PE Week Wire — Thursday 4/8

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Electronic Arts president and COO John Riccitello is leaving the entertainment software company to start a private equity firm. According to the New York Times , he will team up with Roger McNamee , who helped found Integral Capital Partners and Silver Lake Partners, to start a firm in Menlo Park , Calif. He has resigned his position effective immediately but will stay at EA for a transition period. Riccitello announced his intentions in an EA press release yesterday.

 

Carlyle Group , Texas Pacific Group and the private equity unit of Goldman Sachs are teaming up on a 4 billion British pound bid for four natural gas distribution networks, Dow Jones is reporting. The networks are being sold by National Grid Transco PLC, a U.K. utility. 

Qlusters Inc . , a Palo Alto, Calif.-based software company focused on enterprise cluster management, has raised a $16 million round of financing. Led by new investor Duff Ackerman and Goodrich LLC (DAG), the deal also attracted new backer Charles River Ventures and return investors Benchmark Partners and Israel Seed Ventures. In conjunction with the financing, DAG General Partner John Cadeddu joins the company board. Founded in 2001, Qlusters also has regional offices in New York and Tel Aviv. www.qlusters.com

Mobileway , a San Mateo, Calif.-based provider of wireless device content, has raised $23 million in venture capital financing from Institutional Venture Partners, Intel and Visa, TR Daily is reporting. 

Kohlberg Kravis Roberts & Co. and Hellman & Friedman have emerged as competing bidders for Chicago-based media company Hollinger International Inc., according to published reports. KKR is making its offer alone, while Hellman & Friedman is part of a consortium that includes Israeli billionaire Haim Saban and German publisher Axel Springer. Some of Hollinger’s best-known assets are the Chicago Sun-Times and the Jerusalem Post.

HSBC Capital Canada Private Equity Fund teamed up with the management of Sydney-based Coruc CIC Inc. to acquire the North American specialty metals and carbon flat-rolled distribution businesses of Corus CIC and Corus America Inc., Platts Commodity News reported. The business has been renamed Encore Metals and the carbon flat-rolled business is now Encore Coils. Don Dalgleish and Roger Wild were named as presidents, respectively.

Electric customers in Portland , Ore. , this month will get the chance to publicly examine Texas Pacific Group ‘s offer to buy Portland General Electric for $2.35 billion, the Oregonian is reporting. The city council is slated to discuss the deal this afternoon, while tonight the Oregon Public Utility Commission will do its first of five open houses at which Texas Pacific Group will answer questions. The proposal, announced in November, has been controversial because the plan involves no initial rate cuts for PGE customers. Other critics are pushing for public ownership of PGE. For its part, TPG has said the tranaction offers several benefits, including ownership certainty and ongoing investment in the business. The PUC has to approve the sale, and is expected to complete its review of the plan by year-end. 

Richard Frank , chief executive of Darby Overseas Investments, is the new chair of the Latin American Venture Capital Association’s Board of Directors. He replaced Everett Santos, Chairman of the AIG-GE Capital Latin American Infrastructure Fund, at the end of March. The Latin American Venture Capital Association’s mission is to promote the growth of the region’s private equity industries through research, education and advocacy.

Carl Schramm has joined the board of the Center for Venture Education, a Shawnee Mission, Kan.-based nonprofit, post-graduate educational institute for venture capitalists and entrepreneurs that was once part of the Ewing Marion Kauffman Foundation. Schramm is president and CEO that foundation, and was previously chairman of Greenspring Advisors, a Baltimore-based merchant banking firm focused on health care and insurance. He has also been an entrepreneur in residence and has worked for 20 years in the health care industry.

John Friedman has joined the board of directors at Mississauga, Ontario-based YM Biosciences Inc., a cancer drug development company. He is managing partner of Easton Hunt Capital Partners in New York .

Charles Benaiah has been named president and COO of HMP Communications, a privately held, Malvern, Pa.-based medical publishing and communications company. Benaiah was previously a partner with private equity firm BG Media Investors, which is one of HMP’s investors.

Mark Brown has been named as CEO and director of Traux Ventures Corp., a Vancouver-based mining company. Brown is a principal of venture investor Pacific Opportunity Capital Ltd. 

