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Some random ramblings before I retire to my wobbly leather chair for some baseball, followed by more baseball and a bit of presidential debating (J: apologies in advance for a lousy Friday night):
(1) Not much news announced today, so let me be the bearer. Elevation Partners expects to hold a major institutional close on its inaugural fund by month’s end. For those who don’t remember, this is the new media-focused buyout shop launched by Roger McNamee (co-founder of Integral Capital Partners and Silver Lake Capital) and John Riccitiello (former EA Sports chief). It also includes Fred Anderson (former Apple Computer CFO), Mark Bodnick (founding principal of
For more, go to
(2) Disappointing job numbers this morning, as the
(3) Apprentice update: VC Ivana remains, while Blazent co-founder Pamela is fired.
(4) Email continues to come in on the
(5) Publishing note: No PE Week Wire on Monday, in observance of the day when someone discovered something that other people already had discovered.
(6) Personal note: I probably should just go to CraigsList, but does anyone know of a pinball machine repairman in the Greater Boston area. My father just gave me his Bally-made Bobby Orr machine, but it seems to have gotten messed up on the move.
B&G Foods Holding Corp., a Parsippany, N.J.-based provider of shelf-stable food products, will begin trading on the AMEX under ticker symbol BGF. The company priced 17.39 million Enhanced Income Securities (EIS) at $15 per EIS (middle of its $14.50-$15.50 range), for a total IPO take of approximately $261 million. The company was owned by private equity firms Bruckman, Rosser, Sherrill & Co., Canterbury Capital Partners and ProtoStar. www.bgfoods.com
BioNumerik Pharmaceuticals Inc., a San Antonio, Texas-based drug company focused on cancer therapies and the prevention of side effects for existing cancer therapies, has entered into a strategic marketing partnership with Takeda Pharmaceutical Co. Ltd. As part of the deal, NioNumerik will receive a $52 million equity investment from Takeda. BioNumerik currently is in registration for an $86.25 million IPO, and has raised VC funding from investors like Woodside Fund, Access Venture Partners, Delta Capital Management, SBC Communications Inc., Southwest Venture Partnerships and Grelan Pharmaceutical Co. Ltd. www.bionumerik.com
Henkel Corp., a
The Thomson Corp. (NYSE: TOC) has agreed to sell its Thomson Media unit to Investcorp for $350 million in cash. Thomson Media includes such publications as The Bond Buyer, American Banker and Investment Dealers’ Digest. Morgan Stanley advised Thomson on the deal (Note: The PE Week Wire is published by Thomson Financial, a unit of Thomson Corp.). www.thomsonmedia.com
Roper Industries Inc. (NYSE: ROP) has agreed to acquire TransCore Holdings Inc. from an investor group led by KRG Capital Partners. The transaction is valued at approximately $600 million, and is expected to close. TransCore is a Hummelstown, Pa.-based provider of transportation technology services, and was advised by Lehman Brothers. www.transcore.com
ELong Inc., a
Prestige Brands Inc. has purchased all the capital stock of Vetco Inc., a provider of pediatric over-the-counter healthcare products, for approximately $49.3 million. Prestige was launched as a consumer products acquisition platform in 1999 by MidOcean Partners, which later sold it to GTCR Golder-Rauner. It currently is in registration for a $920 million IPO. www.prestigebrands.com
Empire Education Group, a Pottsville, Pa.-based operator of post-secondary cosmetic schools, has raised $16 million in private equity funding from Key Principal Partners. Empire has used the funding, in part, to acquire five new post-secondary cosmetic schools from the Learning Institute of Beauty Sciences. www.empire.edu
TravelCenters of America Inc. has agreed to acquire 11 interstate travel centers from Truck Service Center Inc. (Rip Griffin). No financial terms of the deal were disclosed. TravelCenters of America is majority-owned by Oak Hill Capital Management, which acquired a 60% stake in November 2000 for approximately $750 million. www.tatravelcenters.com
Siegent Inc., a portfolio company of Summit Partners, announced that its eNeighborhoods division has acquired WyldFyre Technologies, a Campbell, Calif.-based provider of software that enables real estate professionals to access and manage MLS data. No financial terms were disclosed. www.wyldfyre.com
Innova Capital, a Warsaw-based private equity advisor, has added Andrzej Bartos as a managing director. He previously served as a director with Allianz Specialized Investments (f.k.a. Dresdner Kleinwort Capital), and before that was an executive vice president at BRE Bank Securities in
Thursday, October 7
The air is crisp,
The vast majority of email over the past few days has concerned my “Letter to Greg” column, which dealt with the Texas Attorney General’s belief that private company information – including valuations and revenue streams – should be publicly disclosed, so long as said companies have received venture capital or private equity from funds that count public Texas institutions among their limited partners. Of these responses, most supported my contention that the AG has fashioned an untenable position of trying to have it both ways. Regular respondent Ryan writes: “Abbott cannot really believe that VCs will still want to take
Jesse adds: “Thank you for speaking out on this, because Abbott could not have thought this through. From an LP perspective (outside of Texas), I’d be concerned about investing in a fund that also had a public LP from Texas, because now all of the portfolio company data on our fund is being disclosed, which probably would hurt returns. I’ve never really cared much before about other LPs in our funds, but this could become a litmus test.”
