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PE Week Wire — Friday, January 9

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World Wide Packets Inc., a Spokane, Wash.-based provider of Ethernet access networking solutions, has raised $15.7 million in third-round funding. New investors Madrona Venture Group and Northwest Venture Associates co-led the deal, and were joined by return backer Azure Capital Partners. World Wide Packets now has raised over $85 million in venture capital funding since its 1999 inception, including a $44 million Series A round at a post-money valuation of over $200 million, and a $26 million Series B round with a post-money valuation of approximately $65 million. Cascadia Capital represented World Wide Packets on the most recent round.

Parthenon Capital has led a $167 million recapitalization of Diversified Collection Services Inc., a Livermore, Calif.-based collection agency for government obligations like student loans and taxes. Madison Capital Funding led the senior debt tranche, with Allied Capital kicking in some subordinated debt. Converge Capital acted as an exclusive financial advisor to Parthenon, and also made an equity investment in DCS. Viant Capital acted as an exclusive advisor to DCS.

Ripplewood Holdings is considering a February IPO for portfolio company Shinsei Bank Ltd., according to various press reports. The offering would price on the Tokyo Stock Exchange, and could net upwards of $2 billion. If completed, the deal would be a major ROI coup for Ripplewood, which acquired Shinsei from the Japanese government in 2000 for approximately $1.1 billion.

Infotrieve Inc., a Los Angeles-based provider of Web-based library services to the scientific, medical and technical fields, has raised $21.8 million in Series B funding. Trident Capital led the deal and was joined by Signal Equity Partners and Boston Millennia Partners. Lazard Freres & Co. helped place the oversubscribed deal.

Athenix Corp., a Durham, N.C.-based biotech company that develops products for the agricultural and chemical industries, has raised $12.52 million in Series B funding. Investors include InterSouth Partners, Polaris Venture Partners and Hunt Ventures.

Auxeris Therapeutics Inc., a St. Louis-based biopharma company focused on the treatment of bone diseases, has raised $1.6 million in additional Series A funding. The round total now stands at $4.1 million, with investors including both Domain Associates and RiverVest Venture Partners.

TDR Capital is reportedly considering a bid for Ask Central PLC, a UK-based pizza and pasta chain. This would be the second bid for Ask Central, which already has a £168 million offer from UK restaurant group City Centre Restaurants.

Celerity Systems Inc. (OTC BB: CESY) has acquired an interest in Yorkville Advisors Management LLC, the investment manager of Cornell Capital Partners‘ private equity fund. No deal terms were disclosed.

Reuters is reporting that Japan’s government pension fund is looking to diversify its investment portfolio, but that alternative investments will not yet be an option. Instead, the system will look to diversify within its public equities and bond portfolio, before turning to such options as hedge funds, real estate of private equity.

Medicine Bow Energy Corp., a Denver-based energy development and production company, has acquired 100% of Edison Mission Energy Oil & Gas for approximately $100 million. Medicine Bow shareholders CSFB Private Equity, EnCap Investments and Liberty Energy Holdings helped Medicine Bow finance the acquisition.

NEWS FROM THURSDAY 1/8

Novacea Inc., a South San Francisco-based biopharma company focused on prostate, lung and other cancers, has raised $35 million in Series C funding. Apax Partners led the round, and was joined by return backers Domain Associates, New Enterprise Associates, Versant Ventures, Sofinnova Ventures and ProQuest Investments. The company now has raised $83 million since its July 2001 inception, including a $36 million Series B round in mid-2002 at a post-money valuation of approximately $63 million. www.novacea.com

 

Andrew Firlik has joined The Sprout Group as a New York-based general partner focused on healthcare technology investments. He most recently served as a principal with Canaan Partners. www.sproutgroup.com

 

Behrman Capital has acquired Hunter Defense Technologies Inc., a Solon, Ohio-based provider of niche defense and homeland security products like air filtration systems for military applications. The total transaction value is $90 million, with Hunter’s senior management also participating. No additional deal terms were disclosed. www.behrmancap.com

 

