other children and adults around the world. We have to finger prick him and inject him about six times a day. In time, he will learn to hurt himself – self-injecting insulin to keep himself alive. Diabetes also affects later life. In Australia (and I presume also America) it is the number one cause of blindness and limb amputation. Not the sort of future we plan for our children.

While technology will improve the delivery of insulin and the measurement of blood sugar levels, the most likely way a cure will be developed is through stem cell research. Even with substantial research, it is expected that this will take decades. Heavy restrictions on the use of stem cells in research will, of necessity, delay the time that a cure will be developed – possibly beyond my son’s lifetime. While of course, there needs to be strong ethical supervision, it needs to be weighed against the benefits to existing human beings that curing Diabetes and other more serious illnesses can bring.

I don’t believe that we should expect VC firms to fund all this research. Much of this work is ‘public good’ research – providing the base that other researchers can build on, and ultimately saving the taxpayers, health insurance funds and individuals substantial costs in on-going treatment costs and hospitalization. Given that the benefits are only realized over a very long time frame, and are not able to be captured by the portfolio company doing the research, the costs should also be provided principally through public research funding.”

Email Daniel.Primack@thomson.com

Nalco Holding Co., a Naperville, Ill.-based wastewater treatment and process-chemicals company, has filed to raise $800 million via an IPO of common stock on the NYSE under proposed ticker symbol NLC. The company was formed last year, after Suez SA sold the company – then known as Ondeo Nalco – in a $4.3 billion leveraged buyout to The Blackstone Group, Apollo Management and GS Capital Partners. www.ondeonalco.com

 

American Renal Associates Inc., a Dedham, Mass.-based developer and operator of outpatient kidney

dialysis facilities, has raised $20 million in private equity funding from Wachovia Capital Partners. The deal also includes the availability of up to $10 million in additional growth capital. www.americanrenal.com

 

Affiliated Computer Services Inc. (NYSE: ACS) has acquired BlueStar Solutions Inc., a Cupertino, Calif.-based provider of application management services for packaged ERP and messaging environments. The deal is valued at $73 million in cash. BlueStar previously had raised over $105 million in total VC funding, from investors like Trident Capital, Dell Ventures, General Motors Pension Fund, MVC Capital and Osprey Ventures. ACS also held a minority stake, thanks to its participation in a $13.5 million Series B infusion in 2000 at a post-money valuation of approximately $165 million. www.bluestarsolutions.com

 

OnWafer Technologies Inc., a Dublin, Calif.-based provider of measurement and control solutions to the semiconductor industry, has raised $7 million in Series C funding. Investors included Mohr, Davidow Ventures, ITU Vetures and Newbury Ventures. www.onwafer.com

 

Additech Inc., a Houston, Texas-based developer of “at the pump” fuel additive technology, has raised $10 million in Series A recap funding. Adams Capital Management led the deal, with BEV Capital also participating. www.additech.com

 

MarketRange Inc., a Bothell, Wash.-based provider of online lifestyle and entertainment communities, has raised around $7 million in Series B funding. Ignition Partners led the deal, and was joined by return backer Mellon Ventures. www.marketrange.com

 

SkyCross Inc., a Melbourne, Fla.-based developer of wireless antenna solutions, has raised $2 million in new VC funding from Gabriel Venture Partners. www.skycross.com

 

Questra Corp., a Redwood City, Calif.-based provider of device management software, has raised $1 million in new Series C funding from return backers Menlo Ventures and Trident Capital. This brings the round total up to $9 million. www.questra.com

Update: Speakeasy Inc., a Seattle-based broadband services provider, raised around $3 million in strategic funding from Intel Capital. The deal was announced yesterday without a dollar amount. www.speakeasy.net

Boston Ventures has agreed to invest $23 million to sponsor a recapitalization of Smith Television Group, which owns six television network affiliates. After the deal closes later this year, the company will be reconstituted as Smith Media LLC.

