PE Week Wire — Friday, June 18

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Bear Stearns Merchant Banking has formed a strategic investment partnership with Milan, Italy-based private equity firm Opera. Under terms of the deal, BSMB will designate up to €200 million for investment alongside Opera in Italian “lifestyle” companies with revenue in excess of €100 million. BSMB was advised on the deal by law firm Kirkland & Ellis LLP, while Opera was advised by investment bank Sonenshine Pastor and law firm Gibson, Dunn & Crutcher LLP. www.opera-privatequity.lu

Cisco Systems Inc. (Nasdaq: CSCO) has agreed to acquire the intellectual property, a majority of the engineering team and other select assets of Procket Networks Inc., a Milipitas, Calif.-based provider of concurrent service routers. The deal is valued $89 million in cash, and is expected to close in the first quarter of Cisco’s 2005 fiscal year. Procket had raised $272 million in total VC funding since its 1999 inception, from investors like Fidelity Ventures, Institutional Venture Partners, Raza Foundries, New Enterprise Associates and U.S. Venture Partners. www.procket.com

Alaska Gov. Frank Murkowski yesterday signed a bill that increases the amount of money that the Alaska Permanent Fund can invest in alternative assets (VC, private equity hedge funds, etc.). The original allocation was 5% of total assets, but that now has been bumped up to 10 percent.

  

The European Commission has approved a buyout of Netherlands-based retailer Vendex KBB NV Royal by Kohlberg, Kravis Roberts & Co., AlpInvest Partners and Change Capital Partners.

American Capital Strategies has invested $71 million into the acquisition of Life-Like Products LLC from ZS Fund LP. Life-Like is a Maryland-based manufacturer of expanded polystyrene foam products. It also makes model trains, train sets and hobby racecars. The $71 million investment included senior term notes, senior subordinated debt, junior subordinated debt with warrants and common and redeemable preferred equity. American Capital now owns approximately 80% of Life-Like on a fully-diluted basis. www.lifelikeproducts.com

Sumitomo Corp. has agreed to acquire Secaucus, N.J.-based pet supply company Hartz Mountain Corp., according to published reports. The deal is reported to be valued at $365 million, with the primary seller being buyout firm J.W. Childs Associates, which acquired Hartz Mountain in 2000 for approximately $290 million.

www.hartz.com

Blackboard Inc. (Nasdaq: BBBB), a Washington, DC-based provider of software to the education industry, priced 5.5 million shares of common stock at $14 per share (middle of its $13-$15 offering range), for a total IPO take of approximately $71.5 million. The company had raised over $100 million in VC funding since its 1997 inception, with significant shareholders including Oak Hill Capital Partners, Internet Capital Group, Carlyle Group and Microsoft Corp. www.blackboard.com

KongZhong Corp., a Beijing, China-based provider of wireless interactive entertainment, has set its IPO offering price range to $10-$12 per American Depository Share, and its total number of offered shares to eight million. Significant shareholders include Draper Fisher Jurvetson ePlanet Ventures, Calver Investments and eGarden Ventures. www.kongzhong.com

Senomyx Inc., a La Jolla, Calif.-based biotech company that develops flavors and flavor enhancers for the packaged food and beverage industry, has decreased its IPO offering price range from $13-$15 per share, to $7-$8 per share. This is the company’s second stab at an IPO, as it previously filed – and withdrew that filing – in 2001. Senomyx  has raised over $70 million in VC funding since its 1998 inception, from investors like Bay City Capital, Rho Ventures, Merrill Lynch Ventures, Prospect Venture Partners, Domain Associates and Kingsbury Associates. www.senomyx.com

InfoSonics Corp. (AMEX: IFO) priced a $12 million IPO yesterday, while Radiation Therapy Services Inc. (Nasdaq: RTSX) priced a $71.5 million IPO. Neither company lists any VC of private equity firms as significant shareholders.