Magis Networks Inc., a San Diego-based provider of wireless home networking chipsets, has filed for Chapter 11 bankruptcy protection and plans to put its assets up for auction later this month. The company had raised over $50 million of venture capital funding, from investors like AOL Time Warner Ventures, Hitachi, Motorola, Panasonic, Sanyo, Viewsonic, Bay Partners, Crescendo Ventures, Vulcan Inc., Elwin Capital Partners, WK Technology Fund and China Development Industrial Bank. www.magisnetworks.com

 

Veritas Software Corp. (Nasdaq: VRTS) has agreed to acquire Ejasent Inc., a Mountain View, Calif.-based provider of application virtualization technology for utility computing. The all-cash transaction is valued at $59 million, and is expected to close by month’s end. Ejasent has raised over $60 million in venture capital funding, and was valued as high as $61 million (in 2000) before falling to its more recent post-money valuation of approximately $33.5 million. Company investors include Crescendo Ventures, Crystal Internet Ventures, Red Rock Ventures and Technology Crossover Ventures. www.ejasent.com

 

Inhibitex Inc., an Alpharetta, Ga.-based antibody producer focused on bacterial and fungal infections, has raised $18.25 million in Series E funding. The company now has raised over $80 million in venture funding, including a $45.4 million deal in early 2002 at a post-money valuation of approximately $90 million. No investor information is yet available on the latest round, but past backers have included Alliance Technology Ventures, Burrill & Co., CDP Capital, New Enterprise Associates, Pacific Horizon Ventures, Triad Ventures and William Blair Capital Partners. www.inhibitex.com

 

Scintera Networks Inc., a San Jose, Calif.-based provider of high-speed signal processing for the communications market, has raised $9.5 million in second-round funding. Kleiner, Perkins, Caufield & Byers led the round, and were joined by return backers August Capital and Sevin Rosen Funds. The company now has raised $17.7 million in venture funding since its 2001 inception. www.scinteranetworks.com

 

Accelerated Technologies Inc., a New York-based company focused on the commercialization of cardiovascular devices, has raised $32 million in second-round funding. New investors included ABN AMRO and Giza Venture Capital, with both firms now sharing an equal ownership stake with founding investor Oxford Bioscience Partners.

 

Code Hennessy & Simmons (CHS) has been named as a defendant in a putative class action lawsuit, along with Gundle/SLT Environmental and its directors, over what the complainants cited was a breach of fiduciary duty by Gundle/SLT concerning its proposed sale to CHS. A spokesman called the suit “frivolous” and said the company intends to “vigorously defend the litigation.”

 

Steven Kandarian will soon step down as head of the Pension Benefit Guarantee Corp., the federal agency that insures private sector pension plans. Prior to joining PBGC in late 2001, Kandarian was a managing director and founder of Wellesley, Mass.-based private equity firm Orion Partners. He also once served as a managing director of Boston-based Lee Capital Partners.

 

E4X Inc., a New York-based provider of currency management and conversion services for online merchants, has raised $14 million in third-round funding. Adams Street Partners led the deal, and was joined by fellow new investors Venture Strategy Group and On-Line Ventures. Return backers Pitango Venture Capital and Delta Ventures also participated. www.ex4.com

 

Infinity Pharmaceuticals Inc., a Cambridge, Mass.-based biopharma company focused on clinical genomics, has received a $25 million strategic investment from Amgen Inc. (Nasdaq: AMGN), as part of a larger collaboration agreement. This is Amgen’s second major investment of the New Year. Last week, the Thousand Oaks, Calif.-based company invested $20 million into Boston-based ViaCell Inc. www.ipi.com

 

NetByTel Inc., a Boca Raton, Fla.-based provider of voice commerce applications, has raised $8 million in Series D funding. Lazard Capital Partners and Noro Moseley Capital co-led the deal, and were joined by fellow return backers Chelsea Capital Partners and affiliates of Mesco Ltd. www.netbytel.com

 

Altus Capital Partners has held a $27.6 million closing on its SBIC fund, which now is eligible to apply for $55 million of additional capital from the Small Business Administration. The Westport, Conn.-based firm focuses on buyouts and recapitalizations. www.altuscapitalpartners.com

