Get The Wire in your inbox each morning! Just send us an email.
The sky is gray, a gallon of gas is almost worth more than the un-trusty
Lots of emails this week concerned Tuesday’s column, which eviscerated the Wall Street Journal editorial board for what I believed was an unfair and poorly-reasoned attack on CalPERS. J was typical of reader reaction, which mostly suggested that the paper had politics, not pensioners, on its mind. He writes: “I think your comments are right on. The lack of vintage disclosure or J-curve discussion was totally irresponsible, and strange for such a sophisticated publication. Cronyism may exist, but it is a far stretch to apply it only to Democrats. I would be curious to know the percentage of Republican GPs enjoying CalPERS’s asset allocation largesse. The whole thing felt a bit smarmy to me. Chalk it up to the political season, I guess.”
Andy adds: “This goes to show how editorial boards and editorial staffs often don’t talk at major newspapers. The WSJ has some very good reporters covering the venture capital industry, but it is clear that the editorial board doesn’t have any clue about how the market works. Its dismissal of the J-curve argument was beyond laughable. It was embarrassing.” Then there was Dan: “Shouldn’t you have to prove political cronyism before accusing someone of it? I guess the WSJ doesn’t think so.”
Finally there was F: “While I agree the use of returns as a point for argument was problematic, and certainly wouldn’t dream of making a claim that opinions published by an openly conservative editorial board aren’t politically motivated, I still don’t think the issue of returns is as important in this case as the decision process underlying certain allocations. It should be enough to raise some eyebrows that the fund has chosen to allocate to managers with the habit of donating to the political campaigns of the fund’s board members, returns be damned. I understand the issue is more complex than this, but given that the fund exists to serve out the promises made to its claimants, it would seem only proper that they have the ability to gauge whether or not their future earnings are being used to promote a political agenda that might not be to their own liking. Why then pick on CalPERS? The fact that CalPERS has adopted such an overt reform agenda as part of its investment strategy makes it THE target for groups or individuals who think such organizations should stick to trying to earn a good risk-adjusted rate of return. There the Journal would certainly qualify. That CalPERS is having to be dragged kicking and screaming toward increased transparency smacks of just a little hypocrisy.”
It is worth noting that the vast majority of emails this week concerned baseball. Specifically, questions on why my gloating seemed so subdued yesterday. The truth is that I’m simply too happy to rub it in. I didn’t think this would be true, but my joy has come almost exclusively from watching the red sox win, rather than from watching the Yankees lose. Also, it’s worth noting that my unpublished prediction of a Sox-Astros World Series will not happen. Too bad, because I thought
Finally, tomorrow is the annual City Year Serve-A-Thon in
Francisco Partners, a San Francisco-based buyout firm focused on the technology market, has agreed to acquire G International, a business established to own and operate IBM‘s electronic data interchange and business exchange services units. No financial terms were disclosed. As part of the deal, Gary Greenfield, an operating partner with Francisco and president and CEO of Francisco portfolio company Global eXchange Services Inc. (GXS), will serve as CEO of G International. Francisco plans to merge GXS and G International within the next six months. www.franciscopartners.com
Australian Pharmaceutical Industries Ltd. has acquired New Price Retail, an Australia-based retailer of health and beauty aids, for approximately Aus $167 million (US $123 million). The seller was an investor consortium that included ABN AMRO Capital, Investec Wentworth Private Equity, company management and CHAMP, the Australian affiliate of New York-based buyout firm Castle Harlan.
Cisco Systems Inc. (Nasdaq: CSCO) has agreed to acquire Perfigo Inc., a San Francisco-based provider of packaged network access control solutions for endpoint policy analysis, compliance and access enforcement capabilities. The deal is valued at $74 million in cash, and is expected to close by
Paratek Microwave Inc., a Columbia, Md.-based provider of smart scanning antennas and miniaturized tunable radio frequency front-ends, has signed a strategic investment and development agreement with In-Q-Tel, the venture capital arm of the central Intelligence agency (CIA). No financial terms were disclosed, although the company previously had raised nearly $80 million from VC firms like Polaris Venture Partners, Novak Biddle Venture Partners, Morgenthaler, Investor AB and ABS Ventures. www.paratek.com
AP-Aqua, a Hungary-based bottled water deliver company, has received Euro 1.5 million in venture capital funding from Euroventures.
