PE Week Wire — Friday, September 17

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Friday Feedback

Rain is headed toward The Bronx, the presidential race is either a dead-heat (Harris, PEW) or a cakewalk (Gallop), and VC Ivana has survived another week on The Apprentice, even though she deserved the boot. In other words, it’s time for some Friday Feedback:

We’ll stick to one topic, which is yesterday’s discussion of real world vs. academic world in regards to LBO multiples. Jeff asks: “I am curious why you say CD&R might be the exception. I assume you hold them in very high regard, or is there another reason?” Nothing to do with my regard Jeff. I exempted CD&R because it is looking to raise $3.5 billion for its new fund, which is basically what it raised last time around. Carlyle, on the other hand, is hoping to raise its ante by over $1 billion.

Andrew writes: “While there are many variables that impact a private equity sponsor’s decision to contribute more equity to get his/her deal done, one thing that sticks out in my mind as being the most critical involvesthe acceptance of significantly lower returns by private equity firms. It is a short list of firms that look for 30% IRR’s in your typical auction deal.I think most firms today — and certainly those paying up for companies with limited growth prospects — are looking for returns in the 20%’s, with many thinking that 20% itself is not a bad outcome. Once a firm gets comfortable with the notion of accepting an 18%-20% equity IRR on the front end of the deal, it is easy to buy into the opportunity to improve that number with some add-on acquisitions, internal value creation or the belief that the debt markets might support a recap (which would allow the equity to take some money out a year or two down the road). However, there is not a lot of room for error.T! hese types of deals should be inherently less risky, but, unfortunately, oftentimes they are not.

Jason adds: “The idea of mega-LBO funds replacing debt with equity just acts as a reminder for why pension funds and other LPs shouldn’t put too many eggs in mega-LBO fund baskets. The risk-reward just isn’t as strong as with the middle-markets, even for some of the new middle-market funds that are springing up.”

A bunch of you sent kudos on the column in general, but Mike wrote in to say that he’s heard it all before: “Value being irrespective of financing is part of the Modigliani-Miller Theorem. Everyone knows it is purely theoretical because some of their underlying assumptions are things like no transaction costs or taxes. Taxes exist in the real world, and so do tax shields from interest expense, and thus value created by using debt as a financing tool. Your comment was neither new nor insightful.”


Itinerary update: On my way to Santa Barbara next week, I’ll be stopping off to speak Wednesday morning at the Thunderbird Private Equity Conference just outside of Phoenix. Hope to see you there, and I promise something both new and insightful.

Email  Dan Primack


Cooper Tire & Rubber Co. (NYSE: CTB) has agreed to sell its Cooper-Standard Automotive unit to The Cypress Group and Goldman Sachs Capital Partners for approximately $1.165 billion. Cooper-Standard Automotive is a manufacturer of engineered components serving the automotive OEM market. Lazard Freres & Co. advised Cooper Tire & Rubber on the deal, which is expected to close by year-end.


Alcatel (NYSE: ALA) has agreed to acquire Spatial Wireless Inc., a Richardson, Texas-based provider of mobile switching solutions. The deal is valued at approximately $250 million worth of Alcatel’s American Depository Shares (ADS), and follows up on a strategic partnership that the two companies originally forged last year. Spatial Wireless has raised around $58 million in total VC funding since its 2001 inception, with shareholders including Austin Ventures, Genesis Campus, Dali, Hook Partners, Qualcomm Ventures, Sequoia Capital and VantagePoint Venture Partners.


Infiniti Solutions Ltd., a Singapore-based provider of semiconductor test and assembly services, has filed to raise over $66.35 million via an IPO of ordinary shares on the Nasdsaq under proposed ticker symbol ISLT. The company hopes to price 5.77 million ordinary shares at between $8 and $10 per share. Infiniti lists both 3i Group and EDB Investments as significant shareholders.


Netsize SA, a Paris, France-based provider of mobile messaging and billing solutions, has raised $7 million in new venture capital funding led by GRP Partners. The company has raised approximately $16 million in total VC funding since its 1998 inception.


Silk Displays Inc., a Quebecbased developer of smart plastic materials, has received Cdn$1 million in VC funding from MSBi Capital.


Churchill Equity Partners has sold its controlling stake in Angus Industries Inc. to company management and the company’s employee stock ownership plan and trust. Goldsmith Agio Helms advised Angus on the management buyout. Angus is a Watertown, S.D.-based provider of mobile equipment components.


