PE Week Wire — Friday, July 15

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Counting Down The Hours…

Very slow news day, as folks apparently are starting their weekends early. But I hate leaving you with nothing, so…

***First, a huge thanks to everyone who volunteered to donate items to our potential PE Week Wire Charity Auction. I’ve gotten emails offering over $10,000 in donations, and I’m hoping more items/ideas will keep rolling in over the weekend (more formal details should come next week).

There is, however, one type of item I haven’t seen yet, and which I’m really hoping for: Your time. For VCs, this could mean the opportunity for an entrepreneur to make a 45-minute elevator pitch. For LBO pros it could mean lunch with a prospective MBA candidate. PR folks could offer a free consultation. Be creative..

*** What is it about emerging VC managers in Texas being unable to raise funds? First it was Techxas Ventures suspending fund-raising, and now Tejas Ventures is shutting down after failing to secure enough capital commitments for its $75 million-targeted debut vehicle. Rob Adams, an Austin Ventures and TL Ventures alum who co-founded Tejas last year, believes that the issue is more about being an emerging manager than it is about being from Texas: “Everyone out there claims to have emerging manager programs, but very few emerging managers have actually gotten funding, except for Shasta Ventures, Ignition Partners and Union Square Ventures. Those groups all have GPs with 20 years of combined experience and 15 exits, while we have 15 combined years of experience and just a few exits.”

Interesting complaint, and one that I’ve heard consistently from emerging managers over the past year (particularly when I discuss the evils/existence of LP overhang). I’ll do some number crunching on this and report back on Monday.

*** One of the stumbling blocks to U.S.-China economic harmony has to do with intellectual property (IP) protection, and how the Chinese government doesn’t seem terribly interested in it. Battery Ventures, however, has just discovered that identity theft can also be a problem.

As first reported in today’s Private Equity Insider, a new China-based website has emerged that is a virtual carbon copy of the Wellesley, Mass.-based Battery Ventures website, down to the names of individual partners (apparently real Battery headshots used to be on there, but have since been replaced). Check out the comparison between the real site and the fake one.

    Top Three

 

BrainCells Inc., a San Diego-based drug company focused on neurology, has raised $17.7 million in Series A funding. The deal is structured whereby Braincells has received $8 million, and is guaranteed the remaining $9.7 million if it reaches certain milestones. Technology Partners and seed backers Oxford Bioscience Partners and Bay City Capital co-led the deal, and were joined by A.M. Pappas & Associates, Neuro Ventures and various individuals. www.braincellsinc.com

Tejas Ventures is in the final stages of shutting down, after being unable to secure enough capital commitments for its inaugural fund. The Austin, Texas-based firm was launched in July 2004 by Austin Ventures alumni Rob Adams and Chris Grafft, and planned to make seed, early and expansion-stage investments into software and software-enabled services companies. News of the closure was first reported by the Austin-American Statesman. www.tejasventures.com

The Kauffman Fellows Program has formed a partnership with the UK Department of Trade and Industry, in order to recruit British venture capital firms to sponsor Kauffman Fellows in 2006. www.kauffmanfellows.org

    VC Deals

Control4 Corp., a Salt Lake City-based, has raised $15 million in third-round funding. Foundation Capital led the deal, and was joined by return backers Frazier Technology Ventures, Thomas Weisel Venture Partners and vSpring Capital. www.control4.com

Troika Networks Inc., a Westlake Village, Calif.-based provider of network-based storage services, solutions and enabling technologies, has raised $14.4 million in Series B funding. Return backers included Anthem Ventures Partners, Draper Fisher Jurvetson, DynaFund Ventures, Hamilton Technology Ventures and Windward Ventures. Troika has raised over $90 million in VC funding since its 1998 inception, including a Series A recap deal last year. www.troikanetworks.com

SeeControl Inc., a San Mateo, Calif.-based provider of B2B inventory and asset visibility solutions, has raised first-round VC funding from Altos Ventures, Peninsula Equity Partners, Stanford University, Wilson Sonsini Goodrich & Rosati, Western Technology Investment and Larry Mohr (founder of Mohr, Davidow Ventures). www.seecontrol.com