But, of course, there were dissenters. Ron asks: “You beg the question: Unless we have transparency, isn’t the ‘incredible long-term ROI’ is nothing more than the proverbial pig in a poke?” Only sort of Ron. Public institutions like UTIMCO already are required under
Finally there is law professor Robert, who is a long-time reader but first-time respondent. He writes, in part, “I think it’s true that many funds will shut out TRST/UTIMCO ifAbbott requires disclosure of bottom-line data, but I also know that there are many promising funds that would jump at the chance for anchor tenants like TRST/UTIMCO. Theseother funds lack the cache of a Tier 1 shop, so they have had trouble hitting their LP target commitments, but they are certainly not ‘dregs.’I know because I used to work with quite a few of them. The upside is that even if a few marquis firms reject TX money, others will not — and some of these ‘dregs’ are bound to post decent returns.Further, I’m not sure how many funds that currently have TRST/UTIMCO as LPs will kick them out. On what basis would they do so? Most NDAs permit disclosure ‘pursuant to law’, so I’m not sure what existing funds will be able to do (many of which were formed before the FOIA crisis).So again, it’s not clear to me that the returns of TRST/UTIMCO are going to suffer in the short term–and term is everything in the political world.”
Harris Corp. (NYSE: HRS) has agreed to acquire Encoda Systems Holdings Inc., a broadcast media software and services provider owned by Thomas H. Lee Partners, Blackstone Group and Evercore Capital Partners. The deal is valued at approximately $340 million in cash, and is expected to close early next month. www.encodasystems.com
IntraLase Corp., an Irvine, Calif.-based provider of laser technology for the first step of LASIK vision correction surgery, will begin trading on the Nasdaq under ticker symbol ILSE. The company priced 6.6 million common shares at $13 per share (high end of $11-$13 range), for a total IPO take of approximately $86.3 million. IntraLase had raised over $70 million in total VC funding since its 1997 inception, with significant shareholders including Brentwood Venture Capital Domain Associates, EDF Ventures, InterWest Partners, Meritech Capital Partners and Versant Ventures. www.intralase.com
Six Apart Ltd., a San Mateo, Calif.-based provider of web-blogging software, has raised $10 million in Series B funding from August Capital. As part of the deal, David Marquardt and David Hornick of August Capital have joined the Siox Apart board of directors. www.sixapart.com
Parlano Inc., a Chicago-based provider of instant messaging applications for the enterprise, has raised $4.5 million in Series B funding. Longworth Venture Partners led the deal, and was joined by existing investor Oak Investment Partners. The company was formed last summer, after Oak and Golden Gate Capital acquired the Collaboration assets of Divine Inc. www.parlano.com
Language Weaver Inc., a Los Angeles-based developer of statistical machine translation software, has held a $4 million first close on its Series B funding round. Palisades Capital led the deal, and was joined by return backers Sulpher Creek Ventures and the Athenaeum Fund. www.languageweaver.com
Acuity Pharmaceuticals, a Philadelphia-based provider of ophthalmic drugs, has raised $15 million in Series B funding. Psilos group Managers led the deal, and was joined by fellow new investors Johnson & Johnson Development Corp., Och-Ziff Capital Management Group, Diamond Capital Corp. and Trans-Science Inc. Return backers BioAdvance and Ben Franklin Technology Partners converted promissory notes into the Series B round. www.acuitypharma.com
TFS Technology Inc., a Hendon, Va.-based provider of identity and access management solutions, has raised $5.3 million in . Investors included Northzone Ventures, IT Provider Advisor AB and Eqvitec Partners. www.tfstech..com
Genetix Pharmaceuticals Inc., a Cambridge, Mass.-based developer of hemoglobin gene therapies, has raised $12 million in new venture capital funding. TVM Techno Venture Management led the deal, and was joined by ABN AMRO Capital and Easton-Hunt Capital Partners. www.genetixpharm.com
EADS North America has acquired Racal Instruments Group, an Irvine, Calif.-based provider of electronic test and measurement equipment. The deal is valued at $105 million in cash plus up to $25 million in additional earn-outs, with the sellers being Thomas Weisel Capital Partners and J.F. Lehman & Co. www.racalinst.com
Hauraki Private Equity No. 2, a New Zealand-based private equity fund backed by Goldman Sachs JB Were, has acquired several Australian and New Zealand business units of Tyco International (NYSE: TYC) for approximately Aus$105 million (US$76 million). The companies will be renamed Norfolk Group Holdings.