Alcatel (NYSE: ALA) has agreed to sell all of its electrical power system assets to private equity firm Ripplewood Holdings LLC. The includes AEG SVS Power Supply Systems, Alcatel Converters, Harmer & Simmons and Saft Power Systems. The business lines employ a combined 1,300 people in 16 countries, and reported 2003 sales of approximately ?220 million. No financial terms were disclosed on the transaction, which is expected to close sometime next quarter.


Endeavor Capital Partners has agreed to acquire bankrupt phone company Supra Telecommunications and Information Systems Inc. for $18 million in equity and $8 million in debt.

General Electric Co. (NYSE: GE). is considering a sale of GE Capital International Services (GECIS), an India-based business process outsourcing operation, according to The Wall Street Journal. The deal could be valued at $1 billion, with Texas Pacific Group among the interested parties.


Alcatel (NYSE: ALA) has acquired eDial Inc., a Waltham, Mass.-based provider of conferencing and collaboration solutions for enterprises and service providers. The deal is valued at approximately $27 million, and was structured as a combination of cash and Alcatel stock. EDial had raised over $35 million in total VC funding since its 1998 inception, including a $25.3 million infusion in 2000 at a post-money valuation of approximately $75 million. Company investors include Greylock, Matrix Partners and Atlas Venture.


Symantec Corp. (Nasdaq: SYMC) has agreed to acquire @stake Inc., a Cambridge, Mass.-based provider of digital security solutions. No financial terms were disclosed on the acquisition, which is expected to close next month. @stake Inc. has raised over $55 million in total VC funding since its 1999 inception, with investors including Battery Ventures and Madison Dearborn Partners.


NStor Techologies Inc. (AMEX: NSO) has agreed to sell tele-management subsidiary Stonehouse Technologies to Symphony Services Corp., a provider of tech-based outsourcing solutions located in Palo Alto, Calif. The deal is valued at approximately $6.7 million, including $5.6 million in cash and $1.1 million in promissory notes. Symphony received $20 million in VC funding last fall from TH Lee Putnam Ventures.


WebSideStory Inc., a San Diego-based provider of Web analytics solutions, has reduced its number of offered IPO shares from 5 million to 4.4 million. It is maintaining its reduced offering price range of $8-$9 per common share (company originally filed for $10-$12 per share). WebSideStory lists both Summit Partners and TA Associates as significant shareholders.


Ares Capital Corp., a business development company formed by Ares Management LLC, has filed an amended IPO registration papers with the SEC. It plans to sell 17 million shares at $15 per share.


David Lowe has joined Memory Pharmaceuticals Corp. (Nasdaq: MEMY) as chief scientific officer, effective October 1. He previously served as an executive vice president and chief scientific officer with Fidelity Biosciences Group, a private equity investment wing of Fidelity Investments. Memory Pharmaceuticals is a Montvale, N.J.-based drug company focused on central nervous system disorders and aging.


Christope Nicolas reportedly has joined UK-based Greenpark Capital as an investment director. He previously worked with Permira.


Jeff Cunningham, former publisher of Fortune Magazine and current chairman of Navigator Holdings LLC, has joined the board of directors at Sapient Corp. (Nasdaq: SAPE).


Jonathan Silverstein, a general partner with OrbiMed Advisors, has joined the board of directors at Avanir Pharmaceuticals (AMEX: AVN).


New York Life Capital Partners is preparing to raise a $600 million co-investment fund, according to Dow Jones. The firm would look for approximately $200 million in outside LP commitments.


  Thursday, September 16


B-School vs The Real World

I never attended business school, but this job regularly requires me to speak with those of you who did. It seems that one of the first lessons you learned – after being informed of the best laundromat – was that companies should be valued independently of how transactions for those companies are financed. For example, you shouldn’t pay 6x EBIDTA for a company during a leveraged buyout, just because some bank is willing to give you 6x EBIDTA on the debt. Maybe there are other reasons – like the company has strong growth prospects and 6x sounds reasonable – but one should have little to do with the other. I know this 6x-to-6x example is a bit oversimplified, but it also would apply to purchase price multiples rising in tandem with debt multiples, even if the latter is lower than the former (5x purchase/3.5x debt vs.6x purchase/4x debt, for example).

