PE Week Wire — Friday, December 12

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John Sidgmore has passed away at the age of 52. Sidgmore is best known as the Worldcom CEO who revealed the telecom giant’s accounting troubles in early 2002, just weeks after taking over the top post. He currently serves as a venture partner with New Enterprise Associates, and as chairman and CEO of eCommerce Industries Inc., a New Enterprise Associates portfolio company based in Vienna, Va. A family spokesman says that Sidgmore died in a Washington, D.C. hospital from complications associated with acute pancreatitis. He is survived by his wife Randi and his son Michael.

Bertelsmann AG yesterday was found guilty by a California jury of breach of contract against two former employees who claimed they were promised an equity stake in the company. The alleged promise was made by Thomas Middelhoff, a former Bertelsmann executive who was named CEO once the company was sold to AOL Time Warner in 2000. Middlehoff resigned from the post earlier this year and took a London-based managing director position with Investcorp, where he heads up European corporate investment activities. Bertelsmann says that it will appeal the verdict, which calls for the company to pay the former employees over €200 million.

Ingenium Pharmaceuticals AG, a Munich-based drug discovery company, has raised €13.8 million (approx. $16.86 million) in Series C funding. The deal was co-led by new investor HBM BioVentures and return backers TVM Techno Venture Management and Polaris Venture Partners. Also participating were return backers Ascenion GmbH, Index Ventures, IKB, Schroder Ventures Life Sciences and Sofinnova Partners. The company now has raised €74 million in venture funding since its 1999 inception.

International Steel Group Inc. is set to begin trading on the NYSE today under ticker symbol ISG. The company raised $462 million yesterday by pricing 16.5 million shares of common stock at $28 per share. This was a significant boost from the $22 to $24 per share range that ISG expected in a November filing with the SEC. The company was created as an acquisition platform by turnaround firm WL Ross & Co., and since has acquired the steel-making assets of LTV, Acme Steel Corp. and Bethlehem Steel Corp. According to the company, ISG is now the second-largest integrated steel producer in North America, based on steel-making capacity. Goldman, Sachs & Co. and UBS Securities LLC acted as joint lead managers of the ISG IPO.

NPTest Holding Corp. yesterday began trading on the Nasdaq under ticker symbol NPTT. The San Jose, Calif.-based maker of semiconductor test and diagnostic systems priced 14.6 million shares of its common stock at $12 per share, for a total IPO take of $175.2 million. It closed trading yesterday down at $11.49 per share. NPTest is a portfolio company of Francisco Partners and Shah Management, which acquired the company earlier this year for $220 million in cash from Schlumberger Ltd. (NYSE: SLB). The managing underwriters of the IPO were Citigroup Global Markets, Credit Suisse First Boston, Lehman Brothers and Banc of America Securities. Citigroup Global Markets acted as sole book-running manager.

David Tahmassebi has joined the Menlo Park, Calif. office of Bessemer Venture Partners as an entrepreneur-in-residence. He most recently served as co-founder and CEO of Bessemer portfolio company Resonext Communications Inc., which was acquired in December 2002 by RF Micro Devices Inc. for $133 million.

Compass Minerals International Inc., an Overland Park, Kansas-based producer of rock salt (a.k.a. highway deicing salt) will begin trading on the NYSE today under ticker symbol CMP. The company has priced 14.5 million shares of common stock at $13 per share, for a total IPO take of $188.5 million. This is slightly higher than the $172.5 million that Compass said it expected to raise when it filed its original registration papers with the SEC. The shares are being sold by selling stockholders of the company, which include majority shareholder Apollo Management Inc., IMC Global Inc. and employees of the company and its subsidiaries.

Westar Aerospace and Defense Group, a St. Louis-based provider of IT services to the defense industry, has raised $38 million in private equity and debt financing. Edgewater Funds led the deal, and was joined by Mesirow Financial. Westar used CIBC World Markets as its financial advisor for the investment.