Network Inference Inc., a Carlsbad, Calif.-based provider of adaptive software infrastructure, announced that it had raised $8.1 million in Series B funding during Q1 2004. Palomar Ventures and Nokia Venture Partners co-led the deal. www.networkinference.com
Visual Sciences LLC, a McLean, Va.-based provider of real-time visual analysis software, has signed a strategic investment and licensing agreement with In-Q-Tel, the venture capital arm of the central Intelligence agency (CIA). No financial terms were disclosed. www.visualsciences.com
EKO Systems Inc., a Fairfax, Va.-based provider of software and hardware systems for the healthcare industry, has raised $5 million in Series B funding from Kaupthing Bank, through Uppspretta Icelandic Capital Venture SA. www.ekosystems.com
U.S. Xpress Enterprises Inc. (Nasdaq: XPRSA) has agreed to sponsor a management buyout of Arnold Transportation Services Inc. from Jefferies Capital Partners. U.S. Xpress would make a $6.4 million equity investment, alongside an undisclosed amount of senior debt financing. Current
ABN AMRO has sponsored a management buyout of France-based outsourced restaurant chain Score Groupe. The MBO is valued at Euro 100 million, with ABN AMRO receiving a 52% ownership position. www.groupe-score.com
Merchants Capital Partners has sold telecom portfolio company NewTel Holdings LLC to Orion Telecommunications Ltd., a publicly-held telecom company in
Energy Investors Funds has acquired a 12.5% general partner interest in MassPower from El Paso Corp. (NYSE: EP). MassPower is a 270 megawatt gas-fire cogeneration plant located in
NTL Inc. (Nasdaq: NTLI) has narrowed the auction for its broadcasting business, according to Dow Jones. Remaining bidders reportedly include the tandem of BC Partners and Cinven Group, plus Macquarie Communications Infrastructure Group, Apax Partners, Providence Equity Partners and Blackstone Group.
Thomas H. Lee Partners plans to sell portfolio company Eye Care Centers of America Inc. for approximately $350 million, according to The Deal. TH Lee did not comment for the story. www.ecca.com
TeamSystem SPA, an Italy-based provider of accounting, tax and payroll management software, reportedly plans to float an IPO on the Milan Stock Exchange. The company is controlled by UK-based private equity firm Palamon Capital Partners.
WiderThan.com Co. Ltd., a
C-Cor Inc. (Nasdaq: CCBL) has agreed to acquire nCube Corp., a Beaverton, Ore.-based provider of on-demand media and digital advertising systems. The deal is valued at $89.9 million, including 4.5 million shares of C-Cube common stock, $20 million in cash, the assumption of certain liabilities and $35 million of senior unsecured convertible notes. NCube counted Oracle Corp. and Tako Ventures among its shareholders. www.ncube.com
Carl Zeiss Meitec Inc. has agreed to acquire Laser Diagnostic Technologies Inc., a San Diego-based medical device company focused on glaucoma detection. No financial terms have been disclosed for the deal, which is expected to close within 45 days. Laser Diagnostic has raised over $13 million in VC funding from firms like Sigma Partners, GC&H Partners, Newtek Ventures, Sorrento Ventures and Vector Fund Management. www.laserdiagnostic.com
MEMSCAP (Euronext: MEN) has agreed to acquire Optogone, UK-based company focused on optical components integration for DWDM networks, for Euro 3.8 million worth of MEMSCAP stock. Optogone had been spun out of France-based ENST, with the backing of France Telecom, Spef Ventures and T-Souce. www.optogone.com
The Mobile Media Company AS, an
Kurt Vedder has been named director of strategic business development and research with De Novo Ventures, where he will be responsible for identifying emerging trends in the medical device sector and supporting existing portfolio companies. He previously has held management positions with companies like Guidant Corp. and Medtronic. www.denovovc.com
Joe Hayashi and Jason Wisniewski have joined the
Edith Aviles has joined BNP Paribas as a managing director in the firm’s leveraged finance group. She previously was responsible for origination and execution of private equity placements and corporate finance advisory services with D.F. Hadley & Co. www.bnpparibas.com
NewSpring Capital has held a $40 million first close on its inaugural mezzanine fund. The vehicle is being marketed with a $100 million target capitalization, and is expected to conclude fundraising in the middle of next year. www.newspringventures.com
Thursday, October 21
Boston-Run Venture Capital?
It has been a long time since this space has tackled the notion of state, or city, government-managed venture capital investing into local companies. I don’t recall exactly why it even came up last time, but do remember that it culminated in my appearance in
It is important to note that I maintained a general caveat to this general position: It does not apply to programs in geographically underserved markets.
All of this brings me to October 2004, and a Boston Globe report that City of
This clearly does not fall into my caveat, as
startup companies. Instead, they’ve moved up the investment ladder, often making their first investment at the Series B round, or in a Series A round for a two-year old company that had to scavenge for seed funding elsewhere. In other words, I had begun to think that my original paradigm had lost some of its validity.
But then I kept reading the article, written by Ross Kerber. In it, Maloney insinuates that
I’m softening on this issue, but the
Finally, thank you to everyone I met at the Buyouts Symposium West these past two days. It was a good time had by all, particularly the unscheduled baseball watching during cocktail hours. Now it is time for me to get some rest, as I stayed up well past my bedtime watching ESPN, Fox and anything else that showed the ecstatic faces of Bostonians everywhere. Congrats to all the Sox fans who have consistently written me over the past two years, and my insincere condolences to Yankees fans. On to the World “bleeping” Series!
The Blackstone Group has agreed to acquire Boca Resorts Inc. (NYSE: RST), a Boca Raton, Fla.-based owner and operator of luxury resorts in
Pentadyne Power Corp., a Chatsworth, Calif.-based provider of flywheel power systems, has held an $8 million first close on its Series C funding round, with an eye toward an additional $12 million. Investors included Nth Power, DTE Energy Ventures, Accera Venture Partners and Sempra Energy. www.pentadyne.com
Tom Hicks is accelerating his departure from buyout firm Hicks, Muse,Tate & Furst, from March 2005 to year-end 2004.