Filmnight Ltd., a UK-based film bricks-and-clicks film retailer, has raised an undisclosed amount of new VC funding from NewSmith Asset Management. www.filmnight.com

    Buyout Deals

Gecis, an India-based business process outsourcing company previously known as GE Capital International Services, has agreed to acquire Creditek Corp., a Parsippany, N.J.-based order-to-cash cycle and enterprise receivables management company. No financial terms were disclosed for the deal, which is expected to close within 30 days. GE sold a 60% stake in Gecis earlier this year to General Atlantic and Oak Hill Capital Partners, while Creditek is controlled by Parthenon Capital and General Atlantic. www.gecis.com www.creditek.com

ABN AMRO Capital has bought Dutch specialty chemicals distributor IMCD Group NV from AlpInv*st Partners for an undisclosed amount. www.imcdgroup.com

Code Hennessy & Simmons has acquired a majority equity position in American Asphalt & Grading Co., a provider of integrated infrastructure construction services to the Southern Nevada residential homebuilding market. No financial terms were disclosed. www.aaandg.com www.chsonline.com

Bridgepoint has sold UK-based Molten Brown Ltd., a UK-based provider of luxury goods focused on the personal care market, to Kao Corp. of Japan for Gbp170 million. www.moltonbrown.co.uk

    PE-Backed IPOs

Bronco Drilling Company Inc., an Oklahoma City-based provider of contract land drilling services to the oil and natural gas industries, has set its proposed IPO terms to 4.7 million common shares being offered at between $14 and $16 per share. It plans to trade on the Nasdaq under ticker symbol BRNC, with Johnson Rice & Co. and Jefferies & Co. serving as lead underwriters. The company was formed in June 2001 by affiliates of Wexford Capital, which holds a 100% pre-IPO ownership stake. www.broncodrill.com

Quintana Maritime Ltd., a Houston-based provider of drybulk marine transportation services, priced million shares at per share, for a total IPO take of approximately. It will trade on the Nasdaq under ticker symbol QMAR, while Citigroup and Morgan Stanley co-underwrote the IPO. Quintana was controlled by First Reserve Corp. prior to the offering.

Landof Leather, a UK furniture retailer 50% owned by SB Capital, is planning a Gbp37.5 million public flotation later this month that would value the company at around Gbp77.6 million.

    PE-Backed M&A

Martin Dawes Systems, a UK-based provider of CRM software solutions, has acquired Lavastorm Technologies Inc., a Boston-based provider of revenue and business assurance software. No financial terms were disclosed. Lavastorm had raised over $65 million in total VC funding from firms like Hummer Winblad Venture Partners, Oak Investment Partners, Telus Ventures and Lehman Brothers. www.martindawessystems.com www.lavastormtech.com

VeriSign Inc. (Nasdaq: VRSN) has acquired Reston, Va.-based security intelligence company iDefense for approximately $40 million in cash. IDefense was backed by Dorset Capital. www.verisgn.com www.idefense.com

    Firm & Fund News

Altos Ventures of Menlo Park, Calif. is raising $100 million for its third fund, according to a regulatory filing. It already has secured $37.42 million in commitments from LPs like Duke Management Co., Northwestern Mutual Life Insurance Co. and Fairview Capital. Altos is using Thomas Capital Group as its placement agent. www.altosvc.com

    Human Resources

Ken Fletcher has joined the M&A/corporate finance practice of Starlight Capital Inc. of Washington D.C. He is co-founder of the VC-based event forum CapitalVenue, and previously spent more than two years with the U.S. Small Business Administration. www.starlightcapital.com

Jonathan Nyce, former chairman and CEO of Epigenesis Pharmaceuticals Inc., yesterday was convicted of manslaughter and tampering with evidence in connection with the January 2004 slaying of his wife. Nyce served as chairman and CEO of Epigenesis until 2003, when VC backers reportedly forced him out of the company.