 

Galileo Genomics Inc., a Montreal-based genomics company, has raised CA$11.15 million (approx. US$8.96 million) in new venture funding. New investor Carnegie Fund II joined return backers HBM BioVentures, MVI and Biofund on the deal. www.galileogenomics.com

 

NEWS FROM WEDNESDAY 1/7

Intel Corp. has created the $200 million Digital Home Fund, which will invest in companies whose technologies allow consumers to edit, manage, access and share digital content between televisions, stereos, personal computers and handheld devices. Intel Capital will manage the new fund, and an official announcement is expected this morning during the Consumer Electronics Show in Las Vegas. For more on this story, pick up the next print edition of PE Week. www.intel.com/capital

 

The Carlyle Group has raised JPY50 billion (approx. $471 million) for Carlyle Japan Partners, a new fund that will make pro-management buyout investments in Japan. The firm says that nearly 60% of the capital commitments come from Japanese institutions.  www.carlylegroup.com

 

PTC Therapeutics Inc., a South Plainfield, N.J.-based drug company focused on RNA biology and chemistry, has raised $35 million in Series E funding. CSFB Private Equity and HBM Bioventures co-led the deal, and were joined by Bay City Capital, Delphi Ventures, Hansa Special Opportunities Fund Ltd., HealthCap, Novartis BioVentures, Novo A/S, POSCO BioVentures and Vulcan Capital. First Bermuda Securities helped place the deal, which brings PTC’s total venture capitalization to over $91 million. www.ptcbio.com

 

Silicon Optix Inc., a San Jose, Calif.-based fabless semiconductor company, has raised $18 million in additional Series B funding. This brings the total Series B funding up to $45 million, with $17 million raised in July 2002 and an additional $10 million coming in March 2003. All tranches were co-led by Canaan Partners and Polaris Venture Partners, with Origin Partners and Primaxis Technology Ventures also participating. The latest infusion also included investments from Firsthand Capital and Focus Ventures. www.siliconoptix.com

 

FLIR Systems Inc. (Nasdaq: FLIR)  has completed its previously announced acquisition of Indigo Systems Corp., a Goleta, Calif.-based maker of infrared sensors and cameras. Indigo shareholders received cash consideration of approximately $165.5 million, and all outstanding Indigo stock options were converted into options to purchase approximately 710,000 of FLIR common stock. The total transaction is valued at approximately $190 million. Indigo raised approximately $19.2 million in venture capital funding, from investors like Carlyle Venture Partners, Founders Capital Partners, Lago Partners and WK Associates. www.FLIR.com

 

Apax Partners and Hicks, Muse, Tate & Furst last night reportedly sold their remaining stakes in UK-based directories company Yell Group PLC. The pair’s 34% ownership stake was sold for approximately £700 million (approx. $1.27 billion), which means that the firms have recouped over 2.5X their original investment. www.yellgroup.com

 

Kubi Software Inc., a Lincoln, Mass.-based provider of collaborative email solutions and services, has raised $8 million in Series C funding. North Bridge Venture Partners led the round, and was joined by return backers Lazard Technology Partners and VIMAC Ventures. Kubi Software now has raised over $15 million in venture capital funding since its 2000 inception. www.kubisoft.com

 

TriWest Capital Partners, a Calgary-based private equity firm, has raised Ca$120 million (approx. $93 million) for its second fund. The firm also added a pair of principals: Kevin Jenkins, former president of Canadian Airlines and Westaim Corp., and Jeff Belford, former CFO of Swiss Water Decaffeinated Coffee Co. www.triwest.org

 

TA Associates has made an undisclosed investment into Drive Assist UK Ltd., a Staffordshire-based provider of replacement vehicles. Eversheds LLP and Goodwin Procter LLP served as legal counsel for TA Associates, while Travers Smith Braithwaite provided legal counsel to Drive Assist.