Littlejohn & Co. will partner with the management of El Segundo, Calif.-based Wyle Laboratories Inc. to acquire available stock in the privately held Wyle. In addition to a control equity investment in Wyle, Littlejohn also will provide growth capital to support the company’s growth initiatives.The existing senior managers of Wyle will continue in their current positions and will maintain a significant stake in the company. No deal terms were disclosed.

Nycomed A/S, a Danish pharmaceutical company, will sell its non-pharmacy consumer health business to Norwegian private equity firm Ferd for an undisclosed amount. The deal includes the sale of Nycomed’s Norwegian consumer health business, Collett Pharma AS and the retail-chain sales in Denmark, Finland and Sweden. In Sweden however, the existing distribution agreements will remain unchanged.
NEWS FROM THURSDAY 12/11

Hamilton Lane Advisors Inc., a Bala Cynwyd, Pa.-based fund advisor and investment management firm, has announced significant changes in its ownership and management structures. The firm has sold a 40% ownership stake to an investment group led by Hartley Rogers, former co-head of CSFB Private Equity, and including Cascade Investments LLC, the investment arm of Microsoft’s Bill Gates. Leslie Brun will remain firm chairman and its largest individual shareholder, with Rogers joining as vice chairman. In addition, the firm’s board has added Martin Nelson from Cascade and O. Griffith Sexton, one of the investors and a former managing director with Morgan Stanley. Terms of the investment were not disclosed.

Motive Inc., an Austin, Texas-based provider of serviced management software, is taking another stab at the IPO market. The company – which formerly was known as Motive Communications Inc. – has filed to raise $70 million through an offering on the Nasdaq under proposed ticker symbol MOTV. The company previously filed for a $57.5 million IPO in June 2000, but later withdrew the request in March 2001. Motive has since acquired Austin-based Broadjump Inc., and the combined companies have raised over $95 million in venture capital funding from investors like Accel Partners and Austin Ventures.

Advanced Lighting Technologies Inc., a Solon, Ohio-based manufacturer of lighting products, has received a $30 million control investment from Saratoga Partners. In addition, ALT has received a $30 million senior secured credit facility from Wells Fargo Foothill. The deals are part of a reorganization plan for ALT that was approved by a U.S. Bankruptcy Court on Monday. Under the plan, ALT is no longer listed as a public company.

GlycoFi Inc., a Lebanon, N.H.-based biopharmaceutical company, has raised $10 million in Series C funding. Fletcher Spaght Ventures led the deal, and was joined by Borealis Ventures, Village Ventures and return backers Boston Millennia Partners, Polaris Ventures and Schroder Ventures Life Sciences. The company now has raised over $20 million in venture funding, including a $7 million infusion in early 2002 at a post-money valuation of approximately $14.2 million.

Marc Sacks has decided to leave Adams Street Partners after an eleven-year run as a partner in its fund-of-funds group, according to PrivateEquityCentral.net. No word on where Sacks will go, but his replacement at Adams Street will be Timothy Kelly, who moves over from GE Capital.

Volcano Therapeutics Inc., a Rancho Cordova, Calif.-based maker of invasive cardiac diagnostic medical devices, has raised $20.59 million in new funding from Ferrer, Freeman & Co.

Jeff Bede has been named a principal with Chessiecap Inc., a new technology I-bank in the mid-Atlantic region. Bede previously served as a co-founder and principal at Capital Run LLC, a Seattle-based boutique investment bank that specializes in providing private equity, debt and M&A advisory services.

Cadwalader, Wickersham & Taft LLP has elected nine new partners. Among the promotions are: Michele Cohen of the New York Financial Restructuring Department; Gregg Jubin in the Washington Capital Markets Department; Frank Polverino in the New York Capital Markets Department, Jeffrey Rotblat in the New York Capital Markets Department; and Matthew Williams in the London Banking and Finance Department.