The Blackstone Group and German investment firm CG Beteiligungs- und Management GmbH are planning a joint offer for the logistics business of struggling German mail order and department store company KarstadtQuelle AG, according to The Financial Times. The paper says that the price tag is estimated to be around Euro 350 million.
BrightStar Corp., a Miami, Fla.-based provider of wireless communications devices, has withdrawn registration papers for a $115 million IPO. The company cited “market conditions and certain other factors.” Significant company shareholders include Falcon Mezzanine Partners, Prudential Capital Partners and Arrow Investment Partners. www.brightstarcorp.com
NGN Capital, a New York-based VC firm focused on the healthcare market, has added Peter Johann as a general partner. Johan previously served as head of corporate development at Boehringer Ingelheim. www.ngncapital.com
Michael McFell has joined the
The Carlyle Group has held a $99.5 million first close on its Carlyle Mezzanine Partners fund, which is targeted at $400 million. www.carlyle.com
Jefferies Group Inc. (NYSE: JEF) and Babson Capital Management have formed a joint venture to offer senior loans to middle-market and growth-stage companies. Named Jefferies Babson Finance LLC, the new effort will be capitalized with $250 million in equity commitments provided equally by Jefferies and Babson parent company Massachusetts Mutual Life Insurance Co. Carl Toriello, former senior vice president and
Boenning & Scattergood, a
Wednesday, October 6
Lots of email – and phone calls – related to yesterday’s column, and a few notes still dribbling in on last week’s discussion of open-source software use at portfolio companies. We’ll get to all of that during tomorrow’s feedback extravaganza, so stragglers still have some time to contribute their two cents. I should be checking email until around , since that probably is when the Red Sox-Angels game will end (why oh why must Bartolo Colon pitch the late game? It takes him nearly a minute to throw each pitch).
In the meantime, let’s shill: First up is the Buyouts Symposium West, which is taking place in just two weeks (October 19-20). We’ve got lots of great panelists, some familiar moderators (myself, Danielle Fugazy, Adam Reinebach, etc.) and an early evening keynote chat from football coaching legend Bill Walsh. Go to www.Buyouts-Symposium.com for more info. Second, thanks to everyone who attended yesterday’s Surviving Auctions forum in
Soros Fund Management reportedly has decided to spin out its private equity unit, as part of a larger reorganization and refocusing on the firm’s core hedge fund business. No specific details have been disclosed, except that the private equity team would continue to manage existing assets. In other firm news, Soros Fund Management has spun out its real estate and credit groups, now renamed Dune Capital Management and Grove Capital. It also said that Jacob Goldfield has resigned from his chief investment officer post of the $8.3 billion Quantum Endowment Fund hedge fund. Finally, two of George Soros’ sons – Robert and Jonathan – have been named co-deputy chairmen of Soros Fund Management, with Robert also taking on the chief investment officer role. www.soros.org
Hynix Semiconductor Inc. of
JotSpot, a Palo Alto, Calif.-based application wiki company, has launched with $5.2 million in Series A funding from Mayfield and Redpoint Ventures. The company was founded by Excite.com founders Joe Kraus and Graham Spencer, and will try to extend wiki technology into the workgroup application realm. www.jotspot.com
Altair Engineering Inc., a Troy, Mich.-based provider of engineering software and computing technologies, has received $30 million in private equity funding from General Atlantic Partners. www.altair.com
ITac Software AG, a Germany-based provider of “traceability” solutions for the discrete manufacturing industry, has raised Euro 4.5 million in third-round venture capital funding. Techno Venture Management led the deal, and was joined by fellow new investor Equinet Venture Partners. Return backer Pari Capital Group also participated. www.itac.de
Critical Mention Inc., a New York-based provider of television search and monitoring services, has raised just over $2 million in Series A funding. Silicon Alley Venture Partners and Stonehenge Capital co-led the deal, and were joined by Meyer Ventures, angel investors like Scott Kurnit (founder of About.com) and seed backer Pennell Venture Partners. www.criticalmention.com
Fox Paine & Co. has acquired a majority interest in VCST Industrial Products NV, a Belgium-based automotive component company. Selling shareholder Navas Investments BV will retain a minority stake in the company, with company management also receiving a slice. No financial terms were disclosed. www.vcst.be
Vestar Capital Partners has agreed to sell Sab Wabco International AB, a Sweden-based maker of railroad brake systems, to a newly-created affiliate of Faiveley SA. The deal is valued at Euro 310 million, which will be financed via Euro 230 million in bank debt underwritten by Societe General and BNP Paribas.