The real world, however, rarely seems to square with the academic world. Purchase price and debt multiples have increased in tandem – for the most part – since the start of 2003. I don’t want to get into the specific numbers (check out Monday’s issue of Buyouts for those), but rather to point out a future divergence:

The primary explanation for rising debt multiples is that they had nowhere to go but up, after having been so depressed in 2002. A popular explanation for rising purchase price multiples, on the other hand, is that there is still too much LBO fund capital chasing too few deals. There will come a point, however, in which lenders no longer need to keep climbing the ladder, for they already will have risen from their self-imposed hole. In fact, some folks I spoke with yesterday suggest that the plateau might already have been reached.

Purchase prices, on the other hand, show no signs of leveling off. The LBO market still is overcapitalized, and it seems that you aren’t doing your job as a big-time LBO fundraiser if your new vehicle isn’t at least $1 billion larger than your last one (CD&R could be the exception). It might be wise of LBO firms to follow the VC firm example and slash fund sizes, but that isn’t going to happen (hey LPs, how are those return expectations treating you?).

Instead, they seem intent on supplanting debt structures with additional equity. We’ve already seen this in a few major buyouts over the past couple of months, in which LBO firms have created something best described as secondary club deal, whereby you put far too much equity into a transaction, and then sell that equity stake off piecemeal after the initial LBO is formally closed. KKR has been a particular practitioner of this strategy.

On the surface, this might look like a validation of the academic model, as purchase price multiples may no longer be tied to debt multiples. In reality, however, it is a new permutation of the real world model, with excess equity simply replacing debt. In other words, available financing – equity, in this case – is still wagging deal prices.

Email  Dan Primack


SiCortex Inc., a Cambridge, Mass.-based provider of Linux clusters for technical applications, has raised $21 million in Series A funding. Polaris Venture Partners led the deal, and was joined by JK&B Capital, Prism Venture Partners and founding investor Flagship Ventures.


Coller Capital has agreed to acquire a portfolio of 22 North American private equity investments from the Institutional Restructuring Unit of Dresdner Bank. The secondary deal is valued at $90 million, and is expected to close by year’s end. Since the beginning of 2003, the IRU has reduced Dresdner’s non-strategic loan and private equity exposure from ?35.5 billion to ?13.5 billion. Its remaining private equity exposure stands at approximately ?900 million.


StoneMor Partners LP, a Bristol, Pa.-based owner and operator of cemeteries in the United States, will begin trading on the Nasdaq under ticker symbol STON. The company priced over 3.67 million common units at $20.50 per unit (top of its $18.50-$20.50 offering range), for a total IPO take of approximately $75.23 million. StoneMor previously was known as Cornerstone Family Services Inc., and was founded in 1999 by company management and private equity firm McCown De Leeuw & Co., when they acquired 123 cemetery properties and four funeral homes. Since then, it has acquired 10 additional cemeteries and one funeral home, built two funeral homes and sold one cemetery.


Citel Technologies Ltd., a Seattle-based provider of IP telephony and communications solutions, has raised $7 million new venture capital funding. Doughty Hanson Technology Ventures led the deal, and was joined by return backers Aberdeen Murray Johnstone Private Equity, Advent Venture Partners, Albany Venture Managers Ltd, Gartmore Investments and Hexagon Investments.


FlowMedica Inc., a Fremont, Calif.-based medical device company focused on renal therapy, has raised $5.6 million in new venture capital funding. ABN AMRO Capital led the deal, and was joined by return backers Oxford Bioscience Partners, Medica Venture Partners and Mi3 Venture Partners.


Neoxen Systems, a Finland-based developer of software for ICT process improvement, has raised ?1 million in new venture capital funding. Aboa Venture Management Oy led the deal, and was joined by Finnish Industry Investment Ltd. and National Technology Agency Tekes.


Above Security, a Montreal-based provider of security management for networks and computer applications, has raised Cdn$2.25 million in venture capital funding from The Solidarity Fund QFL.


Radiant Research Inc., a Bellevue, Wash.-based clinical research company, has raised $11 million in new VC funding. ABS Capital led the deal, and was joined by Salix Ventures, Mayfield Fund and Caltius Capital Partners. Caltius also provided $15 million in mezzanine debt.


The Blackstone Group has acquired Southern Cross Healthcare Ltd. from West Private Equity for ?162 million in cash. The deal was transacted in concert with company management. Southern Cross is a UK-based provider of residential nursing services for both elderly and enduring mental health patients.