THURSDAY, JULY 14

  Random Ramblings

A few notes while awaiting the arrival of Home Contractor #2 (for those keeping score, Home Contractor #1 was an abject failure):

* I began the week with a plan to write about “blank check” acquisition companies filing for IPOs, with a particular emphasis on those formed, or supported, by private equity firms. Recent examples include MDC Acquisition Corp. (McCown De Leeuw& Co.) and Confluence Acquisition Partners I (SV Life Science Advisors and Pequot Capital). Lots of questions here, including why certain firms would raise public money instead of simply investing out of existing private funds/raising new private funds. Just seems strange in a SarbOx-tinged era of PE pros talking about the value of staying private (kind of like the fizzled BDC explosion of early 2004). Unfortunately, I’ve spent absolutely no time yet on the matter, but wanted to let you know that I was at least thinking about it, if not actually researching it yet. Please send in all thoughts and observations.

* A couple of you asked why yesterday’s column was devoted to Omniture’s VC deal instead of to Colin Powell joining Kleiner Perkins. Two answers: (1) I figured you could read about Powell elsewhere, if interested. There have been 41 print stories on the “hire,” plus countless blog posts. If this was basically a PR move – as some cynics have suggested – it certainly worked. That said, I can’t quite figure why Kleiner would need additional PR. (2) I really don’t think it’s that big of a deal. Sure Powell is a big name the big contacts (hence the massive coverage), but Kleiner and other VC firms have lots of big names in their LP base. Powell looks like he’s going to be a bit more hands-on, which is good for Kleiner, but it’s not like he’s transitioning into a fulltime GP role. This will be like Jack Welch at Clayton Dubilier, not like Bill Weld at Leeds Weld or Joe Montana at Champion Ventures (and there still is no apt comparable! to Bono’s general partner title with Elevation Partners) .

* Hey West Coasters: On Tuesday, July 26, I’ll be giving the keynote address at PricewaterhouseCoopers’ Private Equity CFO Summit in San Francisco. Sure it means that I don’t actually get to eat lunch, but I can double up on the cocktails at night.

* Bessemer Venture Partners passed on FedEx seven times? Wow.

* A quick list of some VC deals in the pipeline.

* Finally, I’m interested in doing a charity auction of sorts via the Wire, whereby readers would donate items, other readers would bid on them, and all the proceeds would go to a non-profit (I’ve got two in mind, both of which have a bit of a business angle). Sports tickets, free tee times, dotcom memorabilia and the like. If anyone has something they might be willing to part with, please let me know ASAP via email. It won’t be binding, but I just want to get a sense of what’s out there…

    Top Three

 

The Carlyle Group and Eurazeo have entered into exclusive negotiations with LBO France to sell their 100% stake in Groupe Terreal, a France-based maker of clay construction products, for 860 million euros. www.eurazeo.com www.terreal.com

FiberTower Corp., a San Francisco-based provider of backhaul services for wireless carriers, has raised $150 million in private equity funding. The deal included $55 million from Crown Castle International Corp. (which now holds a 32% stake), and other participation from Oak Investment Partners and Affiliates, Tudor Investment Corp., Goldman, Sachs & Co. and Meritech Capital Partners. www.fibertower.com

IGN Entertainment Inc., a Brisbane, Calif.-based provider of community-based Internet media and services for video gaming, has filed to raise $200 million via an IPO of common stock. It plans to trade on the Nasdaq under ticker symbol IGNT, with Deutsche Bank and Lehman Brothers serving as lead book-running managers. IGN was a public company until being taken private following a 2003 buyout led by Great Hill Partners. Great Hill holds a 40.3% pre-IPO stake, while other significant shareholders include Liberty Mutual Insurance Co. (23.8%) and Banc of America Capital Inv*stors (10.3%). www.ign.com

    VC Deals

Vitae Pharmaceuticals Inc., a Ft. Washington, N.J.-based drug company, has raised $15 million in VC funding. Return backers include Atlas Venture, New Enterprise Associates, Prospect Venture Partners, Venrock Associates and Wellcome Trust. The company has now has $90 million in total VC funding since its 2001 inception, including a $34 million infusion earlier this year. www.vitaepharma.com

