PE Week Wire: Wed., July 18, 2007

I spent most of yesterday in Washington D.C. (or at least in the corporate sprawl Tyson’s Corner), and got to feeling a bit political. Specifically, I was interested to know if Mitt Romney had maintained his Q1 lead in terms of campaign contributions from the private equity community. The Wall Street Journal already had a piece about this, but it only analyzed data from the Private Equity Council’s rarified membership. Maybe the writer was busy preparing for his next gig as Page 3 Girl caption writer…

Anyway, I went a bit deeper – looking in the Federal Election Commission database for contributions from professionals at private equity firms investing out of funds with $500 million or more. I excluded venture capitalists and hedge fund managers, and also private equity pros who work within investment banks (too difficult to sort out who was who). The result was a list 190 professionals who contributed a total of $363,307 between April and June. There also were some additional contributions to general election campaigns, but we’re just talking primary campaign donations today.

The big surprise is that Q1 leader Mitt Romney not only fell off his perch, but that he dropped to third. Barrack Obama took the top spot, with $70,850 from 39 professionals. Rudy Giuliani came in second withy $67,400 from 33 pros, while Romney placed show with $65,875 from 41 pros.

Actually, perhaps Romney’s fall is not as surprising as Chris Dodd’s ascent. He came in fourth with an astounding $59,332 from 31 pros – including more than $20,000 from Blackstone Group employees like Tony James and Garrett Moran.

Next up was Hillary Clinton with $35,300 from 19 pros, while John McCain ($15,650), Bill Richardson ($11,450) and Joe Biden ($8,900) rounded out the back.

It’s important to note that many of the above donations were made before the carried interest tax issue really broke into the mainstream, and certainly before Obama and Clinton came out in favor of changing treatment from capital gains to ordinary income. As of last check, Dodd was still hedging on the issue. I spoke to his spokeswoman this morning, who said she’d get back to me both on his position (if any) and how/why he ramped up his fundraising among PE pros.

I’ve posted the entire list of Q2 donations at peHUB, in a speadsheet that is searchable by contributor name, firm name and candidate.

Top Three

Satiety Inc., a Palo Alto, Calif.-based developer of a transoral procedure designed to achieve similar weight loss to bariatric surgeries, has raised $30 million in Series D funding. Skyline Ventures led the deal, and was joined by HLM Venture Partners, Pinnacle Ventures and return backers Venrock, Three Arch Partners, Morgenthaler Ventures and Thomas Fogarty. Satiety now has raised a total of over $61 million, including a Series C infusion in 2005 at a post-money valuation of approximately $38 million.

Dice Holdings Inc., an Urbandale, Iowa–based provider of specialized career sites and career fairs, raised $217.1 million via its IPO. The company priced 16.7 million common shares at $13 per share ($11-$13 range), which gave it an initial valuation of around $805.5 million. It will trade on the NYSE under ticker symbol DHX, with Credit Suisse and Morgan Stanley served as co-lead underwriters. Dice had been owned by General Atlantic and Quadrangle Group since August 2005, with both firms selling some shares as part of the offering.

Vector Capital has closed its fourth fund with $1.2 billion in capital commitments. The San Francisco-based firm closed its prior fund with around $350 million in 2004, but decided to bulk up after more and more of its deals required large co-investments from limited partners. For example, Vector provided a $60 million equity check when taking Corel Corp. private in August 2003 – but only $20 million came from Vector’s actual fund. In other words, it decided to raise additional fund capital so all of its LPs could gain substantially from future returns, rather than just those with co-investment programs.

VC Deals

SAGE Electrochromics Inc., a Faribault, Minn.-based developer of electrochromic smart window products for buildings, has raised $16 million in Series B funding. Good Energies led the deal, and was joined by return backers Applied Ventures and Bekaert.

Ablation Frontiers Inc., a Carlsbad, Calif.-based medical device company focused on developing treatments for irregular heart rhythms, has raised $21.8 million in Series C funding. Novartis Venture Fund led the deal, and was joined by Affinity Ventures, Hexagon Investments and Trellis Health Ventures. Return backers included Versant Ventures, Aberdare Ventures and Pequot Ventures. The company has raised $40.3 million in total VC funding since its 2004 inception.