Advent International has recapped portfolio company Poundland PLC, a UK-based retailer, according to Dow Jones. The deal returns approximately $58 million to investors.


Molex Inc. (Nasdaq: MOLX) has acquired INCEP Technologies Inc., a San Diego-based developer of intellectual properties focused on semiconductors. No financial terms of the transaction were disclosed. INCEP has raised over $10 million in VC funding since its 1998 inception, from investors like Kestrel Venture Management and Odyssey Venture Partners.


Brightmail Inc., a San Francisco-based provider of anti-spam solutions, has withdrawn its $80 million IPO offering. The move was expected, as Brightmail was acquired in June by Symantec Corp. (Nasdaq: SYMC) for approximately $370 million. Brightmail had received venture capital investments from such firms as Accel Partners and Technology Crossover Ventures.


CallWave Inc., a Santa Barbara, Calif.-based provider of communications application services, has set its IPO offering price to $9-$11 per common share, and its total number of offered shares to 4 million. It originally had filed to raise $69 million. CallWave has raised VC funding from significant shareholders like Insight Venture Partners and New Millennium Partners.


Heidi Levin has joined the private equity group of Northern Trust Global Advisors Inc. as a vice president. She will be based in Chicago, and most recently worked for Comdisco Inc.


Jeff Leopold has been named a principal in the technology practice of executive search firm Christian & Timbers. He previously served as vice president of search firm The Onstott Group and, before that, was a vice president with early-stage investment with Net Ventures.


Silicon Valley Bank today opened offices in both London, UK and Bangalore, India. SVB Europe Advisors Ltd. in London will provide business services and customized debt financing to UK-based technology companies, while SVB India Advisors Pvt. Ltd. in Bangalore will provide business and consulting services to U.S. and India-based technology companies. The Indian effort also will provide services to investors engaged in cross-border investing between the U.S. and India.


  Wednesday, September 15


Private Equity Fundraising (Abbreviated Version)

A bit of computer limbo this morning, as both the home office desktop and office laptop are troubled. Seems the desktop got infected with something yesterday afternoon, at which point I thought: “Why not plug my laptop into my cable modem? All I need to do is install the cable modem software on the laptop.” Brilliant, except that the cable modem software CD somehow corrupted my entire laptop operating system.

Anyway, the preceding whine was an explanatory preface for why this morning’s column – supposed to be on the private equity fundraising market – is being temporarily delayed. But I can share some of the guts: Sources say that Clayton Dubilier & Rice is out raising its seventh buyout fund with a target of around $3.5 billion, while The Carlyle Group is looking to raise up to $5 billion for its latest general fund offering. Then there is Bain Capital, which closed its buyout fund earlier this summer, but now has added $250 million for venture capital investing (Bain Venture Partners 2004). Finally, there is the issue of Citigroup Mezzanine Partners. I reported a few months back that the fund was targeting a $350 million capitalization, but that information was (sort of) incorrect. It is looking for $350 million of outside LP commitments, but plans to use internal Citigroup money to close on a total of $800 million. So far it’s closed on a bit over $600 million all together, with a final close expected within the next two months.

Email  Dan Primack


Ventures West Management has closed its eighth venture capital fund with Cdn$250 million in limited partner commitments. The Toronto-based firm’s previous fund was capped at Cdn$235 million in 2000. Limited partners on Fund VIII include British Columbia Investment Management Corporation, Business Development Bank of Canada, Caisse de depot et placement du Quebec, CPP Investment Board, EdgeStone Capital Partners, OMERS, University of Toronto Asset Management Corp. and Teachers? Private Capital, the private equity arm of the Ontario Teachers? Pension Plan.


Verari Systems Inc., a San Diego-based blade computing company, has raised over $13.27 million in Series B funding. Carlyle Venture Partners led the deal, and was joined by return backers Sierra Ventures, Voyager Capital and Celerity Partners.


Cedara Software Corp. (Nasdaq: CDSW) has agreed to acquire eMed Technologies Corp., a Burlington, Mass.-based provider of picture archiving, communications systems and Web-based medical imaging radiology solutions. The transaction is valued at $48 million in cash, and is expected to close within the next 30 days. EMed had raised around $42 million in total VC funding since its 1998 inception as ACCESS Radiology, including a $22 million infusion in 2000 at a post-money valuation of approximately $51 million. Investors included Delphi Ventures, Bedrock Capital Group, Bessemer Venture Partners, Boston Millennia Partners, CSFB Private Equity, Child Health Investment Co., Pacific Venture Group, Schroder Ventures Life Sciences, Seaflower Ventures and Zero Stage Capital.