Immune Control Inc., a Conshohocken, Pa.-based drug company focused on the treatment of multiple myeloma and other immunological diseases, has raised $11.3 million in Series A funding. Participants included Domain Associates, BioAdvance Ventures (managed by Quaker BioVentures), NewSpring Capital and Anthem Capital. www.immunecontrol.com

Homestead Clinical Corp., a Seattle-based biotech formed by local incubator Accelerator Corp., has raised an undisclosed amount of Series A funding. Participants included Accelerator sponsors MPM Capital, Amgen Ventures, OVP Venture Partners, ARCH Venture Partners, Versant Ventures and Alexandria Real Estate Equities. www.acceleratorcorp.com

Telefonica Celular del Paraguay SA, a subsidiary of Millicom International Cellular SA, will receive $15 million in funding from The International Finance Corp., the World Bank Group‘s private sector arm. www.ifc.org

    Buyout Deals

 

Charlesbank Capital Partners has acquired Walco International Inc., a Westlake, Texas-based distributor of animal health products, from Bain Capital. No financial terms were disclosed. The buyout is Charlesbank’s first investment out of its sixth fund, which closed with $900 million last month. www.walcointl.com

Permira has sold its control position in German car maker Grammer AG to unnamed institutional inv*stors in Europe. The deal also included a sale by members of the Grammer family. In total, the transaction involved a sale of 83% of Grammer for 205 million euros, with Deutsche Bank serving as placement agent. www.grammer.de

Hellman & Friedman has completed its $1.1 billion buyout of DoubleClick Inc. (Nasdaq: DCLK). JMI Equity also contributed equity to the deal. www.doubleclick.com www.hf.com

Eurazeo has acquired Financiere Galaxie SAS – owner of European budget hotel chain B&B Hotel — from Duke Street Capital and other shareholders. No financial terms have been disclosed.

Carlyle Venture Partners has acquired Dulles, Va.-based software provider Compusearch Software Systems Inc. for an undisclosed amount. American Capital Strategies provided senior term loans, senior subordinated notes and equity. www.compusearch.com

The Blackstone Group and Battery Ventures have increased their bid for a 20% equity stake in the New York Mercantile Exchange (NYMEX) from $180 million to $200 million, according to Dow Jones.

    PE-Backed IPOs

CryoCor Inc., a San Diego-based maker of a catheter system for cardiac arrhythmias,, priced 3.71 million common shares at $11 per share, for a total IPO take of approximately $40.81 million. It had been planning to sell 3.15 million shares at between $11 and $13 per share, and used W.R. Hambrecht’s Open IPO distribution method. CryoCor has raised $46.5 million in total VC funding since being spun out of CryoGen in 2000, including a $27.5 million Series D round in 2003. Significant shareholders include MPM Capital, Healthcare Equity Partners, OrbiMed Advisors and William Blair Capital Partners. www.cryocor.com

    PE-Backed M&A

TV Works, a joint venture of Comcast Corp. and Cox Communications Inc., has acquired MetaTV Inc., a Mill Valley, Calif.-based software services company. No financial terms were disclosed. MetaTV has raised around $62 million in total VC funding since its 1999 inception, from firms like Rosewood Capital, Redpoint Ventures, Liberate Technologies, Hearst Corp. Comcast Interactive Capital, Saints Ventures and Atrium Capital. www.comcast.com www.metatv.com

MarketResearch.com Inc., a New York-based source of market research reports and services, has acquired competitor MindBranch Inc. of North Adams, Mass. for an undisclosed amount. MarketResearch.com is backed by Axalon Ventures and Tribune Ventures, while MindBranch has raised VC funding from Berkshires Capital Inv*stors. www.marketresearch.com www.mindbranch.com

Raabe Co. LLC, a Menomonee Falls, Wis.-based manufacturer of custom matched touch-up paints, has acquired competitor Foxcolor Inc. of Oshkosh, Wisconsin. No financial terms were disclosed. Raabe is a subsidiary of Huron Capital Partners portfolio company Quest Specialty Chemicals Inc. www.huroncapital.com

    Firm & Fund News

Aberdare Ventures of San Francisco has secured nearly $130 million in limited partner commitments for its $150 million-targeted third fund, according to a regulatory filing. LPs include CalPERS, DuPont Pension Trust and Princeton University. In a February filing, the firm reported $113 million in commitments. www.aberdare.com