 

H.I.G. Capital has held a first, and final, $500 million close on a new fund dedicated exclusively to distressed transactions. The firm’s newly formed affiliate, Bayside Capital, will manage the vehicle, named Bayside Opportunity Fund. www.higcapital.com

Triangle Venture Capital Group, a St. Leon-Rot, Germany-based, has held a €15 million first close on its fourth fund. It is being marketed with a target size of €50 million to €75 million by London-based placement agent Acanthus Advisors. www.triangle-venture.com

 

Dr. Bert S.J.. van Toor has joined Global Life Science Ventures as an investment manager in Zug, Switzerland. Since 2001, he has worked for Bayer AG in global project management, clinical development and as the company’s interim medical director for Belgium, the Netherlands and Luxembourg. www.life-science-ventures.de

Michael McKenna has been named CEO of Merrion Pharmaceuticals Inc., a Wilmington, N.C.-based oral drug startup. McKenna most recently served as vice president of science and technology with VC firm A.M. Pappas & Associates.

AEG Partners, a Chicago-based consultancy for distressed middle-market companies, has added John Otterberg, as a senior director. He previously served as a director with FTI Consulting Inc. AEG also promoted Kevin Angeles to the position of senior director, after having joined as a director in January 2003. www.aegpartners.com

 

 News from Thursday 6/17

 

ChemoCentryx Inc., a San Carlos, Calif.-based developer of medicines for autoimmune diseases, inflammatory disorders, cancer and infectious disease, has raised $33 million in Series B funding. New investors HBM BioVentures and Alta Partners were joined on the deal by return backers Techne Corp., OrbiMed Advisors, HealthCap and Pictet. www.ChemoCentryx.com

Lexington Partners is raising a $500 million fund that will acquire secondary LP interests in young, middle-market buyout funds. It already has received a $150 million cornerstone commitment from the New York State Teachers’ Retirement System. A final close is expected by year-end. PE Week subscribers can read more on this exclusive story in Monday’s print edition, or tomorrow at www.PrivateEquityWeek.com

Metabasis Therapeutics Inc. (Nasdaq: MBRX) and Leadis Technology Corp. (Nasdaq: LDIS) each closed down after their first day of trading on the public markets. Metabasis closed at $6.66 per share, after having priced its IPO at $7 per share. Leadis closed at $13.10 per share, after pricing its IPO at $14 per share.

 

 

Sadra Medical, a Saratoga, Calif.-based life sciences company focused on new therapies for aortic valve disease, has raised $9 million in Series A funding. New investor Pequot Ventures joined seed backers Onset Ventures and Schroder Ventures on the deal. www.sadramedical.com

 

Oraxion Diagnostics, a Pasadena, Calif.-based provider of metrology solutions for the semiconductor industry, has raised $8 million in Series B funding. Mohr, Davidow Ventures led the round, and was joined by Idealab. As part of the deal – which actually closed in January — Rob Chaplisky of MDV joined the Oraxion Diagnostics board of directors. www.oraxion.com
  

Lime Rock Partners and SGAM/4D Global Energy Development Capital Fund have teamed up to purchase Serimer DASA from parent company Stolt Offshore SA (Nasdaq: SOSA). The deal is valued at €33 million. Serimer is a Mitry Mory, France-based provider of automatic welding services for onshore and offshore pipelines. It is a whole-owned affiliate of Stolt, and has U.S. offices in Houston, Texas.

Citigroup Venture Capital Equity Partners has agreed to acquire Arizant Inc. (f.k.a. Augustine Medical), a Minneapolis-based medical device company. No deal terms have been disclosed. J.P. Morgan advised Arizant on the deal. www.arizant.com

 

Mezzanine Management Ltd. has provided £9.5 million of mezzanine debt to support the management buyout and privatization of Integrated Dental Holdings PLC, a UK-based dental chain.