CSFB Private Equity has exercised its warrants to purchase 4.4 million shares of common stock in Brigham Exploration Co. (Nasdaq: BEXP). The warrants were issued in connection with Brigham’s sale of Series A and Series B preferred stock in March 2001 and December 2002, respectively. CSFB used $10 million of Series A preferred stock and $10 million of Series B preferred stock to pay for the exercise of the warrants and Brigham did not receive any additional proceeds from the exercise of the warrants.

Kent Penzold, a principal with AZ Ventures LLC, has joined the board of directors at EDT Learning Inc. (AMEX: EDT).

Texas Pacific Group has sold its remaining stake in publicly traded, UK-based pub chain Punch Taverns PLC. Various UK press outlets are reporting that Goldman Sachs was the buyer at a small discount, but that the reduction could not offset Goldman’s losses as Punch Taverns’ stock price dropped significantly on news of Texas Pacific’s disposal.

Paul Wythes, a founding partner of Sutter Hill Ventures, has been selected as the 30th Distinguished Alumnus of the U.S. Navy Supply Corps.

Medisyn Technologies Inc., a Minneapolis-based biotech company, has received $1.5 million in bridge financing led by Sherpa Partners.

Reuters is reporting that NIF Ventures of Japan and Pama Inc. of Hong Kong have teamed up to form a 30 billion Yen (approx. $277 million) buyout fund aimed at small, distressed businesses based in Japan.
NEWS FROM WEDNESDAY 12/10

CTrip.com International Ltd., a Shanghai-based online travel company, began trading yesterday on the Nasdaq under ticker symbol CTRP. The company priced 4.2 million American Depository Shares at $18 per share, and closed trading yesterday at $33.94 per share. CTrip.com had raised over $25 million in venture capital funding. Company shareholders include the Carlyle Group, IDG Technology Venture Management, Tiger Technology Private Investment Partners and S.I. Technology Venture Capital. www.ctrip.com

 

Michael Feuer, co-founder and CEO of OfficeMax Inc., and Ralph Della Ratta, former senior managing director and manager of I-banking at McDonald Investments, have formed Max Ventures, a Mayfield Heights, Ohio-based VC and operational firm focused on the specialty retailing market.   Feuer will leave his OfficeMax post after the retailer’s sale to Boise Cascade Corp. is complete.

 

Hagemeyer NV has worked out a 1.5 billion bailout package with its banks, even though the Dutch goods distributor had also been discussing a recapitalization to be led by Clayton Dubilier & Rice Inc. Hagemeyer said that the bank deal will provide better shareholder value. www.hagemeyer.com

 

IntelliDOT Corp., a San Diego-based provider of patient and drug information barcodes and handheld scanning-devices used by nurses, has raised $15 million in Series B funding. Menlo Ventures led the deal, and was joined by return backers American River Ventures and Shoreline Ventures. www.intellidot.net

 

AimNet Solutions Inc., a Norwalk, Conn.-based network infrastructure services provider, has acquired Paradigm Technology Partners, a Nashua, N.H.-based provider of managed services and security solutions. The combined company will receive a $2.5 million investment from existing company investors Great hill Equity Partners, Mellon Ventures, William E. Simon & Sons, ClearLight Partners LLC, North Atlantic Capital Corp. and Hickory Hill Ventures. www.aimnetsolutions.com

 

Bear Growth Capital Partners, a private equity affiliate of Bear Stearns, has sponsored a recapitalization of Clintrak Pharmaceutical Services LLC, a Ronkonkoma, N.Y.-based provider of clinical trial labeling, packaging and logistical services to the pharmaceutical industry. No deal terms were disclosed.

 

The Paladin Capital Group, Washington, D.C.-based private equity firm that features a homeland security investment fund, has formed a strategic alliance with Civitas Group LLC, a homeland security consultancy. The pair will seek to jointly serve emerging companies with new technologies that have a direct application to homeland security. www.paladincapgroup.com

 

MedAptus Inc., a Boston-based provider of point-of-care solutions for physicians, has raised $5 million in a new funding round led by existing investor Boston Millennia Partners. In related news, the company has named vice chairman Dennis Mitchell to the position of CEO. www.medaptus.com

 

Advent International has invested $5 million in PowerSteeringSoftware Inc., a Cambridge, Mass.-based provider of enterprise program management.