Vestar Capital Partners has agreed to sell its majority position in Sheridan Healthcare Inc. to J.W. Childs Associates and company management. No financial terms were disclosed on the deal, which is expected to close next month. Sheridan Healthcare is a
Thomson Corp. (NYSE: TOC) has received at least five bids for its Thomson Media unit, according to various press reports. Among the contenders are: Wasserstein & Co.; Investcorp; a pairing of CSFB Private Equity, MidOcean Partners and NY Law Journal’s James Finkelstein; Citigroup Venture Capital in partnership with former Avanstar CEO Robert Krakoff; and Apprise Media, a firm run by former Primedia Inc. executive Charles McCurdy. The bids are expected to be in the $250 million to $300 million range, with the auction being run by Morgan Stanley. (Note: The PE Week Wire is published by Thomson Financial, a unit of Thomson Corp.).
Agribusiness Partners International, an Omaha, Neb.-based private equity fund whose general partner is I-bank America First Companies LLC, has sold its controlling stake in FoodMaster International to French dairy Groupe Lactalis. FoodMaster is a dairy company that operates in
Wireless Telecom Group Inc. (AMEX: WTT) has agreed to acquire all outstanding common stock of Willtek Communications GmbH from Investcorp and Willtek CEO Cyrille Damany. The total transaction is valued at $26.2 million, including $7 million in cash and 8 million shares of WTT common stock (valued at $2.40 per share, as of market close yesterday). In addition, WTT will assume certain liabilities and obligations valued at $4.8 million. Willtek is a Germany-based provider of test and measurement solutions to the wireless industry. www.willtek.com
Global Industries Ltd. (Nasdaq: GLBL) has sold its lift-boat division to Hercules Offshore (f.k.a. Mercury Offshore Assets LLC) for approximately $53 million. The deal was funded by existing Hercules investor Lime Rock Partners, and new backer Greenhill Capital Partners.
Captaris Inc. (Nasdaq: CAPA) has agreed to acquire Information Management Research Inc., an Englewood, Colo.-based software company focused on the archiving and records management market. The deal is valued at $26.5 million in cash, and is expected to close later this month. IMR had raised over $13 million in VC funding since its 1992 inception, with investors including GE Equity, BancBoston and International Capital Partners. www.imrgold.com
Vivendi Universal Games has sold its educational software business to Knowledge Holdings Inc., a company formed by Azure Capital Partners and Telesoft Partner. No financial terms were disclosed. Among the titles sold were JumpStart and Mathblaster.
Ares Capital Corp., a business development company (BDC) formed by Ares Management LLC, has begun trading on the Nasdaq under ticker symbol ARCC. The company priced 11 million common shares at $15 per share, for a total IPO take of approximately $165 million. It originally had filed to price 17 million shares at $15 per share.
Akrion Inc., an Allentown, Pa.-based, has filed to raise $50 million via an IPO of common stock on the Nasdaq under proposed ticker symbol AKRI. The company lists Sunrise Capital Partners and Westar Capital Partners as significant shareholders. www.akrion.com
Ulrich Granzer has joined Wellington Partners as a venture partner. He has worked as an independent consultant on drug regulatory matters since 2002, and previously served in management positions with both Glaxo Wellcome and BASF. www.wellington.de
Paul Grinberg has joined Encore Capital Group (Nasdaq: ECPG) as senior vice president of finance. He previously served a president of Bio Consulting Group Inc., which provides financial consulting services to private equity and venture capital-backed businesses. www.encorecapitalgroup.com
William Price, a principal and founder of Texas Pacific Group, has joined the board of directors of IntelliRisk Management Corp., a New York-based provider of solutions for collections, accounts receivable and customer retention services. www.imrc.com
Accel Partners of
ABRY Partners of
Bear Stearns Asset Management has agreed to acquire the fixed income portfolio of TimesSquare Capital Management Inc., a third party management unit CIGNA Corp. (NYSE: CI). No financial terms were disclosed. www.bearstearns.com
Tuesday, October 5
A Dear Greg Letter
Dear Texas Attorney General Greg Abbott,
I have never met you, nor have we ever shared a conversation (although I am available to chat until the first pitch at this afternoon). I have spoken to your surrogates, however, and they tell me that you have changed your position on the public disclosure of underlying asset information from venture capital and private equity funds that have received money from
I hold no grudges against someone changing their mind, as it is not always wise to stay the course. I also don’t have any formal objection to your position in this matter. You believe that public pensioners deserve to know how every dime of their money is being spent, and that only the spotlight of public disclosure can prevent corruption and/or mismanagement among the appointed fiduciaries. Fine. I think it’s a bit paranoid, but fine. Align yourself with the watchdogs.