 

VitalStream Holdings Inc. (OTC BB: VSTH) has closed a PIPE financing agreement worth $11 million. Under terms of the agreement, VitalStream will issue approximately $17.9 million shares of common stock, plus warrants to purchase another 5.4 million common shares. WaldenVC led the deal, with Phil Sanderson of WaldenVC joining the VitalStream board of directors on June 30. Other investors included Dolphin Equity Partners, Newlight Associates, Stephens Investment Management and the RS Orphan Fund. ThinkEquity Partners served as exclusive placement agent. www.vitalstream.com

 

Appian Ventures, a Denver, Colo.-based VC firm focused on software and technology companies located in the Western U.S., has closed its inaugural fund with $80 million in limited partner commitments. Quest Capital is the SBIC fund’s cornerstone sponsor, while additional limited partners include Wells Fargo, Key Bank and Silicon Valley Bank. The firm is particularly interested in the application and management of network connectivity to improve business performance. www.appianvc.com

 

Andrew Gaines has joined the New York law office of Weil, Gotshal & Manges LLP, where he will advise clients on issues involving international tax and private equity. He previously served as a partner with Akin Gump Strauss Hauer & Feld LLP. www.weil.com

Mars Equities Inc. has acquired Kitchen Distributors of America Inc., a provider of kitchen and bathroom products with showrooms in both Chicago and Philadelphia. No deal terms were disclosed. Desner Investment Services advised KDA on the transaction.

Ceclilia Claudio has joined Clearstone Venture Partners as an executive-in-residence. She most recently served as executive vice president and CIO of Zurich Financial Services and, before that, in similar roles with ANTHEM Inc. www.clearstone.com

David Chamberlain has joined Palomar Capital Advisors as a managing director. He most recently ran the private equity group of investment management Unigestion. At Palomar, Chamberlin will lead a new secondary private equity practice. www.palomarpartners.com

Charlie Johnstone has joined ECI Partners, a UK-based middle-market buyout specialist, as a business development manager. He had spent the past seven years with Ernst & Young in London, the final year of which was spent in the corporate restructuring group. www.ecipartners.com

 

    News from Wednesday 6/16

 

United Industries Corp. (a.k.a. Spectrum Brands), an add-on platform of Thomas H. Lee Partners, has agreed to acquire United Pet Group Inc., a Cincinnati-based provider of branded pet supplies. The deal is valued at $360 million, with sellers including TA Associates, Friend Skoler & Co. and company management. It is United Industries’ fifth acquisition in the past three years. www.spectrumbrands.com

RiskMetrics Group, a New York-based provider of financial risk management services, has received $122 million in recapitalization funding from Spectrum Equity Investors, General Atlantic Partners and Technology Crossover Ventures. RiskMetrics became independent in September 1998, when it spun out of J.P. Morgan. www.riskmetrics.com

INFONXX Inc., a Bethlehem, Pa.-based provider of directory assistance and enhanced information services, has received a $44 million investment from Technology Crossover Ventures. As part of the transaction, TCV purchased certain previously issued shares. www.infonxx.com

 

Tarari Inc., a San Diego-based provider of content processing hardware and software for network security, has raised $13.8 million in Series B funding. Morgan Stanley Venture Partners led the deal, and was joined by return backers Crosspoint Venture Partners, Intel Capital, Miramar Venture Partners and XML Fund. As part of the deal, Kristen Hughes of Morgan Stanley and Rick Fink of Miramar have joined the Tarari board of directors.  www.tarari.com

Arkadin SA, a Paris, France-based provider of audio and data conferencing services, has raised 6.6 million in second round VC funding. Apax Partners led the deal with a 4 million commitment, and was joined by individual investors. www.arkadin.com

Scene7 Inc., a Novato, Calif.-based provider of a rich media platform, has raised $7.5 million in Series C funding. QVC, a majority-owned subsidiary of Liberty Media Corp. (NYSE: L), led the deal. Return backers included Moore Capital, Halpern Denny & Co., Xcelera Inc. and David Rubenstein of The Carlyle Group. www.scene7.com

Finjan Software Ltd., a San Jose, Calif.-based provider of content security and management solutions, has raised $10 million in new VC funding. Cisco Systems Inc. (CSCO) led the deal, and was joined by return backers Benchmark Capital, Bessemer Venture Partners and Israel Seed Partners. The company has raised around $35 million in total VC funding since its 1996 inception. www.finjan.com

WellDog Inc., a Laramie, Wyo.-based developer of natural gas exploration technology, has raised $1.5 million in Series B funding from Prospector Equity Capital. www.welldoginc.com

 