 

The Nikkei Report says that Tokyo Electric Power Co. will resume making new investments into venture capital funds in fiscal 2004, after having temporarily suspended such activities due to costs associated with scandals related to its nuclear power plants.

 

The Deal is reporting that Blackstone Group has agreed to acquire Sulo Group, a Germany-based provider of waste disposal services. No deal terms were disclosed, but the total transaction is believed to be valued at least as high as 500 million.

 

Multimedia Live has confirmed earlier press reports that it has raised $7.5 million in new funding from Sequoia Capital. www.mmlive.com

 

Reuters is reporting that Philip Cooper has been promoted to a new position as chairman of Goldman Sachs Private Equity Partners, a private equity fund-of-funds group under the purview of Goldman Sachs Asset Management. Cooper previously served as a managing director in charge of the group. Goldman Sachs also reportedly promoted Geoff Clark and Mike Meile as new co-heads of the private equity group.

NEWS FROM TUESDAY 12/9

TA Associates has completed a $72.5 million investment in Logistics Health Inc. (LHI), a La Crosse, Wis.-based provider of medical readiness, emergency preparedness and homeland security solutions. Goodwin Procter LLP served as legal counsel for TA Associates, while Rider Bennett acted as legal counsel for LHI.

Immunicon Corp., a Huntingdon Valley, Pa.-based company specializing in cell-based research and diagnostic products with an initial focus on cancer, has filed to raise $86.25 million via an IPO on the Nasdaq under proposed ticker symbol IMMC. UBS Investment Bank is lead managing the deal. Immunicon has raised over $86 million in venture funding from investors like Canaan Partners, Johnson & Johnson Development Corp., TL Ventures, MDS Life Sciences, LHC Corp. Wheatley Partners, Anthem Capital, Burrill & Co. and Foundation Medical Partners.

EM4 Inc., a Burlington, Mass.-based provider of contract design and manufacturing services for photonics and integrated optics, has raised $8 million in Series B funding. Return backer Baker Capital led the deal, and was joined by Rustic Canyon Group and CapMan Ventures. The company previously had raised $16 million in Series A funding at a post-money valuation of approximately $31 million.

North America Construction Group (NACG), an Edmonton, Canada-based energy services company, has been acquired by a private equity consortium for $310 million. Investors included The Sterling Group, Genstar Capital, Perry Strategic Capital, Stephens Group, BNP Paribas Securities and members of NACG management. The investor group raised $200 million of 8.75% high yield debt and Cdn$50 million in the form of a senior term loan to finance the acquisition. The company also secured a Cdn$70 million un-drawn revolving credit facility to finance future growth. The high yield and senior debt financing was led by BNP Paribas and RBC Capital Markets.

Akonix Systems Inc., a San Diego-based provider of enterprise communications management software, has raised $11 million in Series B funding. Menlo Ventures led the deal, and was joined by return backers Mission Ventures, Palomar Ventures and Winward Ventures. As part of the deal, Menlo Ventures’ H. DuBose Montgomery joined the Akronix board of directors. The company now has raised over $21 million in venture capital funding.

Red Bend Software, a Framingham, Mass.-based provider of software delivery solutions, has raised $3.6 million in third-round funding. Pitango Venture Capital led the deal, and was joined by return backers Infinity and Carmel Ventures.

Conduit Capital Partners LLC, a newly-formed private equity investment management firm, has assumed the role of investment manager of the Scudder Latin America Power Funds, with initial investments in excess of $257 million. Conduit’s eight-person team, led by Scott Swensen and George Osorio, has been managing these funds, to be renamed Latin Power I & II, since 1993. Prior to forming Conduit, the team was part of an affiliate of Deutsche Bank, which acquired the team in the course of the acquisition of Zurich Scudder Investments Inc. in 2002. Conduit intends to continue its strategy of building and buying medium-sized electrical generation plants in Latin America.