Synfora Inc., a Mountain View, Calif.-based provider of application engine synthesis tools for system-on-a-chip design, has raised $10 million in second-round VC funding. ATA Ventures led the deal, and was joined by return backers Foundation Capital and U.S. Venture Partners.


Tizor Systems Inc., a Maynard, Mass.-based provider of information security and privacy solutions, has raised approximately $3.1 million in Series A funding. Investors included Masthead Venture Partners, Navigator Technology Ventures, CommonAngels and undisclosed industry executives. The deal closed in May.


SensorLogic Inc., a Dallas-based provider of integrated M2M solutions, has raised over $10 million in Series A funding (more specific details were not disclosed). Boston Millennia Partners and Sevin Rosen Funds co-led the deal, and were joined by Star Ventures, Hunt Ventures and STARTech Foundation.


HistoRx Inc., a New Haven, Conn.-based developer of bio-diagnostic technologies, has raised $1.5 million in Series A funding. Navigator Technology Ventures (the VC investment arm of Draper Laboratory Inc.) led the deal, and was joined by Marnat Investments, Sachem Ventures and Genentech Inc.


Mercado Software Inc., a Palo Alto, Calif.-based provider of online search applications, has raised approximately $13 million in new VC funding. Investors included Pitango Venture Capital, Star Ventures and Mofet. Mercado now has raised $55 million in total VC funding since its 1995 inception.


Oblix Inc., a Cupertino, Calif.-based provider of enterprise network security solutions, has received a strategic investment from Siemens AG. No financial terms were disclosed. In related news, Oblix has signed a global reseller agreement with the Siemens Information and Communications Networks group. The company has raised over $90 million in total VC funding, including a $5 million Series F deal this past summer.


GTCR Golder Rauner has agreed to sell its eight million share stake in DigitalNet Holdings Inc. (Nasdaq: DNET), in support of the proposed merger between DigitalNet and BAE Systems North America Inc., the U.S. subsidiary of BAE Systems PLC. As part of the merger, BAE will acquire all outstanding shares of DigitalNet for approximately $30.25 per share. The entire transaction is valued at approximately $600 million, including the assumption of $93.25 million in DigitalNet debt. GTCR Golder Rauner launched DigitalNet in September 2001, and invested a total of around $62 million into the company. It went public via an $85 million IPO in October 2003.


Swander Pace Capital has sold portfolio company TotesIsotoner Corp. to private equity firm Bruckmann, Rosser, Sherrill & Co. No financial terms were disclosed. TotesIsotoner is a Cincinnati-based provider of branded rain and cold weather apparel and accessories. Goldsmith Agio Helms advised Swander Pace on the deal.


OPNET Technologies Inc. (Nasdaq: OPNT) has agreed to acquire Altaworks Corp., a Nashua, N.H.-based provider of e-business application management software. No specific terms of the all-cash transaction were disclosed. Altaworks has raised over $45 million in total VC funding since its 1999 inception, from investors like St. Paul Venture Capital, Prism Venture Partners, Primus Venture Partners and YankeeTek Ventures.


Yahoo Inc. (Nasdaq: YHOO) has agreed to acquire MusicMatch Inc., a San Diego-based provider of music software and services. The deal is valued at approximately $160 million in cash, and is expected to close next quarter. MusicMatch raised over $33 million in total VC funding since its 1997 inception, including a Series C infusion in 2001 at a post-money valuation of approximately $80 million. Company investors include Redpoint Ventures, Intel Capital and Thomson Multimedia (a subsidiary of Thomson Corp., which publishes the PE Week Wire).


Tom Wheeler has joined Core Capital Partners as a special partner. He recently retired as president and CEO of the Cellular Telecommunications and Internet Association.


Ann Quinn has agreed to join Bethesda, Md.-based investment bank Chessiecap Inc. as director of strategy services. She will leave her managing director position with the Maryland Venture Fund at the end of September.


Gregg Vignos, an attorney specializing in private equity, M&A and VC transactions, has joined Paul, Hastings, Janofsky & Walker LLP as a San Francisco-based partner in the firm’s corporate practice. He previously worked at Pillsbury Winthrop LLP.