    Human Resources

The Carlyle Group has hired three professionals for its U.S. venture and growth capital team. They are: Stephen Bailey, a managing director who previously served as VP of corporate development for Dell Inc. and was a former principal with Dell Ventures; Charles Moore, a principal who previously was a managing director with Perseus LLC; and David Lam, a vice president who previously was director of business development with network storage company Panasas Inc. www.carlyle.com

Bruce Lohn has joined Norwest Equity Partners as an operating partner, focused on the distribution and logistics markets. He is a partner with Minneapolis-based BCL Equity Partners, and previously served as co-founder, president and COO of former NEP portfolio company CTC Distribution Services (acquired by R.R. Donnelley & Sons in 2000). www.nep.com

Amal Johnson has joined Mill Valley, Calif-based market research company MarketTools Inc. as CEO. She previously served as a founding partner of Lightspeed Venture Partners. www.markettools.com

Craig Hoffman has been named a managing director with UCC Consulting Corp., a New York-based provider of M&A and strategic advisory services to companies with core assets in intellectual property. Hoffman previously founded Hoffman & Co LLC. www.ucccapital.com

Greg Staples has joined Deutsche Asset Management‘s insurance asset management group as a senior portfolio manager responsible for fixed income portfolios for insurance clients. He has spent the past twenty years at Mutual of New York, where he was a senior managing director responsible for such asset classes as private equity, asset-backed securities, mortgage-backed securities, money markets and I-grade credit. www.deutsche-bank.com

Stephen Smith has stepped down as president and CEO of Universal Underwriters Group, an Overland Park, Kansas-based unit of Zurich Financial Services Group that is being acquired for approximately $1.1 billion by Hellman & Friedman, Farallon Capital Management, GIC Special Investments and members of Universal Underwriters Management (including Smith himself). www.universalunderwriters.com

WEDNESDAY, JULY 13

It’s A Big Deal

Huge news day, with Colin Powell “joining” Kleiner Perkins, Baidu.com filing to go public and AIG managing to close its Highstar fund while so much else is falling down around it. To me, though, the day’s biggest blurb (in substance, not in length) is that on-demand web analytics company Omniture raised $40 million in Series C funding. That is simply an enormous amount of money in the web analytics space, considering that Google reportedly grabbed Urchin for just $30 million, and that WebSideStory only raised $44 million in total VC funding before going public last year. Since I’m running very short on time, a couple of bullet points of interest about this company and deal

* Omniture certainly could have raised money on the public markets, had it tried. WebSideStory is currently trading at around $16.30 per share, which is nearly double its IPO price of $8.50 per share. Moreover, it’s gotten some very big-name customers (just added Ford Motor Co.) and was profitable before launching a fairly extensive growth initiative. So why not go public? Is it the dreaded SarbOx?

Company CEO Josh James says that the issue is one of flexibility. An IPO, he argues, could stifle Omniture’s ability to invest in sales, marketing, R&D, etc. To James, public=profitability pressure, and he doesn’t believe that he can build a market leader while always being concerned about moving from red to black (the company was once profitable, but currently is not due to the aforementioned growth initiative). Ditto for potential acquisitions, which James wouldn’t comment on, but which are almost a sure bet.

* If not an IPO now, could an acquisition come later? The reality is that there are only a handful of potential acquirers for a company like Omniture (Microsoft, SalesForce.com and, possibly, Google, comes to mind). More importantly, however, folks who know Josh James suggest that he’d have to be dragged kicking and screaming into an M&A situation, no matter how lucrative. He’s clearly got a single-track vision about Omniture becoming the undisputed market leader in web analytics (this isn’t just CEO/PR lip-service), and the idea of letting someone else take over would be anathema. In other words, expect this to be the last round of private funding, with an IPO in 2007 or 2008.