 

Great Hill Partners is accepting bids for portfolio company Medical World Communications Inc., according to The Deal. Possible buyers are reported to include Nautic Partners, The Wicks Group and Veronis Suhler Stevenson. www.mwc.com

 

IBM (NYSE: IBM) has agreed to acquire Venetica Corp., a Charlotte, N.C.-based provider of enterprise content integration software. Financial terms were not disclosed for the deal, which is expected to close sometime next quarter. Venetica has raised venture capital funding from Charles River Ventures and General Catalyst Partners. www.venetica.com

 

NUVO Network Management Inc. (TSX Venture: NNM) has agreed to acquire Network Performance Services Inc., a Plymouth Meeting, Pa.-based managed services provider. The deal is valued at $5.9 million, including $1.3 million in cash, $2.5 million in NUVO common shares and $2.1 million in subordinated debt. It is expected to close by the end of August. Network Performance Services raised $1.5 million in Series A funding from Lycos Ventures in 2001. www.npservices.com

 

Empi Inc., a St. Paul, Minn.-based maker of orthopedic devices and sports medicine equipment, has withdrawn registration papers for its proposed $150 million IPO. The company announced earlier this month that it has agreed to be acquired by Encore Medical Corp. (Nasdaq: ENMC) for $360 million. Empi had been acquired in 1999 by The Carlyle Group, which will retain a 12% ownership position following the Encore acquisition. Galen Partners will retain its entire 19% ownership stake. www.empi.com

 

David Hart has joined European I-bank Altium as managing director of corporate finance. He previously served as a director of corporate finance with Credit Lyonnais. In other Altium news, the firm also added

Marc Milmo as an assistant director of corporate finance. He previously served in a similar role with Credit Lyonnais.

 

   Thursday, August 26

 

Voluntary Disclosure

In 1999, the Houston Chronicle reported that the University of Texas Investment Management Co. (UTMCO) had invested around $457 million with supporters of then-governor and presidential candidate George W. Bush. This included associates of then-UTIMCO chairman Tom Hicks, and major GOP donors like hedge fund managers Sam and Charles Wyly. The immediate result was that UTIMCO pledged to release information about the private fund managers with whom it had invested, including internal rates of return (IRRs) for said funds. After the hubbub had cooled, however, UTIMCO quietly reversed its position, and Texas Attorney General John Cornyn began blocking FOIA requests for the data.

Fast forward to 2002, when the Houston Chronicle again began agitating for numbers. UTIMCO had some new regents in favor of disclosure (even if the UTIMCO investment staff wasn’t too thrilled about it). Cornyn had the right to insist on continued concealment of UTIMCO investment info, but he now was running for U.S. Senate. Political expediency trumped principle, and Cornyn happily remained on the sidelines (i.e. gave tacit approval) as UTIMCO began the process of sending IRRs and other data tidbits to reporters like yours truly. This action prompted a cavalcade of copycat actions, in states like California, Colorado and Michigan (since rescinded).

The latest player in the disclosure battle is Massachusetts, which sent over information earlier this week from its retirement system (MassPRIM) investment portfolio. Just fund names and IRRs for funds invested in between 1986 and 1998, without any vintage year of cash-in/cash-out qualifiers. What is most interesting about this move isn’t the numbers themselves, but the fact that the information was released in the absence of legal necessity.

The Texas situation was largely created by Cornyn’s change of heart, while California had its hand forced by the local court system. Colorado legislators passed a bill that specifically permitted certain types of information to be released, while the University of Michigan originally followed legal counsel advice to disclose until the local legislature came to its rescue. In Massachusetts, however, there actually is specific legislation against releasing any performance information on VC or private equity fund investment made by MassPRIM. It was passed earlier this year and vetoed by Gov. Romney, after which Romney’s veto was overridden. Local AG Tom Reilly has been demanding the numbers for years (pr! ior to the new law), but no one ever seemed to pay him much mind.