 

Forbes Med-Tech Inc. (Nasdaq: FMTI) (TSX: FMI) has raised $10.75 million through a private placement of Series A voting convertible preferred shares with attached warrants. Investors include Great Point Partners and Biotechnology Development Fund IV, which is managed by BioAsia Investments. www.forbesmedi.com

 

MetaCarta Inc., a Cambridge, Mass.-based provider of geographic information application solutions, has raised $6.5 million in new venture funding. Investors include Sevin Rosen Funds, Solstice Capital, Chevron Technology Ventures and Chisholm Private Capital Partners. www.metacarta.com

 

Motorola Ventures has made a strategic minority investment in Magic4 Inc., a UK-based provider of mobile messaging software solutions. No deal terms were disclosed.

 

William Hochman has joined New York-based Research Partners as senior vice president of global sales. He most recently served in a similar position for Standard & Poor’s Credit Market Services. www.researchpartnersltd.com

 

GTESS Corp., a Richardson, Texas-based provider of business outsourcing services for the healthcare industry, has raised $10 million in new venture funding. General Catalyst Partners and Kodiak Venture Partners co-led the deal, and were joined by return backers. The company now has raised over $16 million in venture capital. www.gtess.com

 

Dow Jones is reporting that Glucon, an Israel-based developer of non-invasive glucose monitoring technology for the diabetic market, has raised $13 million in first-round funding. Investors include Giza Venture Capital, InnoMed Ventures, Infinity Venture Capital and an unnamed Japanese distributor of medical devices.

 

Reuters is reporting that an unnamed private equity firm and Italy’s UniCredito have submitted final bids for Swiss Life‘s Banca del Gottardo private banking group. Both offers are reported to be worth at least $1.21 billion.

NEWS FROM TUESDAY 1/6

Spiration Inc., a Seattle-based medical device maker focused on the treatment of lung diseases, has raised $26.9 million in Series E funding. InterWest Partners and Investor Growth Capital co-led the round, and were joined by returning investors Three Arch Partners, New Enterprise Associates, Versant Ventures, Sprout Group and Guidant Corp. Spiration now has raised over $60 million in venture capital funding, including a $22 million Series D round in June 2002 at a post-money valuation of approximately $52.12 million. www.spirationinc.com

 

Array Networks Inc., a Campbell, Calif.-based provider of integrated Web traffic management and SSL VPN solutions, has raised $7.5 million in Series A recap funding from return backer H&Q Asia Pacific. The company now has raised over $49 million in venture capital since its 2000 inception, including a $31.1 million infusion in late 2000 at a post-money valuation of approximately $100 million. Investors on that deal included H&Q Asia Pacific, Comdisco Ventures and U.S. Venture Partners. www.arraynetworks.net

 

Time Inc. has sold its global music and video direct marketing subsidiary, Time Life Inc., to Direct Holdings Worldwide LLC. Direct Holdings also owns retailer Lillian Vernon Corp., and was created last July by Ripplewood Holdings LLC and ZelnickMedia Corp. Time Life Inc. now will operate under the Lillian Vernon brand, with Strass Zelnick serving as chairman and CEO. No deal terms were disclosed.

 

Alereon Inc., an Austin, Texas-based chipmaker for the personal area network (PAN) market, has held a $31.5 million first close on its Series A funding round. The company plans to hold an additional close on a small, undisclosed, amount of funding later this quarter. Austin Ventures led the completed tranche, and was joined by Pharos Capital, Centennial Ventures, Kinetic Ventures, eCentury Capital, Duchossois Technology Partners and PTV Sciences. www.alereon.com

 

Essent Healthcare Inc., a Nashville, Tenn.-based acquirer and financier of community hospitals, has received an $80 million investment. Vestar Capital Partners led the deal, and was joined by company management and existing investor Thoma Cressey Equity Partners. The new capital will be used to finance the acquisition of Christus St. Joseph’s Health System in Paris, Texas and to recapitalize the company for future investments. www.essenthealthcare.com

 

Onex Partners, the new private equity arm of Canadian conglomerate Onex Corp., has completed its $101 million acquisition of bankrupt managed healthcare company Magellen Health Services Inc. The transaction gives Onex a 24% ownership stake in Magellen, which expects to resume trading today on the Nasdaq under ticker symbol MGLN. www.magellanhealth.com

 