RF Code Inc., a provider of RFID data management software, has raised $13 million in Series C funding. Backers include QuestMark Partners, Intel Capital and Hunt Holdings. The company also announced that it has moved its headquarters from Mesa, Ariz. to Austin, Texas.

Redfin Corp., a Seattle-based online real estate broker, has raised $12 million in Series C funding. Draper Fisher Jurvetson led the deal, and was joined by return backers Madrona Venture Group, BEV Capital, Vulcan Capital and The Hillman Company. Redfin has raised $20.8 million in total VC funding since its 2002 inception.

Symwave Inc., a San Diego-based developer of analog and mixed-signal ICs, has raised $12 million in Series C funding. Kodiak Venture Partners led the deal, and was joined by return backers CMEA Ventures, JAFCO Ventures, Revolution Ventures and RPM Ventures. The company has raised around $19 million in total VC funding since its 2001 inception.

Kirusa Inc., a Mumbai-based voice SMS company, has raised $10 million in Series C funding. Helion Venture Partners and Nexus India Capital co-led the deal.

NextHop Technologies Inc., a Mountain View, Calif.-based provider of enterprise mobility and networking solutions, has raised $4 million in Series D funding. Return backers include New Enterprise Associates, Duchossois Technology Partners, Labrador Ventures and Parker Price Venture Capital. NextHop has raised $45.8 million in total VC funding since its 2000 inception.

Star Analytics, a Palo Alto, Calif.-based provider of software that automates the integration and sharing of data for business analysis and financial reporting, has raised $3.5 million in Series A funding. Hummer Winblad Venture Partners and Lightspeed Venture Partners co-led the deal., a New York-based online travel startup, has raised $1.25 million in Series A funding led by Ascend Venture Group. The company’s website recently launched its beta, and is designed to connect consumer travelers with specialized travel agents.

Buyout Deals

JER Partners has completed its take-private buyout of Highland Hospitality Corp. (previously NYSE: HIH), a McLean, Va.–based owner of 28 luxury-brand and limited-service hotels. The total deal was valued at $2.1 billion – including $210 million of assumed debt – with Highland shareholders receiving $19.50 per share.

Sun Capital Partners has completed its acquisition of the fabrics division of Interface Inc. (Nasdaq: IFSIA). The transaction was valued at up to $70 million, including a $63.5 million up-front cash payment. The fabrics division makes interior fabrics and upholstery products for automobiles, and markets under the Guilford of Maine, Chatham and Terratex brands, and provides specialized automotive textile solutions.

Sun Capital Partners has acquired specialty food retailer Hickory Farms Inc. from Juniper Partners for an undisclosed amount. Harris Williams advised Hickory Farms on the sale.

Mid Europa Partners and Rail World Inc. are teaming up to bid on MAV Cargo, the freight division of Hungarian state-owned railway MAV.

Behavioral Centers of America of Nashville, Tenn. has received a private equity infusion from Linden LLC of Chicago. No financial terms were disclosed, but LBO Wire pegs the amount at $40 million. Avondale Partners advised BCA on the deal.

Maxus Capital Group, a Cleveland–based provider of capital equipment leasing services to mid-market companies, has received a $100 million credit facility and undisclosed amount of equity financing from Morgan Stanley.

Inspire Pharmaceuticals Inc. (Nasdaq: ISPH) has agreed to sell $75 million worth of exchangeable preferred stock to Warburg Pincus. The deal is based on a price of $5.35 per common share, and is expected to close this week. Inspire will use the proceeds to fund the commercialization of its AzaSite compound for bacterial conjunctivitis, plus several Phase 3 development projects, working capital and general corporate purposes.

PE-Backed IPOs

Amedica Corp., a Salt Lake City-based maker of orthopedic implants, has set its IPO terms to 4.65 million common shares being offered at between $13 and $15 per share. It would be valued at approximately $230 million, if it were to price at the top of its proposed range. Amedica plans to trade on the Nasdaq under ticker symbol AMCA, with Morgan Stanley serving as lead underwriter. The company has raised over $44 million in total funding since November 2003, including a $13.2 million Series D round earlier this month. Shareholders include Vestal Venture Capital and Creation Capital.