So why are the numbers being released? Deputy Treasurer Doug Rubin says that it simply is a case of his office (or, more specifically, his boss Tim Cahill’s office) trying to do the right thing. “We are trying to find the fine line between fiduciary responsibility and our additional responsibility as a public pension fund,” he explained. I am cynical by nature, but couldn’t really find another rationale. Cahill isn’t up for reelection this year, and neither The Boston Globe nor the Boston Herald has made much of a fuss about being denied access to the data (unlike, say, the Houston Chronicle or San Jose Mercury News). Rubin also says that this entire experience has been an ongoing “learning process,” and that future disclosures could include other information like cash-in/cash-out figures. I’ll post the actual numbers online tomorrow at www.PrivateEquityWeek.com

Email Daniel.Primack@thomson.com

First Reserve Corp. has agreed to acquire Dresser-Rand Co. from Ingersoll-Rand Company Ltd. (NYSE: IR) for approximately $1.2 billion. No financial terms were disclosed. Dresser-Rand Co. is an Olean, N.Y.-based provider of energy conversion technology. www.firstreserve.com

 

Gores Investment Corp., a business development company (BDC) formed Los Angeles-based private equity firm Gores Technology Group, has withdrawn its proposed $250 million IPO offering, citing “market conditions.” It is the third BDC to formally withdraw its IPO registration papers this summer, following similar moves by Blackridge Investment Corp. (Blackstone Group) and Evercore Investment Corp. (Evercore Partners). Kohlberg Kravis Roberts & Co. also plans to withdraw its KKR BDC offering, having instead decided to raise a real estate investment trust. www.gores.com

 

Derek Lemke-von Ammon has joined FTVentures as a partner, effective September 1. He most recently oversaw the private equity efforts of Thomas Weisel Partners, a firm which he co-founded in 1998. Previously, Lemke-von Ammon had served as a senior managing director and director of private equity with Montgomery Securities. www.ftventures.com

 

Ambit Biosciences Corp., a San Diego-based drug company, has held a $21 million first close on its Series C funding round. The deal was led by Basel, Switzerland-based Roche Ltd., which also signed a multi-year collaboration agreement with Ambit Biosciences. No additional information was disclosed. Ambit has raised over $40 million in total VC funding since its 2000 inception as Adventa Biosciences Corp., including an $18.8 million Series B round in 2001 at a post-money valuation of approximately $28 million. www.ambitbio.com

 

Speakeasy Inc., a Seattle-based broadband services provider, has received a an undisclosed amount of strategic funding from Intel Capital. The new money will be used to help Speakeasy expand its WiMax efforts. Speakeasy earlier this year raised $24 million in a Series D round led by 3i Group and BV Capital. www.speakeasy.net

 

Savi Technology Inc., a Sunnyvale, Calif.-based provider of RFID supply chain management systems, has received a $10 million investment from Mitsui & Co. Savi has raised over $106 million in total VC funding since its 1989 inception. www.savi.com

 

Infabloc Pharmaceuticals Inc., a Salt Lake City-based drug company formerly known as Pharmadigm, has raised $3 million in Series B funding. Friedli Corporate Finance and vSpring Capital co-led the deal. The company now has raised over $50 million in total VC funding since its 1991 inception, including its original Series B funding in 1996. that deal raised $6.5 million at a post-money valuation of approximately $22 million. www.pharmadigm.com

 

Alta Communications has sponsored a leveraged recapitalization of Inner City Broadcast Holdings Inc., a New York-based radio broadcasting company. Alta contributed $41.2 million in preferred equity, while GE Commercial Finance co-arranged $197 million in senior secured financing (of which GE underwrote $118.2 million).

 

Key Principal Partners and Lynwood Capital Partners have teamed up to acquire Alpha Sintered Metals Inc., a Ridway, Pa.-based designer and manufacturer of powdered metal components. No financial terms were disclosed on the deal, which closed on July 23. www.alphasintered.com

 

Warren Resources Inc., a New York-based oil and natural gas exploration company, has filed to raise $70 million via an IPO of common stock on the Nasdaq under proposed ticker symbol WRES. It has raised $20 million in private equity funding from a group of institutional investors managed by Wellington Management Co.

