Q1 venture capital data is out this morning, and it includes three significant developments. First, venture capital investing reached its highest level in six years, with over $7.05 billion disbursed. Second, biotech (including pharma) was the top sector for the second time in the past three quarters (even though IT still tops healthcare by a 52-37% split). Finally, Southern California-based companies raised more VC funding in Q1 than did New England-based companies, although the latter still had more companies funded.
All of this comes courtesy of the MoneyTree number-crunchers at PricewaterhouseCoopers, National Venture Capital Association and Thomson Financial. Click here for an abundance of downloadable data.
I also plan to keep doing some additional data runs, and posting them throughout the day. First up will be the quarter’s largest deals. For a quick preview, the Top Five are: CardioNet Inc. at $110 million, Amp’d Mobile ($107.55m), HowStuffWorks Inc. ($75m), Imperium Renewables ($70m) and Targanta Therapeutics Inc. ($70m).
*** Goldman Sachs may not have Henry Kravis’ respect, but it does have something else that Kravis covets: The largest private equity fund ever raised.
Goldmanannounced yesterday that it has closed its sixth GS Capital Partners fund with $20 billion in capital commitments, which easily tops the $18.1 billion that Blackstone had raised through its S-1 filing last month. On the other hand, 45% of Goldman’s haul came from itself and its employees, whichraises some obvious questions about the legitimacy of itstop dog status (I’ve already heard scoffing from some other mega-LBO firms).
Either way, the issue will likely be moot in a few months, when Blackstone (finally) closes its fund on a rumored $20.6 billion. If that isn’t the exact final number, I can all but guarantee that it will be at least a few bucks more than $20 billion, because there is no way Schwarzman & company will voluntarily take second place to Goldman.
Which brings us to the point that mega-fund size is more about ego than investment capacity. After all, there isn’t much practical discrepancy between a $15 billion and $20 billion fund — particularly considering how little GP equity really goes into deals nowadays (compared to leverage and, now, LP co-invest). So just keep in mind that any mega-LBO pro who says he doesn’t care about having the largest fund is two things: (1) A liar. (2) Someone who doesn’t (currently) have the largest fund.
*** Finally, it’s been kind of slow on the Internship Drive front, with just a few firms participating so far. So I renew my call: If your firm is looking to hire a first-year MBA candidate for the upcoming year, please let me know via email. Your firm name can be kept confidential (please indicate), with the posting to be viewable to over 1,500 MBA Corner members at peHUB.com. We had over 40 firms when we last did this in December, and I’d like to match that number. There is no cost for this service…
*** On a related note, if you happen to be an MBA candidate still looking for a summer gig, please don’t email me your CV. I’ll send all MBA Forum subscribers an email when the listings are posted. If you still need a school code to access MBA Forum, please contact the head of your private equity club or, if need be, me.
Kleiner Perkins Caufield & Byers announced that it has opened Chinese operations, with a $360 million China fund and offices in Shanghai and Beijing. The China team will include former SAIF partner Joe Zhou, and the entire TDF Capital team, including partners Tina Ju, David Su and Forrest Zhong. www.kpcb.com
Terra Firma Capital Partners, Wellcome Trust and HBOS have abandoned their efforts to acquire Alliance Boots PLC. The move comes after Boots accepted a revised Gbp11.1 billion bid from KKR and Boots chairman Stefano Pessina. Terra Firma’s consortium had initially offered 1,115 pence per share, which trumped an existing 1,090 pence per share offer from KKR/Pessina. The latest KKR/Pessina offer, however, is 1,139 per share.
