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PE Week Wire: Thurs., May 31, 2007

I get asked that question all the time, and the usual answer is that the item doesn’t fall within my editorial bailiwick. For example, it’s great that Johnny Johnson gotpromoted tomanager of the Chuck E.Cheese in Toledo, but it’s really more appropriate for someone else.

But this rambling is specifically aimed at PR folks who represent banks and law firms that work on private equity transactions (i.e., relevant items). When you ask the title question, my answer is usually as follows: “You were too late.”

The problem is that many of your clients like to issue their own press releases, which invariably come out after the involved company has issuedits own statement (often neglecting to mention either the bankers or lawyers). In other words, I don’t see your press release until after I’ve already written up the deal.And it’s highly unlikely that I’ll print another item with just this extra tidbit of info.

The solution is to get your clients into thecompany release. If they really want separate ones, make sure it’s distributed within minutes of the company’s. If your clients balk, just forward them today’s Wire. Then they won’t need to keep asking so many questions…

*** Yesterday’s blogosphere was filled with old campaign ads for Senator Ted Kennedy, from his 1994 race against former Bain Capital chief Mitt Romney. Specifically, television spots that the HuffingtonPost claims “kept Romney out of the U.S. Senate.”

The ads are designed to highlight the occasional underbelly of private equity, as they are a series of interviews with striking workers at an Indiana company called SCM – which had been acquired by Bain portfolio company Ampad. The basic storyline goes that SCM plant workers got laid off and then offered their jobs back at reduced wages. They went on strike, at which point Kennedy’s campaign sent a film crew. The message was clear: Romney doesn’t care about workers.

Things like this will keep popping up the better Romney does, but it’s worth reminding HuffPo and others that Romney didn’t lose in 1994 because of the ads. He lost because Ted Kennedy wiped the floor with him in their first televised debate. It was that simple. Massachusetts voters had come to assume that Kennedy was a washed-up drunk, and that perhaps change was needed. But the Kennedy who showed up was alert, articulate and feisty – persuasively arguing that voters should choose experience over novice. It was a knockout from which Romney never recovered.

The ads didn’t help, but Romney’s experiences with Bain did not decide the election in 1994. And it’s equally unlikely to have much effect in 2008 — win or lose.

Top Three

Alliance Boots PLC shareholders overwhelmingly approved a proposed Gbp11 billion buyout offer from Kohlberg Kravis Roberts and executive deputy chairman Stefano Pessina. Acceptance of the offer means Alliance Boots shares will delist on June 28, the and become the first FTSE 100 company to fall into private equity hands — 10 months after it was created through the merger of Boots Group PLC and Alliance UniChem. Read more, including why not all Boots shareholdders are happy.

PAI Partners has abandoned its pursuit of Franco-Spanish cigarette maker Altadis SA, despite having issued a joint bid with CVC Capital Partners. Reports suggest that CVC will carry on, and that the split was caused – in part – by disagreements on how to divide control of Altadis were their Euro 12.8 billion bid to have been accepted.

Fox Interactive Media has acquired PhotoBucket Inc., a Palo Alto, Calif.-based provider of visual content hosting and publishing services. No financial terms were disclosed, but reported prices range from $250 million to $300 million. PhotoBucket had raised nearly $17 million in total VC funding from firms like Trinity Ventures and Insight Venture Partners. http://www.photobucket.com/

VC Deals

Interventional Spine Inc., an Irvine, Calif.-based developer of percutaneous spinal devices, has raised $24 million in Series C funding. Ascension Health Ventures led the deal, and was joined by Wexford Capital LLC, HBM BioVentures, Rock Creek Partners and affiliates, The MedFocus Fund, LLC, and a group of current investors. www.i-spineinc.com

Impressive Creative Inc., a producer of regional live entertainment in China, has raised $25 million in Series A funding, according to VentureWire. SIG Asia Investments led the deal, and was joined by IDG Venture Capital and Goldman Sachs.

Ception Therapeutics Inc., a Malvern, Pa.-based drug company whose lead candidates are anti-inflammatories, has raised $14.7 million in additional Series C funding from existing shareholders Third Point and Greenlight Capital. This brings the Series C round total to $77 million, following an initial close that included participation from Essex Woodlands Health Ventures, Investor Growth Capital, MDS Life Sciences, New Science Ventures and Aperture Venture Partners. http://www.ceptiontx.com/

WaveTec Vision Systems Inc., an Aliso Viejo, CA-based developer of a system to help optimize patient outcomes in intraocular lens replacement procedures, has raised $13 million in Series B funding. Accuitive Medical Ventures and De Novo Ventures co-led the deal, and were joined by return backerVersant Ventures.