* What happened while BAVP worked? Rory O’Driscoll, the general partner with BA Venture Partners who led the Omniture deal, says that he first looked at Omniture a 1.5 years ago, for a round that ultimately was led by Hummer Winblad. When it came to due diligence this time around, however, he was beset by a number of unforeseen circumstances. First, the stock price of WebSideStory dropped about 23% in Mid-May, and didn’t recover for another month. Next, Google bought Urchin and immediately cut prices for Urchin customers. There also was a patent violation lawsuit brought against Omniture (and lots of other companies) by NetRatings. Despite all of this, O’Driscoll continued to believe in his initial assessment The WebSideStory trouble was temporary, he thought, and the revised Urchin pricing actually matched what BAVP had estimated in its market model. He declined to comment on the lawsuit.

* What is BAVP’s vision for the web analytics space, particularly when it comes to search behemoths like Google and Yahoo: This is the only place where things get a bit confusing from a future value perspective. On the one hand, O’Driscoll and market analysts say that while Google/Urchin clearly provide competition, the ultimate market leaders will be Omniture, WebSideStory and, possibly, Webtrends (there are lots of smaller players, but they’re getting gobbled up quickly). Why? Because companies will want to buy from dedicated providers. In other words, just because a company uses Google for keyword search, doesn’t mean that it will want them to break down website visitor demographics into various silos.

* OK, the “one throat to choke” theory doesn’t apply. But there is a bit of contradiction, in that Omniture and its peers are busy trying to provide all sorts of ancillary functions, including bid management, email, etc. If customers want just a dedicated provider, then why add all these bells and whistles? Isn’t Omniture trying to lure customers with a theory it believes is flawed when coming from Google? It’s a question I didn’t hear a great answer to yesterday, but I’m keeping my ears open.

    Top Three

 

Omniture Inc., an Orem, Utah-based provider of web analytics, has raised $40 million in Series C funding. BA Venture Partners led the deal, and was joined by Attractor Investment Management and return backer Hummer Winblad Venture Partners. www.omniture.com

The Blackstone Group has agreed to buy Lego Co.‘s four LegoLand amusement parks for 375 million euros. The parks are based in England, Germany, California and Denmark. www.blackstone.com www.lego.com

Colin Powell, former U.S. Secretary of State, has joined venture capital firm Kleiner Perkins Caufield & Byers as a strategic limited partner. www.kpcb.com

    VC Deals

Icrossing Inc., a Scottsdale, Ariz.-based search engine marketing company, has raised $13 million from new company backers RRE Ventures and Generation Partners. The company had received a $28 million VC infusion in 2000 at a post-money valuation of approximately $103 million. www.icrossing.com

Redfern Integrated Optics, an Australia-based maker of optical transmitters for the telecom and data switch markets, has raised US$6.2 million in third-round funding from Advent International, Tallwood Venture Capital, TMT Ventures and Redfern Photonics Pty Ltd. www.redfernintegrated.com

    Buyout Deals

 

DoubleClick Inc. (Nasdaq: DCLK) has received shareholder approval for its proposed acquisition by private equity firm Hellman & Friedman. The deal is valued at $1.1 billion, or $8.50 per share. JMI Equity is also contributing equity to the buyout. www.doubleclick.com www.hf.com

TA Associates has completed a $50 million majority recap of Quantitative Analytics Inc., a Chicago-based provider of database integration and analysis solutions to the financial services industry. www.qaisoftware.com www.ta.com

3i Group has agreed to buy UK-based parking services company National Car Parks Ltd. (NCP) from Cinven for approximately Gbp555 million. www.ncp.co.uk

General Atlantic and Quadrangle Group have agreed to acquire Dice Inc., a provider of online recruiting services for tech, engineering and security-cleared professionals. No financial terms were disclosed for the deal, which will result in GA and Quadrangle each holding an equal ownership position. The Wall Street Journal, however, reports that the price tag is around $200 million. www.dice.com

    PE-Backed IPOs

Focus Media Holdings Ltd., a Shanghai, China-based out-of-home advertising network, has priced 10.1 million American depository shares (ADS) at $17 per share (above its $14-$16 offering range), for a total IPO take of approximately $171.1 million. The company will trade on the Nasdaq under ticker symbol FMCN, with Goldman Sachs and CSFB served as lead underwriters for the offering. Significant shareholders include Goldman Sachs, 3i Group, Draper Fisher Jurvetson and Softbank Corp. www.focusmedia.com.cn