Lumber Liquidators Inc., a Toano, Va.-based direct retailer of hardwood flooring, has filed for a $150 million IPO. It plans to trade on the NYSE under ticker symbol LL, with Goldman Sachs and Merrill Lynch serving as co-lead underwriters. TA Associates holds a 34.6% pre-IPO position, based on a $35 million private equity infusion in December 2004. www.lumberliquidators.com
XConnect Global Networks Ltd., a London–based provider of peering and ENUM registry services to the telecom industry, has raised $12 million in Series A funding. Accel Partners and Venrock co-led the deal, and were joined by Grazia Equity and Bridge Capital Fund (an affiliate of Nikko Antfactory). www.xconnect.net
RapidMind Inc., a Waterloo, Ontario-based developer of a software development platform, has raised $10 million in Series A. Ventures West led the deal, and was joined by EdgeStone Capital Partners and seed backer BDC Venture Capital. www.rapidmind.com
YouSendIt Inc., a Mountain View, Calif.–based provider of in file delivery software-as-a-service (SaaS) for small and medium-sized businesses, has raised $10 million in Series B funding. Sigma Partners was joined by return backers Alloy Ventures and Sevin Rosen Funds. www.yousendit.com
Lifelock, a Tempe, Ariz.–based provider of online identity management and theft prevention, has raised $6 million in Series B funding led by Kleiner Perkins Caufield & Byers, according to GigaOm. The deal reportedly comes with a post-money valuation in excess of $40 million. No word on if existing Lifelock shareholder Bessemer Venture Partners participated. www.lifelock.com
NearbyNow Inc., a Menlo Park, Calif.-based company focused on helping retailers use the Internet to drive shoppers to offline stores, has raised $5 million in Series B funding from return backers Draper Fisher Jurvetson and Draper Richards. The company raised a $2.5 million Series A round last summer. www.nearbynow.com
CastTV Inc., a San Francisco-based video search startup, has raised $3.1 million in Series A funding. Draper Fisher Jurvetson led the deal, and was joined by angels Marc Andressen, Ron Conway and Rajeev Motwani. www.casttv.com
StageMark Inc., a Pittsburgh-based cell analysis company focused on autoimmune diseases, has raised $1.6 million in Series B funding. BioAdvance Ventures (managed by Quaker BioVentures) and the University City Science Center co-led the deal, and were joined by return backers BlueTree Capital Partners, Innovation Works, Meyer Ventures and the Pittsburgh Life Sciences Greenhouse. www.stagemarkinc.com
Volicon Inc., a Burlington, Mass.-based provider of digital video recording and broadcast monitoring, has raised $1.1 million in Series B funding, according to a regulatory filing. Shareholders include Globespan Capital Partners, Naftali Investments Ltd. and Brookline Venture Partners. www.volicon.com
Affiliated Computer Services Inc. (NYSE: ACS) has received an increased buyout bid from Cerberus Capital Management and ACS founder and chairman Darwin Deason. The revised price is $62 per share, compared to an original offer of $59.25 per share. The overall deal would be valued in excess of $6 billion. www.acs-inc.com
Crestview Partners has agreed to acquire Symbion Inc. (Nasdaq: SMBI), a Nashville, Tenn.–based owner and operator of short stay surgical facilities. The deal is valued at $22.35 per share in cash (17.4% premium to yesterday’s closing price), for a total transaction value of approximately $637 million (including assumed debt). www.symbion.com
Ontario Teachers’ Pension Plan is still on the fence about making a bid for Bell Canada parent BCE, according to The Financial Post.
J.C. Flowers & Co. and FPK Capital have agreed to acquire around a 25% stake in Encore Capital Group Inc. (Nasdaq: ECPG), a San Diego-based purchaser and manager of charged-off consumer receivables portfolios. The deal is structured as a purchase of around 5.74 million shares of common stock, from sellers C.P. International Invesmtents Ltd., Triarc Cos. and related third-parties. In a separate transaction, Red Mountain Capital Partners acquired approximately 15% of Encore’s outstanding common stock. www.encorecapitalgroup.com
Brown-Forman Corp. (NYSE: BFA, BFB) has agreed to sell substantially all of the assets of its Hartmann luggage and leather goods business to Clarion Capital Partners. No financial terms were disclosed. SunTrust Robinson Humphrey advised Brown-Forman on the sale. The Hartmann luggage brand was founded in 1877, and acquired by Brown-Forman in 1983. www.clarion-capital.com www.brown-forman.com
Gordon Brothers Group has acquired the brand and other assets of Rugged Shark, a line of high-end performance footwear for boating and other outdoor uses. No financial terms were disclosed.