 

Syniverse Technologies Inc. has agreed to acquire EDS Interoperator Services North America from Electronic Data Systems Corp. (NYSE: EDS) for approximately $57 million in cash. Syniverse (f.k.a. TSI Telecommunication Services Inc.) is a Tampa, Fla.-based communications technology company that was bought out from Verizon in February 2002 by GTCR Golder Rauner and CEO Ed Evans. EDS Interoperator is a Maynard, Mass.-based third party clearinghouse service provider for wireless carriers. www.syniverse.com

 

NuBridges LLC, an Atlanta-based provider of e-business community management solutions, has acquired TrailBlazer Systems Inc., an Atlanta-based provider of e-business connectivity software aimed at Internet-based information exchanges. No financial terms were disclosed. NuBridge has received approximately $16.5 million in VC funding from firms like C&B Capital, MCI Management, Noro-Mosley Partners and UPS Strategic Enterprise Fund.

 

Suzanne Bryan has joined Oak Hill Capital Management as vice president of investor relations. She previously worked in the private client services division of Wells Fargo & Co. In other Oak Hill news, the firm also has added Patricia Selcke as an associate in its investor relations group. Selcke previously served as a client portfolio manager in alternative investments at J.P. Morgan Chase‘s private bank, and also has worked at JPMorgan Partners. www.oakhillcapital.com

 

Hank Holzapfel has been named an operating partner with Meriturn Partners, a San Francisco-based advisor and investor for middle-market restructurings and turnarounds. He will continue to serve as a principal with management consulting firm Pragmatic Business Solutions. www.meriturn.com

 

Morten Jorgensen has joined Brown Gibbons Lang & Co. as a vice president in the firm’s Chicago office. The M&A specialist previously served as a vice president on the global industrial and services investment banking group at Credit Suisse First Boston. www.bglco.com

 

Harris Williams & Co., a Richmond, Va.-based M&A advisory firm, has added the following professionals: Peter Freer, former managing director of Keybank Capital Markets, as a vice president in San Francisco; Eric Canton, former M&A analyst with Raymond James & Associates, as an associate in Richmond; Luke Düste, recent MBA recipient from the Wharton School at UPenn, as an associate in Richmond; Jeff Herr, former vice president with Royal Bank of Canada Financial Group’s RBC Centura I-banking group, as an associate in Richmond; Geoff Smith, recent MBA recipient from the Sloan School of Management at MIT, as an associate in Richmond; Jay Hernandez, recent MBA recipient from the Robert Emmet McDonough School of Business at Georgetown University, as an associate in Boston; Marc Marlin, recent MBA recipient from the Robert Emmet McDonough School of Business at Georgetown University, as an associate in Bosto! n; and Kristina Wollan, recent recipient of an MBA from the Haas School of Business at UC Berkeley, as an associate in San Francisco.

 

Harris Williams also added: Brian Castleberry, Richard Grosshandler, Jeremy Kath, Duncan McIntyre, Patrick Nally, Brian Ruhmann and Jessica Schwartz a Richmond-based analysts; Shannon Cunningham and Jack Waterstreet have joined as Boston-based analysts; and Michael Anderson and Kimberly Roberts have joined as San Francisco-based analysts. www.harriswilliams.com

 

The Development Bank of Japan is considering major limited partner commitments to new funds from both Unison Capital Inc. and Mizuho Capital Partners Co., according to The Wall Street Journal.

 

   Wednesday, August 25

 

Running Late, Per Usual

People often ask how much time I spend working on this column. The answer is that it depends on how much news there is for me to compile, with more news usually meaning that I have fewer minutes to blog (although this really is not blogging in its purest sense). I’m beginning to learn, however, that a scarcity of news also can produce deadline troubles, as I spend extra time in the pursuit of copy. Journalism is, after all, the art of filling space. All of this is a long way of saying that there is little news this morning, and that we just have time for a few quick items:

(1) Massachusetts yesterday disclosed performance data for venture capital and private equity funds invested in by the state retirement system between 1986 and 1998. This seems to be the compromise plan mentioned a few months back by Deputy Treasurer Doug Rubin, whereby fund data would not be released within the first five years of a fund’s lifecycle. I was too immersed in stem cells yesterday to delve further into this, but I’m speaking to Rubin later today and will share any interesting tidbits and/or data points tomorrow.