Baidu.com Inc., a Beijing, China-based Chinese language Internet search engine provider, has filed to raise $80 million via an IPO of American depository shares (ADS). It plans to trade on the Nasdaq under ticker symbol BIDU, with Goldman Sachs (Asia) and CSFB serving as lead underwriters. Significant shareholders include Draper Fisher Jurvetson (28.1% pre-IPO stake), Integrity Partners (11%), Peninsula Capital (10.1%) and IDG Technology Ventures (4.9%) and Google Inc. (2.6%). www.baidu.com

Net Mobile AG, a Germany-based mobile technology company, yesterday priced 2.2 million shares at 8.50 euros per share, for a total IPO take of approximately 18.7 million euros. The company will trade on the Munich stock exchange, and OTC in Frankfurt. Shareholders include Wellington Partners (20% post-IPO stake) and Shamrock Holdings. www.net-m.de

    PE-Backed M&A

ChannelAdvisor Corp., a Morrisville, N.C.-based provider of channel management solutions, has acquired SearchMarketing, a Seattle-based provider of natural and paid search optimization solutions for online merchants. No financial terms were disclosed. ChannelAdvisor has raised over $33 million in total VC funding, including an $18 million infusion earlier this year at a post-money valuation of approximately $23 million. Backers include Advanced Technology Ventures, Kodiak Venture Partners, TriState Investment Group, eBay Inc., Atlantis Group and Southern Capitol Ventures. www.channeladvisor.com

Xanodyne Pharmaceuticals Inc., a Florence, Ky.-based drug company, has won the bankruptcy auction for the pharmaceuticals division of aaiPharma Inc. (OTC BB: AAIIQ). The purchase price is $209.25 million, which is $40 million more than an original stalking horse offer announced when aaiPharma filed for Chapter 11 on May 10, 2005. Xanodyne also committed to purchasing up to $30 million of services to be provided by aaiPharma’s development services division over the next three years. Xanodyne has raised over $38 million in VC funding from Blue Chip Venture Co., Essex Woodlands Health Ventures and HealthCare Ventures. www.xanodyne.com www.aaipharma.com

Assay Designs Inc. of Ann Arbor, Mich. has acquired Stressgen Bioreagents Corp., a British Columbia-based maker of antibody and protein kits for life science research. No financial terms were disclosed for the deal, which was sponsored by Assay Designs shareholder Ampersand Ventures. Stressgen received VC funding in 1998 from Vector Fund Management. www.assaydesigns.com www.stressgen.com

Jobster Inc., a Seattle-based provider of targeted job advertising services, has acquired WorkZoo Inc., Fountain Valley, Calif.-based vertical search engine for job seekers. No financial terms were disclosed. Jobster has raised VC funding from Ignition Partners and Trinity Ventures. www.jobster.com www.workzoo.com

MindShift Technologies Inc., a Fairfax, Va.-based, has acquired Union Square Technology Group LLC, a New York-based provider of IT systems integration and other services to the legal sector. No financial terms were disclosed for the deal, although MindShift did say that Union Square had approximately $8 million in annual revenue. MiondShift has raised over $120 million in VC funding from firms like Bessemer Venture Partners, Columbia Capital and Fidelity Ventures. www.mindshift.com

Celenese Corp. (NYSE: CE) has received European Union approval for its proposed $492 million buyout of Canadian chemicals company Acetex Corp. Celenese is controlled by The Blackstone Group. www.blackstone.com

HB Performance Systems Inc., a braking systems maker acquired last month by Nautic Partners, has acquired the assets of Sun Metal Products, a Warsaw, Ind.-based maker of rims and wheel-sets for mountain bikes. No financial terms were disclosed for the deal, except that structured financing was provided by M&I Bank, LaSalle Bank and JPMorganChase. www.hayesbrake.com

Investment Technology Group Inc. (NYSE: ITG) has agreed to acquire The MacGregor Group, a Boston-based provider of trade order management technology to the global financial market. The all-cash deal is valued at approximat