 

Wellspring Capital Management has acquired a majority stake in Edwin Watts Golf Inc., a Ft. Walton, Fla.-based retailer of golf equipment, apparel and accessories. No deal terms were disclosed.

Blue Agave Software Inc., a Cambridge, Mass.-based provider of supply chain event software, has raised $6 million in Series B funding. Return backers included Sigma Partners and Flagship Ventures.

Gores Technology Group has agreed to acquire substantially all of the U.S. assets of Cable & Wireless PLC for $125 million, a sum that is comprised of $50 million in cash and a $75 million note from Gores. Cable & Wireless filed for Chapter 11 bankruptcy protection in accordance to the terms of the deal. Also, CWA installed John Dubel as the CEO of the U.S. business and Eric Simonsen as chief restructuring officer and CFO. Both come to CWA from Alix Partners LLC.

Vontu Inc., a San Francisco-based provider of security and surveillance software and solutions, has raised approximately $9.95 million in Series B funding. U.S. Venture Partners led the deal, which was joined by return backers Benchmark Capital and Venrock Associates. The company now has raised around $15 million in total venture funding.

Apertio Ltd., a Bristol, UK-based provider of infrastructure software for the mobile telecom industry, has raised $6 million in Series A funding. Deutsche Venture Capital and Motorola Inc. came in as new investors, while seed backers Eden Ventures and The Tokarz Group also participated. XATA Corp. (Nasdaq SC: XATA) a Minneapolis-based maker of onboard fleet management solutions for the private fleet trucking industry, has received a $4 million investment from Trident Capital.

Aqueduct Inc. and ChannelWave Software Inc. merged on December 1, and maintained the Channelwave Inc. name. The company will maintain offices in both Aliso Viejo, Calif. and Cambridge, Mass. Aqueduct was founded in 1999 as a spin-off of Buy.com., and has raised $29 million in venture funding from Mobius Venture Capital, U.S. Venture Partners and ThinkTank LLC. ChannelWave was founded in 1998, and has raised over $60 million in venture funding from ABS Capital Partners, Blue Rock Capital, Ironside Ventures, Lazard Technology Partners, Mobius Venture Capital, U.S. Venture Partners and MF Private Capital.

Wind Point Partners has completed its acquisition of ARR-MAZ Products LP, a producer of process chemicals and additives for the fertilizer and asphalt industries.

Carol Larson has been promoted to president of the David & Lucile Packard Foundation. She previously had served as the group’s vice president and director of programs.
NEWS FROM MONDAY 12/8
Portola Pharmaceuticals Inc., a South San Francisco-based biopharmaceutical company focused on cardiovascular diseases, has raised $21 million in Series A funding. Sutter Hill Ventures, Prospect Ventures and MPM Capital all co-led the deal. Other participants included Abingworth Management and Frazier Healthcare Ventures. As part of the deal, the Portola board of directors has added: Jeff Bird of Sutter Hill, Russell Hirsch of Prospect Ventures, Nick Galakatos of MPM Capital, Alan Frazier of Frazier Healthcare and Michael Bigham of Abingworth.

PE Week is reporting that CIT Group (NYSE: CIT) is taking secondary market bids on a private equity fund portfolio currently managed by Laud Collier & Co.

Azanda Network Devices, a Sunnyvale, Calif.-based provider of integrated traffic processing products for access, edge and core networks, has raised $10 million in Series C funding. Return backers included Bessemer Venture Partners, Highland Capital Partners, Newbury Ventures, Commonwealth Capital Ventures, GS PEP Technology Fund ( affiliate of Goldman Sachs Asset Management) and Wall Street Technology Partners (tech fund managed by Dresdner Kleinwort Capital). The company now has raised $51 million in venture funding since its 2000 inception.

Pivotal Corp. (Nasdaq: PVLT) has accepted a buyout offer from CDC Software Corp., thus ending an extended bidding war that also has included Oak Investment Partners and Onyx Corp. The deal ultimately will be worth between $55 million and $59 million.