(2) Broadband phone services provider Vonage today announced that it has raised $105 million in Series D funding. A company spokeswoman says that the entire deal was called down in one fell swoop, without some of the time or performance milestones that often come attached with $100 million-plus funding rounds. As such, this is the largest deal to date for a U.S.-based company in 2004, according to the data collection metrics of Thomson Venture Economics, PricewaterhouseCoopers and the National Venture Capital Association (which, combined, produce the MoneyTree Survey). MoneyTree only counts capital called down, as opposed to also including capital committed, but not yet called down. The reason for this policy is to protect disbursement veracity from situations where a company secures $200 million in commitments, but then goes bankrupt with just $50 million in the bank. Anyway, Vonage is your current MoneyTree leader.

(3) Lots of responses to yesterday’s embryonic stem cell discussion, although I’m still waiting for a life sciences VC to argue in favor of President Bush’s policy (other non-VC types did, however, make the case). I wrote yesterday that Bush initially put the number of “allowed” ES cell lines at 78, but that only 19 actually are available for licensed use. That came from the Bush-Cheney website, but the National Institute of Health informs me that 23 lines now are available for licensed use. It also is worth noting that the 78 figure also is no longer valid, as at least 16 of those lines have essentially collapsed. This includes nine lines from CyThera Inc., a VC-backed company in San Diego that focuses on pancreatic islet transplantation for the treatment of diabetes. We’ll get to a bunch of your emails on Friday.

(4) The trusty Pontiac has lost its air conditioning capabilities. At least the CD player still works (I handled the heat yesterday by replaying “Thunder Road” over and over and over again).

Email Daniel.Primack@thomson.com

Vonage Holdings Corp., an Edison, N.J.-based provider of broadband phone services, has raised $105 million in Series D funding. New Enterprise Associates led the deal with a $40 million commitment, and was joined by fellow return backers like 3i Group and Meritech Capital Partners. The company has raised around $200 million in total VC funding since its 2001 inception, including a $40 million Series C infusion earlier this year. www.vonage.com

 

Massachusetts yesterday released select venture capital and private equity fund performance information from within its state retirement system (MassPRIM) investment portfolio. The disclosure only includes funds with vintage years of 1986-1998, based on a state Treasury policy that would exclude the release of performance data for funds five years old or younger.

 

Stage Three Music Ltd., a London, UK-based music publishing company, has received private equity funding from Apax Partners and Ingenious Ventures. The agreement provides Stage Three with up to £40 million (approx. $72 million) for future music catalog acquisitions.

StrikeIron Inc., a Research Triangle Park-based provider of online software designed to simplify working with Web services, has raised $2.6 million in Series A funding from The Aurora Funds.

 

Molecular Imprints Inc., an Austin, Texas-based manufacturer of step and flash imprint lithography, has raised additional Series B funding from Tokyo Electron Ltd. The company now has raised a total of $30.52 million in Series B funding, including past investments from Lux Capital, Harris & Harris Group, Alloy Ventures, Draper Fisher Jurvetson, Motorola and KLA-Tencor.

 

Citigroup is raising a $350 million mezzanine fund named Citigroup Mezzanine Partners I.

 

Advent International is raising its third fund focused on companies based in Central and Eastern Europe. The vehicle is being marketed with a target capitalization of $268 million, which is an increase over the $182 million Advent raised for its second such fund in 1998.

 

Ferd Private Equity of Norway has raised approximately $182 million for its latest investment fund, according to PrivateEquityCentral.net.

 

JAFCO Investment (Asia Pacific) Ltd. has raised $100 million for its second Asia Technology Fund, according to Reuters. The new vehicle already is reported to have funded five companies, and will invest in high-tech companies based in China, Taiwan, South Korea, Singapore, Australia and India.

 

EMIDA Technologies Inc., a Miami, Fla.-based provider of an electronic transactional network, has acquired the assets of Global Payment Services, a provider of electronics products to Mexico-based retailers. EMIDA has received venture capital funding from Global Retail Partners and Latin America Enterprise Capital Corp. www.emida.net

 

Mike Gorman has joined The Aurora Funds as its new chief financial officer. He previously served in financial executive roles with such companies as Global Knowledge Network Inc., Accton Americas Management Group, SunTechnologies Group Inc. and Datalogic Optic Electronics Inc. Former Aurora Funds CFO Greg Bohlen will transition into a venture partner role. www.aurorafunds.com

 

 Tuesday 8/24

 

VC Support for Stem Cell Research

The October edition of Venture Capital Journal will be an Election Special, in which we will delve into a variety of VC-relevant aspects of Kerry v. Bush. There certainly will be some horse race talk (particularly in regards to campaign contributions from individual VCs and VenturePAC), but the issue will focus more on something largely ignored in popular campaign coverage to date: public policy. Among the included topics is federal funding for embryonic stem cell research, which was a political hot potato just before 9/11, and regained a small bit of steam following the death of former President Reagan.