International Business Machines Corp. will acquire Daksh , a venture-backed company that is India ‘s third-largest business process outsourcing firm, in a deal estimated between $150 million and $200 million, according to published reports. The company is anchored by its call center services, provided to companies including Amazon.com. Founded in 2000, Daksh is backed by CDC Capital Partners, Citigroup and General Atlantic Partners.

Stockholm-based Net Insight has agreed to acquire Q2 Labs AB , an optical networking company that is 3.7% owned by Palago Venture Partners AB.


Private equity-backed Transonic Travel Ltd .
, a Sydney-based air and leisure company, plans to raise 51.2 million Australian dollars on the Australian Stock Exchange on May 14, Dow Jones reported. Its investors are ABN Amro Capital, Wolseley Partners and chief executive Peter Lacaze . Among other services, the company provides international airfares and ticketing services for Australian travel agents and represents international airlines in Australia .  

Despite the overall decline in venture investing last year, investments in clean technology-related ventures rose to $1.2 billion from $1.1 billion, according to Cleantech Venture Network . One segment of clean tech that experienced dramatic growth was the advanced materials and nanotech area, which jumped 64% over 2002 totals. Conversely, energy investments recorded a 10% drop during the same period.

NEWS FROM WEDNESDAY 4/7

NightHawk Radiology Holdings , a Coeur D’Alene, Idaho-based company that provides overnight teleradiology services for medical professionals, has raised $25 million from Summit Partners. The deal was a roughly equal combination of subordinated debt and equity. Prior to Summit’s involvement, Radiology Associates of Northern Idaho held a 60% stake in the company, but after this funding the founders become the majority shareholders and Summit ‘s stake is less than 50 percent. Cascadia Capital was an advisor on the transaction. www.nighthawkrad.net

Staccato Communications Inc ., a San Diego-based fabless semiconductor company focused on ultrawideband wireless solutions, has raised $20 million in Series B funding. The deal included new investor InterWest Partners and return backers Allegis Capital, Bay Partners, and Charles River Ventures. The company was founded in 1996. www.staccatocommunications.com

Archemix Corp. , a Cambridge, Mass.-based biopharmaceutical company focused on developing aptamer therapeutics, has raised $50 million of Series B financing. Led by Highland Capital Partners, the deal also attracted other return backers Atlas Venture, Prospect Venture Partners, Schroder Ventures Life Sciences, Rho Ventures, Care Capital, MDS Capital, POSCO BioVentures and US Trust Private Equity. In conjunction with the deal, Highland ‘s Corey Mulloy will join the Archemix board. Founded in 2001, the company has now raised $100 million. http://www.archemix.com

AGY Therapeutics Inc., a South San Francisco, Calif .-based biopharmaceutical company, has raised $9 million of Series C funding. The deal included return backers Bear Stearns Health Innoventures , HBM Partners, Alta Partners, GIMV, Novartis Venture Fund, Jafco , NIF, Cheng Xin , GE Capital and Lotus. The company has now raised $68 million since its founding in 1998. www.agyinc.com

SMART System Technologies Inc ., a New York-based company that provides merchants with cashless and contactless payment and marketing analytics services, has closed $6 million of Series A funding from Draper Fisher Jurvetson Gotham Ventures, The Grosvenor Funds and Apex Venture Partners. The company was founded in 2003. www.PowerPayIt.com

Discera Inc. , a Campbell, Calif.-based fabless semiconductor company, has raised $12 million of Series B funding from 3i, Partech International, QUALCOMM Inc. and return backer Ardesta LLC. Founded in 2001, Discera develops ultra-miniaturized components for the wireless industry. www.discera.com

Berkshire Partners LLC and Summit Partners have made an undisclosed investment in Plymouth, Mass.-based Bartlett Nuclear Inc., which provides radiological protection services to the U.S. nuclear industry.  Company founder Bruce Bartlett will retain a significant ownership position in Bartlett Nuclear and serve as chairman of the now 25-year-old company. Merrill Lynch and Royal Bank of Scotland will provide debt financing capabilities, while Summit Vice President Gabriel Gomez and Managing Partner Marty Mannion will take seats on the company’s board. Newbury Piret & Company Inc. advised Bartlett Nuclear in the transaction.

Welsh, Carson, Anderson & Stowe -backed Onward Healthcare, a Norwalk, Conn.-based healthcare staffing services company, has acquired two companies in this space- HealthStaff Professionals Inc. and MediStaff Inc. HealthStaff has offices in New Jersey, New York and Philadelphia, while MediStaff is based in California.