Napatech AS, a Denmark-based provider of Ethernet network interface cards, has raised 2.1 million in VC funding from Northzone Ventures and DTU Innovation. www.napatech.com

 

Unveil Technologies Inc., a Waltham, Mass.-based provider of voice recognition applications for contact enters, has raised $6.5 million in new VC funding. Return backers include Sevin Rosen Funds, TD Capital and Solstice Capital. www.unveil.com

 

Capital C Energy LLC, an investment platform formed in 2002 by Carlyle/Riverstone Global Energy & Power Fund, has agreed to acquire Belden & Blake Corp., a North Canton, Ohio-based oil and gas exploration company. The all-cash deal is expected to close by the end of June, at which point Belden & Blake will become a wholly-owned subsidiary of Capital C. No financial terms of the acquisition were disclosed. www.beldenblake.com

The Riverside Co.has acquired Amplas Inc., a Green Bay, Wisc.-based designer and manufacturer of plastic bag and pouch machinery. The company will be added on to Riverside’s Hudson-Sharp platform. No deal terms were disclosed. www.amplas.com

The Riverside Co. has acquired Sport Court Inc., a Salt Lake City-based provider of performance sports and backyard recreation flooring. No deal terms were disclosed. www.sportcourt.com

C-COR.net Corp. (Nasdaq: CCBL) has agreed to acquire Stargus Inc., an Andover, Mass.-based provider of network and service management solutions, for approximately $17 million in cash. Stargus has raised around $13.5 million in total VC funding since its 2000 inception, including a $10.1 million deal in 2001 at a post-money valuation of approximately $23.8 million. Company investors include Castile Ventures, ADC Telecommunications Inc., Lauder Investments Inc., Pilot House Ventures, Still River Fund and YAS Broadband Ventures. www.stargus.com

Silicon Graphics Inc. (NYSE: SGI) has completed its $57.5 million sale of Alias Systems Corp. to Accel-KKR, the Ontario Teachers’ Pension Plan and Alias management. Alias is a Toronto-based provider of 3D graphics technology.  www.alias.com

 

Metabasis Therapeutics Inc., a San Diego-based biotech company focused on the treatment of liver and liver-related metabolic diseases, will begin trading on the Nasdaq under ticker symbol MBRX. The company priced five million shares at $7 per share (below its original $11-$13 offering range, and low end of its revised range), for a total IPO take of $35 million. The company has raised around $65 million in venture capital funding from firms like MPM Capital, InterWest Partners, Sprout Group, Maverick Capital, Wellcome Trust, Itochu Corp. and Pan-Pacific Venture Capital. www.mbasis.com

Leadis Technology Corp., a Sunnyvale, Calif.-based provider of mixed-signal semiconductors, will begin trading on the Nasdaq under ticker symbol LDIS. The company priced six million shares at $14 per share (high end of its $12-$14 offering range), for a total IPO take of $84 million. The company has raised nearly $16 million in VC funding, with significant shareholders including U.S. Venture Partners and Walden International. www.leadis.com

Xenogen Corp., an Alameda, Calif.-based developer of biochemical reporters that tag genes, cells and microorganisms to monitor biological events, has set its IPO offering price range to $9-$11 per common share, and its number of offered shares to 4.5 million. The company has raised over $100 million in VC funding since its inception, including a $25 million infusion in 2001 at a post-money valuation of around $130 million, and a Series AA recap round in early 2003. Significant shareholders include Abingworth Management, Hardvard Private Capital, MDS, Brentwood Associates, EuclidSR Partners and S.R. One Ltd. www.xenogen.com

PRN Corp., a San Francisco-based operator of an in-store television network, has set its IPO offering price range to $14.50-$16.50 per common share, and its total number of offered shares to seven million. Significant shareholders include the Shamrock Capital Growth Fund, Moore Macro Fund, GE Capital, Allen & Co. and the State of Michigan. www.prn.com

GFI Group Inc., New York-based inter-dealer broker specializing in over-the-counter derivatives, has filed to raise $100 million via an IPO of common stock on the Nasdaq under proposed ticker symbol GFIG. Significant shareholders include Advent International, Jersey Partners and Venturion Capital. www.gfigroup.com