Decision Resources Inc., a Waltham, Mass.-based provider of pharmaceutical and managed care market research, has agreed to a $58 million recapitalization co-led by Castanea Partners and Boston Ventures. Peter Hoenigsberg, an operating partner at Castanea Partners, will succeed Samuel Fleming as company CEO. www.decisionresources.com

 

Zantaz Inc., a Pleasanton, Calif.-based provider of compliance and electronic discovery solutions, has raised $20 million in Series F funding led by General Atlantic Partners. Return backers included Red rock Ventures, Geneva Venture Partners, ComVentures, Novus Ventures and Athena Venture Fund. Zantaz now has raised over $85 million in venture funding since its 1998 inception, including a $36 million infusion in 2000 at a post-money valuation of over $275 million. It subsequently landed an $8.4 million down-round in 2002 at a post-money valuation of just around $24.4 million.

 

Riverbed Technology Inc., a San Francisco-based provider of solutions designed to improve application performance over distributed networks, has raised $10 million in Series B funding. UV Partners led the deal, and was joined by return backers Accel Partners and Lightspeed Venture Partners. The company now has raised a total of $16.6 million in venture funding. www.riverbed.com

 

Fluidigm Corp., a South San Francisco-based biotech company, has raised $21 million in Series D funding. The round was co-led by Invus LP and EDB Investments Pte. Ltd., the wholly owned investment arm of the Singapore Economic Development Board, Return backers Versant Ventures, InterWest Partners and Lehman Brothers also participated. www.fluidigm.com 

 

Sandburst Corp., an Andover, Mass.-based provider of modular network solutions, has raised over $19.5 million in Series D funding. Greylock and Matrix Partners co-led the deal, and were joined by fellow return backers 3i US, Investor Growth Capital, Analog Devices Inc., Boston University Community Technology Fund and Intel Capital. New investor Accton Technology Corp. also participated. Sandburst now has raised $56 million in venture funding since its mid-2000 inception. www.sandburst.com

 

Sophie Forest has joined Toronto-based Brightspark Capital as a managing partner. She previously served as a partner with CDP Capital-Technology Ventures, a subsidiary of the Caisse de Dépôt et Placement du Québec (CDP). She will work out of Quebec, where Brightspark is opening a new satellite office.

 

Thomas Drury has been named president and CEO of Voxware Inc. (OTC BB: VOXW), a Princeton, N.J.-based provider of speech recognition technologies. Drury most recently served as managing director and chief operating officer of BaseCamp Ventures. www.voxware.com

 

SkyBitz, a Dulles, Va.-based provider of satellite-based asset tracking and information management services to the transportation industry, has raised $16 million in Series C funding. Inverness Capital Partners and Motorola Ventures co-led the deal, and were joined by return backers AIG Highstar Capital and Cordova Ventures. In addition to the venture funding, SkyBitz signed a strategic development agreement with Motorola Inc. (NYSE: MOT). www.skybitz.com

 

Roving Planet Inc., a Boulder, Colo.-based provider of wireless LAN solutions for the enterprise, has raised $9.5 million in new venture funding. Appian Ventures and Draper Fisher Jurvetson co-led the round, and were joined by Wolf Ventures and Cardinal Ventures. Cascadia Capital helped Roving Planet place its deal.

 

SideStep Inc., a Santa Clara, Calif.-based provider of a Web-based travel search engine, has raised $8 million in new funding from Trident Capital. www.sidestep.com

 

PsiloQuest Inc., an Orlando, Fla.-based maker of specialty polishing pads for use in a semiconductor manufacturing process known as chemical mechanical planarization (CMP), has raised $7 million in Series B funding. Ngen Partners led the deal, and was joined by return backers Aurora Funds, Grace Venture Partners and Greyhound Fund. New investors DuPont, Air Products and Chemicals Inc. and Cycad Group also participated. www.psiloquest.com

 

Intransa Inc., a San Jose, Calif.-based provider of information storage over IP solutions, has raised $8.01 million in new Series C venture funding. Return backers included Advanced Technology Ventures, Sofinnova Ventures, Sofinnova Partners, US Venture Partners, and an unnamed pension plan. Intransa now has raised $49 million in venture funding since its 2000 inception, including a $7.1 million infusion earlier this year at a post-money valuation of approximately $59 million. www.intransa.com