Henderson Private Capital has purchased Wellnet SpA , an Italian health and fitness company that had revenues of more than 12 million euros in 2003. No terms were disclosed, but Henderson said it was introduced to Wellnet by Arietti & Partners. This is Henderson’s third investment in the European leisure sector.


Summit Partners is selling EMED Co., a signage and safety solutions company, to Brady Corp., for $190 million. Milwaukee, Wis.-based Brady, which focuses on identification solutions, expects to fund the purchase with new credit facilities organized by Bank of America. EMED had 2003 sales of $55 million. Robert W. Baird & Co. was financial advisor to Brady on the acquisition.

NEWS FROM TUESDAY4/6

Nashville, Tenn.-based American Esoteric Laboratories Inc ., a newly formed platform company which provides esoteric clinical laboratory services to hospitals and specialist physicians, has received $70 million from ABS Capital Partners and Oak Investment Partners. It also announced the acquisitions of its first two specialty laboratories, ThromboCare Laboratories and Viral Diagnostics Inc. ABS General Partner John Stobo and Oak General Partner Ann Lamont have joined AEL’s board of directors. In a press release, Stobo said ABS had backed the management team before. www.AEL.com .

Continuum Photonics Inc. , a Billerica, Mass.-based maker of high-performance optical switches for the optical automation systems and telecom markets, has raised $17.5 million in its Series C financing. Led by new investor JK&B Capital, the deal also won “significant participation” from Boston Millennia Partners. Return backers Prism Venture Partners, Flagship Ventures, Harris & Harris Group, Gainesborough LLC, and individual investors also participated. With this latest financing, Al DaValle , Partner of JK&B Capital, has joined the company board. www.continuumphotonics.com

Bank of America Corp. yesterday said it plans to cut 12,500 jobs in the wake of its $48 billion purchase of FleetBoston Financial Corp ., a deal that was completed on April 1. Chief Executive Kenneth Lewis has targeted $1.6 billion of cost savings from the merger. The cuts will take place over the next two years, and about 30 percent of them will come through attrition, the bank said.

The merger positions BofA as the No. 3 U.S. bank, after Citigroup Inc. and J.P. Morgan Chase & Co., once the latter buys Bank One Corp. Bank of America has about $938 billion of assets, 5,700 banking offices in 29 states and Washington , D.C. , and about 36 million customers.


Ablynx
, a Ghent , Belgium-based biotech company focused on nanobodies , a class of therapeutic antibodies, has raised 25 million euros of Series B financing. Led by Alta Partners, the deal also included Abingworth Management, as well as return backers GIMV, Biotech Fund Flanders , Sofinnova Partners and Gilde . Founded in 2002, Ablynx is a spin-off of the Flanders Interuniversity Institute for Biotechnology and the Free University of Brussels. http://www.ablynx.com

Summit Partners and W. Scott Webber recently made an equity investment in Autobase , Inc., a Fishers , Ind.-based CRM software provider focused on car dealers. As part of the deal, Webber will become chairman and CEO of the company. Bryan Anderson, founder of the 16-year-old company, will continue as president.

Japan ‘s Yamonouchi Pharmaceutical Co. Ltd . is selling four of its subsidiaries-including three in the U.S. -to a trio of U.S. private equity firms for 60 billion yen, according to Dow Jones . Ripplewood Holdings and Activated Holdings will purchase nutritional product companies Shaklee Japan KK, Shaklee Corp. and Inobys for the equivalent of $310 million, while Wasserstein Co. will buy Bear Creek Corp., its food products and roses unit, for the equivalent of $260 million. The sales are expected to close in June.

GTCR Golder Rauner -backed TransFirst , a transaction processing services company, has acquired the third party and agent bank merchant division of Fifth Third Bank Processing Solutions. In addition to the acquisition agreement, TransFirst and Fifth Third Bank have entered into a strategic relationship whereby Fifth Third will provide certain third party merchant processing referrals to TransFirst . GTCR did a recapitalization of TransFirst , a transaction processing service company , in 2000.