Radlive Ltd, an Israel-based enterprise telephony startup, has raised $7.65 million in Series A funding. Elron Electronic Industries and Gemini Israel Funds co-led the deal.

Interactive TKO Inc., a Dallas, Texas-based provider of software testing solutions for composite business applications, has raised $7.5 million in Series B funding, according to a regulatory filing. Vesbridge Partners was joined by return backers Hunt Ventures and CenterPoint Ventures. http://www.itko.com/

Southwest Windpower Inc., a Flagstaff, Ariz.-based maker of residential-scale wind generators, has raised $6.5 million in Series B funding. NGP Energy Technology Partners led the deal, and was joined by return backers Altira, CTTV Investments and Rockport Capital Partners. http://www.windenergy.com/

Gizmoz Inc., a developer of personalized animated avatar technology, has raised $6.3 million in Series A funding. Benchmark Capital led the deal, and was joined by Columbia Capital. The company was launched four years ago, and was seeded by around $4 million in angel capital. http://www.gizmoz.com/

The Multiverse Network, a Mountain View, Calif.-based developer of multiplayer online games and 3D virtual worlds, has raised $4.175 million in Series A funding led by Sterling Stamos Capital Management. http://www.multiverse.net/

INI Power Systems Inc., a Morrisville, N.C.-based developer of methanol-powered fuel cell systems, has raised $4 million in Series B funding. MHI Energy Partners led the deal, and was joined by individual angels. http://www.inipower.com/

Pegase Medical Inc., a Quebec City-based developer of natural base products for the animal market, has raised Cdn$3 million in first-round funding. Backers include Innovatech Quebec, Fonds Bio-Innovation, Lodial Capital and Benoit Cote.

NanoH2O, a Santa Monica, Calif.-based water purification startup, has raised $5 million from Khosla Ventures. http://www.nanoh2o.net/

Buyout Deals

Kinder Morgan Inc. has closed its $107.5 per share buyout by a consortium that includes chairman Richard Kinder, GS Capital Partners, AIG, The Carlyle Group and Riverstone Holdings. The total deal is valued at around $22 billion, including around $7 billion in assumed debt. www.kindermorgan.com

Thomas H. Lee Partners and Fidelity National Financial (NYSE: FNF) have agreed to acquire Ceridian Corp. (NYSE: CEN), a Minneapolis-based provider of human resource outsourcing services in the U.S., U.K. and Canada. The total deal is valued at approximately $5.3 billion, with Ceridian shareholders to receive $36 per share. Deutsche Bank Securities and Credit Suisse have provided leveraged financing commitments, while Ceridian is being advised by Greenhill & Company. http://www.cerid! ian.com/

Genesis HealthCare Corp. (Nasdaq: GHCI) shareholders have approved a $63.35 per share buyout offer from Formation Capital and JER Partners. Genesis is a Kennett Square, Pa.-based long-term care provider with over 200 skilled nursing centers and assisted living residences in 13 eastern states. http://www.genesishcc.com/

Genesco (NYSE: GCO) has retained Goldman Sachs to explore a possible sale of the company. The Nashville, Tenn.-based shoe and cap retailer also announced that it has rejected a $51 per share buyout bid from rival Foot Locker. Genesco has a current market cap of approximately $1.2 billion, and closed trading yesterday at $52.30 per share. http://www.genesco.com/

Jo-Ann Stores (NYSE: JAS) has retained Lehman Brothers to explore a possible sale, according to The Deal. First-round bids are due next month, with a total asking price of just under $1 billion. Jo-Ann Stores is a specialty retailer of fabrics and crafting supplies, and has a current market capitalization of approximately $775 million. http://www.joann.com/

Bain Capital has become the latest buyout firm to abandon its pursuit of Australian retailer Coles Group Ltd., according to Bloomberg. Bain is the third firm to leave a consortium that now only includes Blackstone Group, Carlyle Group and TPG. KKR and CVC Asia Pacific pulled out over the weekend. Coles currently has an Au$19 billion buyout offer on the table from Westfarmers Ltd. and Pacific Equity Partners.

Calvert Street Capital Partners has agreed to acquire Monotype LLC, a Baltimore, Md.–based provider of content development, design, production and project management solutions to the pre-K-12 grade education industry. No financial terms were disclosed. Berkery, Noyes & Co. advised Monotype on the deal. http://www.cscp.com/ http://www.monotype.net/

Exponent Private Equity and VSS are no longer bidding to acquire horse-racing newspaper Racing Post from Trinity Mirror PLC, according to Dow Jones. An alternate bidder is reportedly Ireland-based FL Partners, which values the paper at approximately Gbp190 million.