 

Hillcrest Communications Inc., a Rockville, Md.-based provider of software and hardware focused on improving the television viewing experience, has raised $10 million in Series B funding. New Enterprise Associates led the deal with a $4 million investment, and was joined by Columbia Capital and Grotech Capital Group. The company now has raised around $15 million in private equity funding since its 2001 inception.www.hcrest.com

 

3M (NYSE: MMM) has agreed to acquire HighJump Software Inc., a St. Paul, Minn.-based provider of supply chain execution software. No terms were disclosed on the transaction, which is scheduled to close later this month. HighJump has raised over $18 million in venture capital funding from Gemini Investors, St. Paul Venture Capital and Upper Lake Growth Capital. www.highjumpsoftware.com

 

Redback Networks Inc. (Nasdaq: RBAKD) has received a $30 million equity investment from Technology Crossover Ventures, as part of a reorganization plan that has lifted Redback out of Chapter 11 bankruptcy protection.

 

Cogent Communications Group Inc., a Washington-based optical Internet service provider, has acquired the operating entities of LambdaNet Communications France SAS and LambdaNet Espana SA. Immediately preceding Cogent’s acquisition, LambdaNet Spain and LambdaNet France both received new equity investments from a group of unnamed private equity investors in both Europe and the U.S. The Washington Post is reporting that the investment included $2.5 million in cash for approximately 3.5% of the combined company’s stock. www.cogentco.com

 

NEWS FROM MONDAY 1/5

Ingrian Networks Inc., a Redwood City, Calif.-based provider of enterprise data privacy solutions, has raised $14 million in Series C and Series C-1 funding. Prism Venture Partners led the deal, and was joined by fellow return backers Globespan Capital Partners, HighBAR Ventures, and Partech International. The company now has raised over $40 million since its 2000 inception, including a $22 million Series B deal in 2001 at a post-money valuation of approximately $40 million. www.ingrian.com

 

JPMorgan Partners has agreed to acquire IMO Car Wash Group Ltd., a London-based conveyer car wash business that has been in business since 1965, from a group of private equity investors that include Bridgepoint and Phoenix Equity Partners. The transaction is valued at £350 million (approx. $610 million), with JPMorgan Partners acquiring the entire company. The sellers acquired a controlling stake in IMO via a 1998 buyout valued at £114 million. www.arc-carwash.net

 

Agere Systems Inc. (NYSE: AGRA, AGRB) has acquired TeraBlaze Inc., a Cupertino, Calif.-based developer of gigabit Ethernet switching solutions. The all-stock transaction includes approximately 6.92 million shares of Agere Class A common stock, valued at around $21 million as of market close Dec. 31. TeraBlaze had raised over $14 million in private equity funding since its 2000 inception, including an $8.04 million first-round deal at a post-money valuation of approximately $17.44 million. Company investors included Bay Partners, Alliance Ventures and Goldman Sachs. www.terablaze.com   

 

Masthead Venture Partners has held a $160 million close on its inaugural venture capital fund, according to The Deal. The Cambridge, Mass.-based firm expects to hold a final closing later this year on the fund, which is being marketed with a $200 million target capitalization. According to an SEC filing, Masthead held a $39.4 million first close on the fund last summer. www.mvpartners.com

 

MindMatters Technologies Inc., a Canonsburg, Pa.-based provider of an enterprise management platform for intellectual assets, has raised an undisclosed amount of new venture capital funding. Mid-Atlantic Venture Funds led the deal, and was joined by return backer Future Fund. www.us-mindmatters.com

 

Miles Gilburne, a managing member of ZG Ventures, has joined the board of directors at SRA International Inc. (NYSE: SRX), a Fairfax, Va.-based provider of IT services to the federal government. www.sra.com

 

Philip Bassett and Martin Clarke have both been promoted to the position of Partner at UK-based private equity firm Permira, according to Dow Jones. www.permira.com

 

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