The basic background is that President Bush in August 2001 permitted federal funding for research on a limited number of existing embryonic stem cell lines (which are distinct from adult stem cell lines or umbilical stem cell lines). He put the number at 78, although only about 19 actually are available for licensed use. This was the first time that federal funds had been approved for any embryonic stem cell research, but some critics complained about the numeric limits. Bush countered by saying that he was “committed to fully exploring the promise and potential of stem cell research without violating ethical principles and while maintaining respect for human life.” This does not mean that researchers are legally prevented from working on “non-approved” embryonic stem cell lines, but just that they can’t get federal funding for it.

John Kerry opposes the funding restriction, and instead would “overturn the ban on federal funding of research on new stem cell lines, and… will allow doctors and scientists to explore their full potential with the appropriate ethical oversight.”

Most life sciences-focused VCs support Kerry’s position on this matter, according to the National Venture Capital Association. I spoke to a handful of such VCs yesterday, who believe that the federal government should cntinue its practice of funding basic R&D. When asked if VCs should, instead, foot the bill (since private and/or state capital can fund new embryonic stem cell line research), they say that it would upset the economic applecart, and that the ROI potential is simply not strong enough to justify such investment. VCs, they say, fund applied R&D that is born of basic R&D.

This seems to be a VC consensus – even among Bush supporters. Part of my impetus for discussing the issue today, however, is to solicit opposing viewpoints from life sciences-focused VCs. Is your objection based on the science? On the morality? On the ROI? Enquiring minds want to know…

Email Daniel.Primack@thomson.com

 

Metaphore Pharmaceuticals Inc., a Fort Lee, N.J.-based drug company focused on pain, autoimmune disorders and inflammation, has raised $40.2 million in Series D funding. Investors included HealthCare Ventures, Advent Venture Partners, Merrill Lynch Ventures, MDS Capital and Prolog Ventures. The company has raised over $90 million in total funding, including a $30 million Series C deal at a post-money valuation of between $54 million and $59 million. www.metaphore.com

 

Evercore Investment Corp. has withdrawn its proposed $460 million IPO, due to “market conditions.” Evercore Investment was a business development company (BDC) formed by private equity firm Evercore Partners. It is the second “next-generation” BDC to fold before even pricing its IPO, following a similar decision by Blackstone Group’s Blackridge Investment Corp. last month. Kohlberg Kravis Roberts & Co. (KKR) also plans to withdraw its offering, having instead decided to raise a real estate investment trust. www.evercore.com

 

Cisco Systems Inc. (Nasdaq: CSCO) has agreed to acquire P-Cube Inc., a Sunnyvale, Calif.-based developer of IP service control platforms. The deal is valued at approximately $200 million in cash and options, and is expected to close in Cisco’s first fiscal quarter of 2005. P-Cube has raised around $72 million in total VC funding, including a $22 million Series B deal in 2000 at a post-money valuation of approximately $160 million, and a $40 million Series C deal in 2002 at a post-money valuation of approximately $86 million. P-Cube investors include Accel Partners, ComVentures, Evergreen Canada Israel Investments, Intel Capital, SingTel Ventures, Microdent Ltd., Rotonde Investments Ltd. and Venrock Associates. www.p-cube.com

 

Forterra Systems Inc., a Menlo Park, Calif.-based provider of large-scale virtual world technology, has raised $14 million in Series 1 preferred stock funding. Jerusalem Venture Partners (JVP) led the deal, and was joined by return backers Sutter Hill Ventures and Chichen-Itza Ventures. The company has raised over $50 million in total VC funding since its 1998 inception as There Inc. (a.k.a. There.com). www.forterrainc.com