PE Exits

XOS Technologies Inc., a Sanford, Fla.-based provider of multimedia technologies for professional and collegiate sports organizations, has sold its broadband network unit to JumpTV Inc. (AIM/TSX: JTV), for $60.25 million. XOS has raised around $42 million in VC funding from firms like Beechtree Capital, Blue Chip Venture Co., Comcast Interactive Capital and Dorchester Capital.

PE-Backed M&A

Baja Fresh Mexican Grill, a Thousand Oaks, Calif.-based Mexican quick-service restaurant operator, has completed its acquisition of La Salsa Fresh Mexican Grill from CKE Restaurants Inc. No financial terms were disclosed. Baja Fresh was acquired late last year by GarMark Advisors, M Plus Capital and David Kim.

Cutters Wireline Service Inc., a Vernal, Utah-based provider of cased-hole electric wireline services to natural gas and oil companies in the Rocky Mountain region, has acquired competitor Lone Wolf Wireline Inc. No financial terms were disclosed. Cutters is a portfolio company of Lincolnshire Management.

Restaurants Unlimited Inc., a restaurant operator owned by Sun Capital Partners, has acquired Pacific Coast Restaurants Inc., a Portland, Ore.-based operator of 27 restaurants in Oregon, Washington and California. The deal nearly doubles the size of Restaurants Unlimited, which previously owned 29 locations, including 14 Kincaid’s and nine Palomino’s.

Firms & Funds

Spark Capital has closed its second fund with $360 million in capital commitments. The Boston-based venture firm raised $262 million for its inaugural fund in 2005, and focuses on the conflux of the media, entertainment and technology industries.

Lehman Brothers has raised $500 million by floating a private equity fund-of-funds on the Euronext Amsterdam. It priced 50 million shares at $10 per share, with a greenshoe option for an additional five million shares.

Deerfield Triarc Capital Corp. (NYSE: DFR) has closed a $300 million mid-market CLO fund.

Highway 12 Ventures, a Boise, Idaho-based regional VC firm, has closed its second fund with $75 million, according to VentureWire.

Human Resources

Richard Vinci has joined First National Investment Banking (FNIB) as senior managing director of M&A. He previously was a managing director with Newbury Piret &Company.

Sorenson Capital Partners and Peterson Partners have completed their $21.50 per share buyout of institutional furniture maker MITY Enterprises Inc.

Don MacKenzie has joined Polaris Venture Partners as chief financial officer. He previously served as chief operating officer with Atlas Venture.

The Aurora Funds has promoted both Chris Kroeger and Grant Jackson to the position of partner. Kroeger joined Aurora in September 2003 as an associate and was promoted to principal in 2005. Jackson joined Aurora in May 2004 as a senior associate and was promoted to principal in 2005.

ABS Capital Partners has promoted Paul Mariani to principal. He previously was a senior associate, and joined the firm’s San Francisco office in 2003.

Paolo Gesess has joined 360 Capital Partners as a partner. He previously was co-founder of Juniper Ventures.

David Molowa has joined MPM BioEquities as a general partner based in New York. He previously was with Venrock and served as a strategic advisor to Amgen. MPM BioEquities is a private fund that invests in public biotech companies and, to a lesser extent, private biotech companies.

James Fisher has joined Praesidian Capital Investors as a partner. He previously led the transfer and integration of Callidus Capital Finance to AC Finance (Allied Capital), where he served as senior managing director.

StepStone Group LLC, a La Jolla, Calif.-based provider of private equity investment management and advisory services, has made five new hires: Scott Hart as a senior associate (previously with TPG), Erika Streck as an associate (Allied Capital), John Coelho as an associate (ATEL Capital Group), John Kettnich as an analyst (Pacific Corporate Group) and Anthony Cusano as an analyst (Meridian Value Fund). All five will be members of StepStone’s research and due diligence team.