Charlesbank Capital Partners LLC has invested $10 million in portfolio company Regency Gas Services to acquire the Waha gathering and processing assets from Duke Energy Field Services. Located near Midland, Texas, the Waha assets represent the first add-on acquisition for Regency, which was formed in June 2003 by Charlesbank and Regency’s current management to purchase natural gas gathering, processing and pipeline assets from El Paso Corporation of Houston. Besides the equity investment, Charlesbank and management raised approximately $50 million of senior debt, primarily from Wells Fargo and other existing lenders.

Castle Harlan Australian Mezzanine Partners is planning to sell mining equipment company Bradken Resources in an Australian Stock Exchange IPO, Reuters reported. The deal would value the company at 400 million Australian dollars ($303 million). Castle Harlan expects to release a prospectus sometime this month, the story said.

Fund-of-fund manager Progress Investment Management has become independent after a management buyout of the company from Fleet investment arm Columbia Management Group. Currently managing $3.8 billion of capital, San Francisco-based Progress funds 59 emerging managers in 11 multi-manager investment strategies, and 11 partnership funds in a private equity fund-of-funds strategy.

The Israeli Venture Association and China ‘s Shenzhen Venture Capital Association have signed an agreement to cooperate on science and technology investment, Business Daily Update is reporting. The agreement, announced last Friday at the China Venture Capital Forum 2004, is designed in part to promote more Israeli VC into Chinese companies.

 

NEWS FROM Monday 4/5

 

Starent Networks Corp., a Tewksbury, Mass.-based provider of mobile infrastructure solutions, has raised $25 million in Series D funding. Focus Ventures led the deal, and was joined by fellow new investor ITOCHU Corp. Return backers included Matrix Partners, North Bridge Venture Partners, Highland Capital Partners and Samsung Electronics Co. Ltd. The company now has raised $80 million in total VC funding since its August 2000 inception. www.starentnetworks.com

 

Aber Diamond Corp. (Nasdaq: ABER) has acquired a 51% controlling interest in luxury jewelry maker Harry Winston Inc. from Fenway Partners. The new agreement is worth $85 million, of which $20 million is in the form of additional working capital Aber will initially pay $40 million and fund the remainder over a one-year period. In conjunction with the deal, Harry Winston has arranged a $60 million credit facility with a consortium of banks, led by ABN Amro Bank. Fenway purchased a 55% interest in Harry Winston in December 2000. Aber has the option to purchase the remaining 49% interest from Fenway and Harry Winston in six years at fair market value. www.harry-winston.com

 

Mike Ahearn has returned to the venture capital scene as a recruiting partner with Greylock. He most recently served as a managing director with Boston-based executive search firm Conley & Co., and before that served as a recruiting partner with Charles River Ventures‘ CRVelocity program. www.greylock.com

 

Digital Persona Inc., a Redwood City, Calif.-based provider of fingerprint authentification solutions, has raised $13 million in Series C-1 funding. VantagePoint Venture Partners led the deal, and was joined by return backers Chess Ventures, Fininvest, IDG Ventures and Invesco Private Equity. The company now has raised around $47 million in total VC funding since its 1996 inception, including a $17.51 million Series F round in 2001. www.digitalpersona.com

 

Intellon Corp., an Ocala, Fla.-based provider of integrated circuits for high-speed powerline networking, has raised $23.5 million in new VC funding. Comcast Interactive Capital, EnerTech Capital and Liberty Associated Partners co-led the deal, while return backers included Fidelity Ventures, Duchossois TECnology Partners, Hydro-Quebec CapTech, Phillips VC Fund, TL Ventures and UMC Capital Corp. The company now has raised over $115 million in total VC funding since its 1989 inception. www.intellon.com

 

FieldCentrix Inc., an Irvine, Calif.-based provider of wireless and Internet-based field service solutions, has raised $8.9 million in new Series B funding.  Rustic Canyon Ventures led the deal, and was joined by fellow return backers GI Partners, Brentwood Venture Capital, Atrium Capital, Sigma Partners and Piper Jaffray. The company has raised over $65 million via multiple rounds of funding since its 1994 inception.