Clinical MicroArrays Inc., a Natick, Mass.-based developer of tools for use in drug development and clinical diagnostics, has raised $7.5 million in Series A funding. Oxford Bioscience Partners led the deal, and was joined by Rock Maple Ventures, Fletcher Spaght Venture Partners and individual investors. www.clinicalmicroarrays.com
BioXell SPA, an Italy-based drug company focused on urological and chronic inflammatory diseases, has raised Euro 23 million in new venture capital funding. BB Biotech led the deal, and was joined by fellow new investors NIF Ventures and QVentures. Return backers included MPM Capital, Index Ventures, AlpInvest Partners, Life Science Partners and Investimenti Piccole Imprese. The company now has raised Euro 63 million in total VC funding since being spun out of Roche three years ago. www.bioxell.com
Intelsat Ltd., a Bermuda-based satellite company, has received shareholder approval for its acquisition by Apax Partners, Apollo Management, Madison Dearborn Partners and Permira (collectively known as Zeus Holdings Ltd.). The deal is valued at approximately $5 million, including $3 billion in cash, or $18.75 per ordinary share, and the assumption of around $2 million in Intelsat debt. www.intelsat.com
3i Group has agreed to acquire a 75% stake in Denmark-based Danfoss Marine Systems from Danfoss AS, according to Dow Jones. www.3i.com
Hg Capital has agreed to acquire a 46% position in Dutch mail order pharmacy DocMorris. The deal is expected to close next month, and no financial details have been disclosed. www.docmorris.com
Daewoo Group is taking bids for a defense and engineering unit named Daewoo Heavy, but Reuters is reporting that Daewoo is unlikely to reward non-Korea-based investors like The Carlyle Group. The deal could be valued at upwards of $1.3 billion. www.daewoo.com
ComVentures has acquired 19.8% of outstanding common shares of Axesstel Inc. (AMEX: AFT), a San Diego-based provider of CDMA-based fixed wireless voice and data products. The firm – via three separate funds – purchased an aggregate of 833,334 outstanding common shares for $3 million, plus an additional 1.2 million common shares from existing shareholders for an undisclosed amount. www.axesstel.co.kr
Arpida AG, a Switzerland-based life sciences company focused on anti-infectives, has acquired
MessageOne, an Austin, Texas-based provider of disaster recovery solutions, has agreed to acquire Evergreen Assurance Inc., an Austin, Texas-based provider of fail-over solutions for Microsoft Windows applications. No financial terms were disclosed. MessageOne has raised over $20 million in VC funding from firms like Impact Venture Partners, QuestMark Partners, RRE Ventures and StarVest Partners. Evergreen has raised over $13 million in VC funding from firms like Venrock Associates, Blue Chip Venture Co. and VIMAC Ventures. www.messageone.com www.evergreenassurance.com
Martin Kahn, a venture partner with Rho Ventures, has joined the board of InfoUSA Inc. (Nasdaq: IUSA). www.infousa.com
Genstar Capital, a San Francisco-based private equity firm focused on the middle-markets, has closed its fourth fund with $475 million in limited partner commitments. Investors included: Caisse de depot et placement du Quebec, The Regents of the University of California, Stichting Shell Pensioenfonds, Bregal Investments, Commonfund, Goldman Sachs Private Equity Partners Funds, The California Endowment, Grove Street Advisors for the Oregon Public Employees Retirement Fund, TD Capital, CSFB Customized Fund Investment Group, Association de Bienfaisance et de Retraite des Policiers de la Communaute Urbaine de Montreal, LGT Capital Invest Limited, The Meadows Foundation, Inc., Swiss Re Private Equity Partners, Winterthur US Fund II, J.P. Morgan U.S. Pooled Corporate Finance Funds, Colgate University, Adams Street Partners, Pantheon Ventures, Inc., Wilshire Associates, and AlpInvest Partners. www.gencap.com
Allianz, a Germany-based insurance giant, plans to further reduce its public equity exposure, and increase it private equity focus, according to The Financial Times. Allianz currently has a one percent private equity allocation. www.allianz.com
Berkeley Capital Management has agreed to acquire the Delta Asset Management division of ING Investment Management Co. No financial terms were disclosed. The management group of the combined
EdgeStone Capital Partners of
SJF Ventures, an early-stage firm with offices in
Yellowstone Capital has formed a venture capital fund to invest in early-stage companies in the energy technology sector. Specifically, Yellowstone Energy Ventures will focus on renewable energy and alternative energy opportunities, and is currently trying to solicit between $5 million and $10 million in limited partner commitments. www.yellowstonecapital.com
Wednesday, October 20
l apologies for today’s lack of sustantive column – particularly considering some FASB decisions of interest yesterday – but the last night’s combination of baseball, booze and Buyouts Symposium West caused me to get to sleep much later than anticipated. This, in turn, caused me to wake up far later than anticipated (and with the time difference and all.). Anyway, this space will be filled tomorrow with talk of accounting regulations and a prospective city-run venture capital program in