Douglas Londal has joined New Mountain Capital as a New York-based managing director, according to The Deal. He most recently was involved in the GS Capital Partners unit of Goldman Sachs & Co.


Mike Sibson has been promoted to the position of investment director within 3i Group’s oil and gas team. He originally joined the firm in 2000.


Bear Stearns Merchant Banking announced that it has formed a strategic alliance with private investment firm GlobeSecNine Inc. to make investments in the homeland defense and security sectors. Bear Stearns previously had designated $300 million of its $1.5 billion fund for such purposes.


  Tuesday, September 14


The IPO Void

When I begin work on the PE Week Wire each morning, my first online stop is at the Securities & Exchange Commission website. This habit was formed early in the year, when private equity-backed companies were falling over each other to file and price new IPOs. Even some investment firms themselves got into the act, with the over-hyped (mea culpa) business development company phenomenon. During the second quarter, for example, 30 VC-backed companies priced on U.S. exchanges, while another 79 VC-backed companies were in registration as of June 30 (out of a total of 175).

Since the second quarter ended, however, PE-backed IPO activity has slowed dramatically. Today’s “recent filings” section in the SEC database, for example, does not show a single new IPO filing, IPO pricing or even IPO withdrawal (PE-backed or otherwise). There was one proposed IPO terms amendment from Carter’s Inc. – which still counts Berkshire Partners as a significant shareholder – but it’s a secondary IPO.

This is the exact opposite of the proposed Google effect, whereby the IPO window was supposed to fly open once Larry Page got obscenely wealthy. It could be argued that Google’s pricing troubles helped mitigate its market impact, but the reality continues to be that private equity-backed companies have never really looked to Google as a predictor of their own IPO fortunes. Instead, they look to other recent IPOs in their industry space – which, in most cases, have not experienced strong aftermarket performance (not to mention poor pricing points). As such, the new conventional wisdom is to wait until the IPO market looks safer.

This might be a discouraging development for private companies that were raring to go public just a few months back, but it’s a net gain for both public and private market investors. As was mentioned in this space a few months back, too many unprofitable companies were filing to go public in early 2004. It wasn’t a repeat of 1999, but some of the same undercurrents were present. What we are seeing now is a return to fiscal common sense, as private companies learn that balance sheet strength and product availability – not market momentum – should be the primary selling points of a IPO prospectus.

Email  Dan Primack


Sony Corp. (NYSE: SNE) has agreed in principal to acquire Metro-Goldwyn-Mayer Inc. (NYSE: MGM), in partnership with Providence Equity Partners, Texas Pacific Group and DLJ Merchant Banking Partners. The deal is valued at $2.94 billion, or $12 per outstanding MGM share. The Sony-led consortium also would assume around $1.9 billion in MGM debt, and already has submitted a $150 million security deposit. Time Warner originally had been interested in acquiring MGM, but dropped out of the bidding over pricing issues. In related news, Sony and its investment partners have reached a programming and distribution agreement with Comcast Corp., which would allow for distribution of Sony Pictures and MGM content via Comcast’s video-on-demand platform. The deal also would allow for the creation of a joint cable channel venture featuring Sony and MGM content. If the MGM acquisition falls through, the Comcast deal will continue, but! only would include Sony content.


College Sports Television (CSTV), a New York-based operator of a 24-hour cable television network devoted to college sports, has received $25 million in new private equity funding. Soros Private Equity led the deal, and was joined by veteran sports executive Dave Checketts. Checketts will become co-chairman of CSTV, and also will oversee Mountain West TV, a new regional sports network being launched by CSTV and the Mountain West Conference. Checketts also has sold SportsWest Communications, a Salt Lake City-based syndicated college sports broadcaster, to CSTV for an undisclosed amount.


Microsoft Corp. (Nasdaq: MFST) and UK-based mobile phone maker Sendo Ltd. have settled a lawsuit in which Sendo had accused Microsoft of sharing Sendo’s intellectual property with other phone makers. As part of the settlement, Microsoft has agreed to give up its minority ownership position – believed to be approximately 4 percent – in Sendo. No other terms have been disclosed.


Proofpoint Inc., a Cupertino, Calif.-based provider of messaging security solutions for large enterprises, has raised $20 million in Series C funding. Meritech Capital Partners led the deal, and was joined by return backers Benchmark Capital, Inventures Group, Lighthouse Capital Partners, RRE Ventures and Mohr, Davidow Ventu