 

Fabric7 Systems Inc., a Mountain View, Calif.-based provider of, has raised $17.5 million in Series B funding. Selby Venture Partners led the deal, and was joined by fellow new investors Foundation Capital, Vanguard Ventures and Yasuda Ventures. Return backers include New Enterprise Associates, Goldman Sachs and Sanmina-SCI. www.fabric7.com

 

DFA Capital Management Inc., a Purchase, N.Y.-based provider of integrated enterprise risk management solutions for the insurance industry, has raised $7.1 million in new VC funding led by Longworth Venture Partners. www.dfa.com

 

Imalux Corp., a Cleveland-based medical device company focused on the surgical removal of diseased tissue, has held a first close on its Series B funding round. The company raised around $3.72 million to date, and hopes to hold a $5 million final close (inclusive) by the end of September. BIOMEC led the first close, and was joined by Early-Stage Partners, RMS Investment Corp., Symark LLC, BioInfo Accelerator and Reservoir Venture Partners. www.imalux.com

 

Agile Therapeutics Inc., a West Conshohocken, Pa.-based developer of transdermal drug delivery devices, has raised $4.5 million in Series D funding. Investors included The Hillman Co., TL Ventures and PA Early Stage Partners. www.agiletherapeutics.com

 

Paulsson Geophysical Services Inc., a Brea, Calif.-based provider of seismic services to the oil industry, has received an undisclosed amount of private funding from Shell Technology Ventures. www.paulsson.com

 

Attachment Technologies Inc., an acquisition platform sponsored by Norwest Equity Partners, has acquired JRB Company Inc., an Akron, Ohio-based designer, manufacturer and distributor of quick couplers and attachments for the heavy construction equipment industry. No financial terms were disclosed. www.jrbco.com

 

CPFL Energy Inc., a Brazil-based electric utility company, has filed to raise $250 million via an IPO of American Depository Shares (ADS) on the NYSE under proposed ticker symbol CPL. Significant shareholders include PREVI, Banco Nacional de Desenvolvimento Economico e Social (BNDES), Votorantim Group, Bradesplan Participações SA and Camargo Corrêa Energia SA. www.cpfl.com.br

 

Bradken Ltd., an Australia-based manufacturer of mining and rail products, has begun trading on the Australian Stock Exchange under ticker symbol BKN. The company priced 102.08 million shares at Au$2.40 per share, for a total IPO take of approximately Au$245 million.(approx. US$173 million). CHAMP, an Australian affiliate of buyout firm Castle Harlan, acquired Bradken in March 2001 for Au$185.5 million. CHAMP recovered most of its investment prior to the IPO, as part of Bradken’s debt recapitalization. www.bradken.com.au

 

Mint AB, a Stockholm, Sweden-based provider of mobile parking payment solutions, has acquired Finland-based Payway Oy from telecom company TeliaSonera Finland. Mint AB has received VC funding from Ledstiernan AB and Priveq Partners. www.mint.nu

 

Joseph Lawler has been named president and CEO of CMGI Inc. (Nasdaq: CMGI), where he will replace George McMillan. Lawler previously served as executive vice president of R.R. Donnelley & Sons Co. (NYSE: RRD). www.cmgi.com

 

Manhattan Pharmaceuticals Inc. (OTC BB: MHTT) has added the following board members: Neil Herskowitz, managing member of ReGen Partners; Timothy McInerney, managing director of Paramount BioCapital Inc.; and Richard Steinhart, a principal with Forest Street Capital. www.manhattanpharma.com

 

 Monday, August 23

Monday Mouth-Off

The home office is buzzing with the sounds of suburban bliss (lawnmowers and teenager), the major media has decided that Vietnam is more relevant to the upcoming presidential election than is Iraq, healthcare, economy, etc. (I don’t care who started it — since when is journalism subject to playground rules?) and the beloved Red Sox are catching up to the hated Yankees. In other words, it’s time for some Monday Mouth-Off. Today’s lot is related to Friday’s discussion of seed-stage and early-stage VC investment trends.

Ben asks