Nautic Partners has acquired Respond2 Communications Inc., a Portland, Ore.-based direct response advertising agency. No financial terms were disclosed. http://www.nautic.com/ http://www.respond2.com/

AIG Capital Partners has agreed to become a “significant investor” in Sindicatum Carbon Capital Ltd., a London-based financier and developer of greenhouse gas abatement projects. No financial terms were disclosed. Other Sindicatum shareholders include Citi, Black River Commodity Clean Energy Investment Fund and Foresight Venture Partners. http://www.aig.com/

EQT Partners has agreed to acquire Cimbria AS, a Danish industrial engineering company. No financial terms were disclosed. http://www.eqt.se/

Lion Capital has agreed to buy European bakery Vaasan & Vaasan Group from CapVest. No financial terms were disclosed. V&V sells its products in the Nordic and Baltic regions. http://www.lioncapital.com/ www.vaasan.com

Permira “is investigating the possibility of launching a takeover bid for LogicaCMG,” the Times of London reported Wednesday. The speculation comes on the back of the recent news that Martin Read would step down as the company’s chief executive after a profits warning was issued last week. Blackstone and KKR have also been mooted as possible buyers for LogicaCMG.

Pe-Backed IPOs

Jazz Pharmaceuticals Inc., a Palo Alto, Calif.-based drug development and commercialization company focused on neurology and psychiatry, has lowered its IPO price range from $24-$26 per share to $20-$21 per share. It still plans to offer six million shares, and to trade on the Nasdaq under ticker symbol JAZZ. Morgan Stanley and Lehman Brothers are serving as co-lead underwriters. Jazz has raised around $265 million in VC funding since its 2003 inception, from firms like KKR (46.24% pre-IPO stake), Thoma Cressey Equity Partners (10.72%), Beecken Petty O’Keefe & Co. (7.15%), Prospect Venture Partners (6.65%), Versant Ventures (6.65%), Golden Gate Capital (5.36%), Lehman Brothers (5.13%), Adams Street Partners, EGS Healthcare Capital Partners and Oak Hill Capital. www.orphan.com

PE-Backed M&A

Luvata, a European supplier of fabricated metal solutions and components to the manufacturing and construction industries, has agreed to acquire ECO SpA, a manufacturer of heat-transfer coils and coolers. No financial terms were disclosed. Luvata is a portfolio company of Nordic Capital, while ECO is being sold by Compass Partners and represented by Robert W. Baird & Co.

PE Exits

Bain Capital plans to sell five million shares of Innophos Holdings Inc. (Nasdaq: IPHS), via a secondary public offering. If successful, the deal would reduce Bain’s ownership position from 48.5% to 24.5 percent. Bain acquired Innophos in 2004 from Rhodia for $550 million, and brought it public last fall. http://www.innophos.com/

Norvestor sold 9.5 million shares in Norwegian seismic data acquisition company SCAN Geophysical ASA, for approximately $44 million. Norvestor retains a 21.77% stake in SCAN, which trades on both the Norwegian OTC list and the Oslo Axess. www.scangeo.com

Firms & Funds

Shefa Ltd., a new private equity fund focused on healthcare opportunities in the Middle East, has received a $15 million commitment from IFC, the private sector arm of the World Bank. It previously secured a cornerstone commitment from Saudi Healthcare Investment Co., and is being managed by Bahrain-based Injazat Capital. http://www.ifc.org/

Human Resources

Fearghal O’Riordain has joined Scottish Equity Partners as a London-based partner focused on information technology opportunities. He spent the past five years with Accel Partners, and was a founding principal of Accel’s European practice. http://www.sep.co.uk/

Geoffory Dubus has joined GIMV as head of its French IT investment activities, and to open the firm’s first office in France. He previously was a general partner with Innovacom in Paris. www.gimv.com

David Kabakoff has joined Sofinnova Ventures as an executive-in-residence in charge of the firm’s new San Diego office. He most recently founded a strategic consulting practice, and before that was co-founder and CEO of cancer drug company Salmedix Inc. www.sofinnova.com

Alan Menkes has joined I/ST Equity Partners as a partner. He had joined Tri-Artisan Partners as a managing director last year, before which he was founder and managing partner of Empeiria Capital and, before that, was co-director of private equity at Thomas Weisel Partners.

Kevin Yamashita has joined Bertram Capital as a vice president. He previously was with Calera Capital, and also has held positions with TPG, Yucaipa Cos. and the I-banking division of Salomon Smith Barney. http://www.bertramcapital.com/

Thomas Rapone has joined CapitalSource as a business development officer in its security lending group. He is a former U.S. Marshall who also served as Secretary of Public Safety in Massachusetts. http://www.capitalsource.com/