Borden Chemical Inc., a Columbus, Ohio-based maker of resins, adhesives and binders for the global forest products and industrial markets, has changed its proposed ticker symbol on the NYSE from BCI to BCX. Kohlberg Kravis Roberts & Co. acquired Borden Chemical in 1995. The company is privately-held, but has issued publicly-traded bonds, and therefore has filed certain financial reports with the SEC. www.bordenchemical.com

Interline Brands Inc., a Jacksonville, Fla.-based provider of specialty maintenance, repair and operations products, has filed to raise $230 million via an IPO of common stock on the NYSE under proposed ticker symbol IBI. Significant shareholders include Parthenon Capital, JPMorgan Partners and Sterling Investment Partners.  www.interlinebrands.com

 

Jim Smith has been promoted to the position of general partner with Mohr, Davidow Ventures. He has been with the firm for over five years, most recently as a principal focused on communications and computing infrastructure investments. www.mdv.com

Charles Hughes has joined Easton Capital Investment Group as a managing director. He most recently served as a senior partner with law firm Torys LLP. In other firm news, Easton Capital has added Seth Orlow as a venture partner. Orlow had previously served on the firm’s scientific advisory board, and is a professor of cell biology, dermatology and pediatrics at the NYU School of Medicine. He will be replaced on Easton Capital’s scientific advisory board by Roman Perez-Soler, chairman of oncology at Montefiore Medical Center.

Joel Liffman, an investment partner with Oracle Strategic Partners, has joined the board of Pharmaca Integrative Pharmacy Inc., a Boulder, Colo.-based pharmacy operator.

Dixon Walker and Leon Ellin have joined Greenwich, Conn.-based private equity firm Littlejohn & Co. as consulting partners. Walker spent 28 years in various executive positions with Johns Manville Corp., while Ellin is a serial CFO of such companies as Allied Office Products, Wilton Industries, ITCO Tire Co. and Edward Don & Co. www.littlejohnllc.com

Daniel Cole, a general partner of Spray Venture Partners, has been named chairman of Closure Medical Corp., a Raleigh, N.C.-based medical device maker. www.closuremed.com

David Moore, chairman of Sonostar Ventures, has been elected to the board of directors at MarketWatch.com Inc. (Nasdaq:MKTW).

 

    News from Tuesday 6/15

 

Somaxon Pharmaceuticals Inc., a San Diego-based drug company focused on neuropsychiatric disorders, has raised $23 million in Series B funding. Domain Partners led the deal, and was joined by fellow return backers Windamere Venture Partners and Fog City Fund. New investors included BA Venture Partners, Montreux Equity Partners and CDIB Bioscience Ventures. www.somaxon.com

 

Shasta Ventures formally announced its formation yesterday. The San Francisco-based firm will be run by managing directors Rob Coneybeer, a former general partner with New Enterprise Associates, Tod Francis, a former general partner with Trinity Ventures and Ravi Mohan, a former general partner with Battery Ventures. The new firm will make early-stage investments in software, infrastructure and technology-enabled service companies targeting the business and consumer markets. www.shastaventures.com

 

Brockway Moran & Partners Inc. has agreed to sell Gold’s Gym International Inc. to an investor group led by TRT Holdings Inc., whose assets include the Omni Hotel chain. The deal is expected to close by late July, although no specific terms were disclosed. UBS Securities and Harris Williams & Co. advised Gold’s Gym. Brockway Moran originally acquired Gold’s Gym in 1999 from an undisclosed amount.

 

Baidu.com Inc., a Beijing-based Internet search engine for mainland China, has received an undisclosed amount of strategic VC funding. Google Inc. and Draper Fisher Jurvetson ePlanet co-led the deal, and were joined by fellow new investors Bridger Management, China Equity, China Value and Venture TDF. Return backers included Integrity Partners and Peninsula Capital. www.baidu.com

 

Aria Biosystems Corp., a Menlo Park, Calif.-based provider of tools for the detection and analysis of biomolecules and their interactions, has raised $5.5 million in first-round funding. Alloy Ventures and Latterell Venture Partners co-led the deal, and were joined by Agilent Ventures and Versant Ventures.