 

Aventeon Inc., a Bellevue, Wash.-based software provider of mobile business solutions, has raised around $4.5 million in Series A funding. Investors included 3i Group, Intel Capital and Technology Venture Management. www.aventeon.com

 

Veridiem Inc., a Maynard, Mass.-based provider of marketing effectiveness software, has raised $5 million in Series D funding. North Bridge Venture Partners led the deal, and was joined by return backers Venrock Associates, Infinity Capital and North Hill Ventures. The company now has raised around $40 million in total VC funding since its April 1998 inception. www.veridiem.com

 

Tera Systems Inc., a Campbell, Calif.-based provider of RTL handoff technology for IC and systems design, has raised $14 million in third-round VC funding. VantagePoint Venture Partners led the deal, and was joined by return backers Sequoia Capital, Menlo Ventures and Leapfrog Ventures. www.terasystems.com

 

TapRoot Systems Inc., a Morrisville, N.C.-based embedded software company focused on the smart-phone and wireless network markets, has raised $7 million in its first round of institutional funding. Intersouth Partners led the deal, and was joined by Mid-Atlatic Venture Funds. www.TapRootSystems.com

 

180Solutions Inc., a Bellevue, Wash.-based online advertising company, has raised $40 million in first-round funding from Spectrum Equity Investors.

 

The Blackstone Group and Colony Capital have agreed to sell joint portfolio company The Savoy Group for £750 million (approx. $1.37 billion) to an investment group led by Quinlan Private, an international property investment and advisory group. The Savoy Group was originally acquired by Blackstone and Colony in 1998 for £520 million, and both firms have since reinvested in the hotel and restaurant operator. The transaction is expected to close on or before May 8. www.savoygroup.com

 

Wynnchurch Capital Partners and Circle Peak Capital Management have acquired The Steak-Umm Co., a Pomfret Center, Conn.-based maker of branded steak and meat-related retail products. No financial terms of the deal were disclosed, except that Wynnchurch served as lead investor, while Circle Peak, company management and Mass Mutual also provided equity. Senior debt financial came from Bank One. 

 

KRG Capital Partners has acquired Interior Specialists Inc., a provider of outsourced interior design and installation services for homebuilders in the Southwestern U.S. Additional financing was provided by American Capita, Madison Capital Funding and Harris Bank. The management team of ISI also invested alongside KRG Capital, which is a buyout firm based in Denver.  www.isidc.com


Gannett Co. Inc. (NYSE: GCI) acquired the assets of Captivate Network Inc., a McLean, Va.-based provider of news and entertainment programming on television screens in elevators and office towers. No deal terms were disclosed. Captivate has raised over $77 million in VC funding since its 1997 inception, including a $17.5 million infusion in 2001 at a post-money valuation of approximately $99 million. Company investors included ABS Capital Partners, Advent International, Cornerstone Properties, OVP Venture Partners, Primus Venture Partners and Oakstone Venture Partners. www.captivatenetwork.com

 

Memory Pharmaceuticals Corp., a Montvale, N.J.-based drug company focused on the central nervous system, has lowered its IPO offering price range from $13-$15 per share, to $7 per share. The company – which had postponed its offering just two weeks ago — has raised over $70 million in VC funding from investors like Oxford BioScience Partners, Venrock Associates, Bioventures Investors, Alta Partners, OrbiMed Advisors, Global Biomedical Partners and Healthcare Ventures. www.memorypharma.com

 

Xenogen Corp., an Alameda, Calif.-based developer of biochemical reporters that tag genes, cells and microorganisms to monitor biological events, has filed to raise $51.75 million via an IPO of common stock on the Nasdaq under proposed ticker symbol XGEN. The company had originally filed for an $86.25 million IPO in September 2000, but pulled its registration papers the following April. The company has raised over $95 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

 

Shanda Interactive Entertainment Ltd., a Shanghai -based operator of online games in China, has filed to raise $200 million via an IPO of American Depository Shares on the Nasdaq under proposed ticker symbol SNDA. The company has received VC backing from the Softbank Asia Infrastructure Fund. www.shanda.com.cn

 

Advertising.com Inc., a Baltimore-based provider of interactive marketing services, has filed to raise $100 million via an IPO of common stock on the Nasdaq under proposed ticker symbol ADCM. The company has raised over $68 million in VC funding from such firms as Grotech Capital, New Enterprise Associates, RVC Europe and Blue Chip Venture Co. www.advertising.com

 

Paul Stern, co-founder of Arlington Capital Partners and Thayer Capital Partners, has been named non-executive chairman of Claris Holdings LLC, a boutique I-bank and merchant bank.

 

 

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