Aecom Technology Corp., a Los Angeles-based provider of technical and management support services, set its proposed IPO terms to 35.15 million common shares being offered at between $18 and $20 per share. It plans to trade on the NYSE under ticker symbol ACM, with Morgan Stanley, Merrill Lynch and UBS serving as co-lead underwriters. Shareholders include U.S. Trust (29.86% pre-IPO stake), GSO Capital Partners (10.68%), J.H. Whitney & Co. (10.68%), CalPERS/PCG Corporate Partners (3.74%), JPMorgan Partners and Weston Presidio. www.aecom.com
Biofuel Energy Corp., a Denver-based ethanol producer, set its proposed IPO terms to 9.5 million common shares at between $16 and $18 per share. It had originally filed to raise $300 million, and plans to trade on the Nasdaq under ticker symbol BIOF. JPMorgan, Citigroup and A.G. Edwards are serving as co-lead underwriters. Shareholders include Greenlight Capital, Third Point Partners and Cargill Inc. Biofuel Energy initially plans to construct five large dry-mill ethanol plants on corn-belt sites where Cargill has a strong local presence and, in most cases, adjacent to grain storage facilities owned by or affiliated with them. www.bfenergy.com
Infor Global Solutions, a portfolio company of Golden Gate Capital, has agreed to acquire Workbrain Corp. (TSX: WB), a Toronto-based provider of workforce management software. Workbrain stockholders would receive Cnd$12.50 per share, for a total transaction value of approximately Cnd$227 million. www.infor.com www.workbrain.com
CIC Partners has acquired and merged two Oregon-based onion growers/processors: American Onion Inc. and Rivergate Farms LLC. The combined company will be named River Point Farms. No financial terms were disclosed. www.cicpartnerslp.com
Responsys Inc., a Redwood City, Calif.-based provider of on-demand email and marketing automation solutions, has acquired Loyalty Matrix, a San Francisco-based provider of predictive analytics and contact optimization solutions. No financial terms were disclosed. Responsys has raised around $62.4 million in VC funding since 1998, from firms like Accel Partners, Foundation Capital, Lighthouse Capital Partners, RB Webber & Co., RSA Capital, Redpoint Ventures, Sigma Partners and Windspeed Ventures. www.responsys.com www.loyaltymatrix.com
Netsmart Technologies Inc., a Great River, N.Y.-based provider of enterprise-wide software and services for health and human services organizations, has acquired the behavioral health assets of MainTree Systems. No financial terms were disclosed. Netsmart was acquired last November for $115 million by Bessemer Venture Partners and Insight Venture Partners. www.ntst.com www.maintree.com
Business Objects (Nasdaq: BOBJ) has agreed to acquire Cartesis SA, a France–based provider of enterprise performance management software. The deal is valued at €225 million, and is expected to close within 30 days. Cartesis was spun out of PwC in 2004, with the backing of Apax Partners, Advent Venture Partners, CDP Capital Technology Ventures and Partech International. www.businessobjects.com www.cartesis.com
The Carlyle Group has agreed to sell its stake in Rhythm Corp., a Japanese auto parts maker it acquired by sponsoring a management buyout in 2004. The buyer is THK Co Ltd., which will acquire 100% of Rhythm’s outstanding shares. No financial terms were disclosed for the deal, which is expected to close at the end of May. www.carlyle.com www.thk.com
3i has agreed to sell Extec Screens and Crushers Ltd., a UK-based maker of mobile crushing and screening equipment, to Sandvik (STO:SAND). No financial terms were disclosed. www.extecscreens.com
Constellation Energy Partners LLC (NYSE Arca: CEP) has closed its acquisition of certain coalbed methane properties from EnergyQuest Resources LP, a portfolio company of Quantum Energy Partners. The deal was valued at approximately $115 million. www.constellationenergypartners.com www.quantumep.com
Silver Ventures has agreed to sell salsa and taco sauce maker San Antonio Farms to TreeHouse Foods Inc. (NYSE: THS). The deal is valued at $88.5 million in cash, and is expected to close within 45 days. It will be financed via borrowing under TreeHouse’s existing $500 million credit facility. www.treehousefoods.com
Overseas Shipholding Group Inc. (NYSE: OSG) has acquired the Heidmar lightering business of Heidmar Inc., a portfolio company of Morgan Stanley Capital Group, for approximately $41 million. The acquired business includes a fleet of four tankers and two workboats that provide crude oil lightering services to refiners, oil companies and trading companies. It will be renamed OSG Lighting. www.osg.com www.heidmar.com
Firms & Funds
Activa Capital of France has closed its second buyout fund with €315 million in capital commitments. The firm has a generalist strategy, with a particular interest in businesses within the following sectors: Food and consumer goods, healthcare/pharma and business/support services. www.activacapital.com
Christian & Timbers, an executive search firm, has renamed itself CTPartners. www.ctnet.com
The Aurora Funds has promoted Jan Bouten to principal. He joined the firm in 2003, and was promoted to senior associate in 2005. www.aurorafunds.com
Kent McNellie and Steven Muns have joined Hunt Special Situations Group as senior associates. McNellie previously was an associate with Booz Allen Hamilton and, before that, was an analyst with First Reserve. Muns previously managed investment activities for Cox Oil LLC and, before that, was a portfolio manager on the distressed team at hedge fund Highland Capital Management. www.huntssg.com