But please, for goodness sakes man, stop pretending that this move will not negatively affect investment returns at places like TRST and UTIMCO. You said in your speech last Friday that “money management organizations around the globe would be glad to manage [
The current VC and private equity fundraising market is struggling under the weight of too much limited partner capital, not from too many general partners in need of cash. This is the LP overhang about which I’ve written and spoken incessantly. The idea that VC or LBO shops are vying for
Greg, I see three options for your local pensions systems, if your policy receives sanction from the local judiciary: (1) All VC and private equity firms refuse to take your state’s money, thus denying pensioners incredible long-term ROI. (2) Most VC and private equity firms refuse to take your state’s money, thus leaving you with the dregs that couldn’t get funding elsewhere. This scenario also probably includes defections of senior investment staff at places like UTIMCO. Again, lousy returns. (3) Some quality firms stick with
I agree with you that there is no proof that the release of underlying asset info will harm portfolio companies. There are no relevant test cases. The reality, however, is that very few VC or LBO firms I’ve spoken with are willing to take that chance. Some firms that receive
So please take a position Greg. Either support full transparency with the acknowledgement of its likely consequences, or find a new electoral horse to ride.
Doughty Hanson & Co. has agreed to acquire a majority ownership stake in Tumi Inc., a
Kohlberg Kravis Roberts & Co. announced in July that it planned to acquire and/or recapitalize three companies owned by DLJ Merchant Banking Partners, and then combine them into a single specialty publishing and marketing entity. The firm today announced that the $2.2 billion process is complete, with an umbrella company named Jostens Holding Corp. serving as the parent for subsidiaries Jostens Inc. (yearbook and class rings), Von Hoffman Corp. (textbooks) and Arcade Marketing (magazine perfume ads). KKR now holds a 45% interest in Jostens Holdings, while DLJ Merchant Banking also holds 45 percent. Company management owns the 10% remainder.
Triathlon Medical Ventures of
Xelerated, a Concord, Mass.-based provider of network processing solutions, has raised $10 million in new venture capital funding. Return backers included Atlas Venture, Alta Partners and Startupfactory. The company now has raised approximately 460 million in total VC funding since its 2000 inception. In related news, the company named G. Venkatesh, managing partner of Texan Ventures, as chairman of its board of directors. www.xelerated.com
First Hop Ltd., a
Aristos Logic Corp., a Foothill Ranch, Calif.-based provider of RAID storage processing solutions, has raised $12 million in Series D funding. Return backers included JPMorgan Partners, TPG Ventures, Woodside fund and QTV Capital. The company now has raised around $65 million in total VC funding since its 2000 inception, including a $20 million Series C infusion in early 2003 at a post-money valuation of approximately $47 million. www.aristoslogic.com
Globoforce Ltd., a
IQNavigator Inc., a Denver-based provider of services procurement and spend management solutions, has raised $8.7 million in Series E funding. Baker Capital Corp. led the deal, and was joined by return backers The Hillman
Zelos Therapeutics Inc., an Ottawa-based drug developer focused on osteoporosis, has Cdn$7 million in Series A-3 funding. The deal was triggered by a clinical trial milestone of the company’s lead compound. Investors include Seaflower Ventures, VenGrowth Capital Partners and Genesys Capital Partners. In conjunction with the deal, BDC Venture Capital also made an investment. Part of the BDC play was equity in the Series A tranche, while the rest was a convertible note that will turn over into equity once Zelos completes a planned series B funding round. www.zelostherapeutics.com
KXEN Inc., a San Francisco-based provider of analytic software solutions, has received an undisclosed amount of strategic private equity funding from Motorola Ventures. www.kxen.com
Steelwedge Inc., a Pleasanton, Calif.-based provider of enterprise planning and management solutions, has raised $4 million in venture capital funding from Sigma Partners and Globespan Capital Partners. www.steelwedge.com
FdG Associates has invested an undisclosed amount of private equity into California-based produce company River Ranch Fresh Foods LLC. www.riverranchfreshfoods.com