The Times of London is reporting that a planned buyout of UK-based wax museum operator Tussauds Group has fallen apart. Both BC Partners and PAI Partners submitted bids in the £750 million to £800 million range, but majority owner Charterhouse Group was looking for at least £900 million. Charterhouse now plans to recapitalize the company.

Nexagent Ltd., a UK-based provider of independent multi-carrier interconnect services, today announced that it has raised £15 million (approx. $26.02 million) in Series B funding. Apax Partners led the deal (which actually closed in Q3 2003) and was joined by fellow new investors Lago Ventures and Quester Capital, plus return backers Atlas Venture and Benchmark Capital.

Bluespec Inc., a Waltham, Mass.-based provider of electronic design automation (EDA) tools, has raised $4 million in first-round funding at a post-money valuation of $7.62 million. Atlas Venture and North Bridge Ventures participated on the deal, which actually closed during the third quarter.

Private Business Inc. (Nasdaq: PBIZ), a Nashville, Tenn.-based provider of cash flow and retail inventory management solutions, has received a $20 million private equity placement from The Lightyear Fund. The deal includes 16 million Series A preferred shares sold at $1.25 per share. The shares also carry a 10% dividend. The transaction is expected to close early next month.

Dow Jones is reporting that French private equity firm PAI Partners has agreed to pay €508 million (approx. $620 million) to acquire 66.85% of Italy-based espresso machine maker Saeco Group. The acquired stake is currently owned by Saeco management, while the remaining 33.15% will be offered on the public market at €3.59 per share, which is below market price.

Republic Engineered Products LLC has reached a tentative agreement to sell its assets to PAV Republic Inc., a new company formed by private equity firm Perry Strategic Capital Inc. No terms of the deal were disclosed, and it still is subject to U.S. Bankruptcy Court approval. A hearing is scheduled for today.

Pixology PLC, a UK-based provider of digital photo printing software solutions, has begun trading its ordinary shares on the London Stock Exchange’s Alternative Investment Market (AIM). The company successfully raised £8 million, after placing over 5.71 million shares at 140 pence per share. Pixology has raised over $12 million in venture capital funding from 3i Group and Young Associates Ltd.

Check Ehrlich has been elected chairman of Sausalito, Calif.-based Angel Capital Network Inc., where he will oversee the expansion of services for investors and entrepreneurs. Ehrlich has been teaching e-business and entrepreneurship at the University of San Francisco Graduate School of Management since 1999 and is on the faculty of the USF New Venture Center. He is principal of The Ehrlich Organization, a consulting company, and serves as a mentor for The Women’s Technology Cluster.

PODS Inc., a Clearwater, Fla.-based provider of mobile storage and moving solutions for residential and commercial customers, has raised $15 million in new funding from The Lafayette Investment Fund and Hunt Private Equity Group. The firm also received an additional $3 million of private equity from unnamed investors, and secured a $25 million senior credit facility through Congress Financial Corp.

Glenn Hutchins, a founder and managing director of Silver Lake Partners, has resigned from the board of Instinet Group Inc. (Nasdaq: INGP), on which he has served since September 20, 2002.

The Austin-American Statesman is reporting that Austin-based chipmaker Layer N Networks Inc. has raised $6.9 million of a planned $9 million VC funding round. Investors in the deal include Austin Ventures, LG Ventures, Granite Ventures and T1 Ventures.

Walter Industries Inc. has completed its previously announced $125 sale of JW Aluminum Co. to Wellspring Capital Management for $125 million.

StarGen Technologies Inc., a Malborough, Mass.-based semiconductor company, has received a strategic investment from Intel Capital. No deal terms were disclosed.

Glykoz, an Australia-based biotech company, has received a $2.14 million investment from the Queensland Investment Corp., according to Australian press reports. Prudential Capital Partners has provided $37 million in senior subordinated note funding to Sunstate Equipment Co. The financing enabled Phoenix-based Sunstate to repurchase a minority stake in the business held by John Deere & Co.

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