PE Week Wire: Wed., June 20, 2007

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*** Today’s big private equity happenings are in the UK, where five mega-firm buyout chiefs have just sat down to get grilled by members of the Treasury Select Committee. Amanda is covering the event for peHUB, while I discussed it this morning on CNBC.

This hearing is one in a series, which will deal with issues like carried interest taxation and pension scheme guarantees. The first one came last week, with members of the BVCA beaten so badly that president Peter Linthwaite resigned less than 24 hours later. Today’s group is expected to do slightly better, but there still are very few bulletproof explanations for why mega-buyout firms deserve capital gains treatment for profits based on investment capital from limited partners.

Please note that I said “mega-firms,” because many VCs and mid-market buyout pros have made relatively persuasive arguments based on theories of economic development. In fact, there has been talk that the BVCA is preparing to split up into two organizations – after concerns were voiced that the group is being dominated by mega-firms at the expense of its less endowed peers.

**** Speaking of that dichotomy: How long until small and middle-market buyout firms in the U.S. form a trade association of their own? VCs have the NVCA. Mega-firms recently formed the PEC (which just added some lobbying heft on the tax issue). But the vast middle class is left without representation…

*** Denise has a new column up in our Careers section, on the summer recruiting season.

Top Three

Madison Dearborn Partners has agreed to acquire Nuveen Investments Inc. (NYSE: JNC), a Chicago–based provider of diversified investment services to institutional and high-net-worth investors. The total deal is valued at $6.3 billion (including $550 million in existing debt), with Nuveen stockholders to receive $65 per share in cash (20% premium to yesterday’s closing price). In other Nuveen news, the company announced that president John Amboian will succeed Timothy Schwertfeger as CEO, effective July 1.

Jentro Technologies GmbH, a Munich, Germany-based provider of location-based mobile software and services, has raised $29 million in Series A funding. New Enterprise Associates led the deal, with a $28 million investment, with NEA partners Ravi Viswanathan and Paul Hsiao joining the Jentro board of directors.

Roche has agreed to acquire Nimblegen Systems Inc., a Madison, Wis.-based maker of microarrays for the life sciences market, for $272.5 million. The deal comes shortly after Nimblegen had filed for a $75 million IPO, and represents more immediate liquidity for shareholders like Skyline Ventures (14.04%), Cargill Ventures (13.37%), Schott AG (12.71%), Brookside Capital Partners (7.77%), Venture Investors LLC (6.55%), the State of Wisconsin Investment Board and Baird Venture Partners. Nimblegen had raised around $66 million in VC funding since 2000.

VC Deals

SiPort Inc., a Santa Clara, Calif.-based developer of digital radio semiconductors, has raised $20.5 million in Series B funding, according to a regulatory filing. Shareholders include New Venture Partners, Intel Capital, Lightspeed Venture Partners and Morgenthaler.

Prosper Marketplace Inc., a San Francisco-based P2P loan company, has raised $20 million in Series C funding. DAG Ventures and Meritech Capital Partners co-led the deal, and were joined by return backers Accel Partners, Benchmark Capital, Fidelity Ventures and Omidyar Network. Prosper has raised $40 million in total VC funding since 2005.

Right90 Inc., a Santa Clara, Calif.-based provider of performance management systems, has secured $11 million of a $12.27 million Series B round, according to a regulatory filing. InterWest Partners joined return backers Shasta Ventures and U.S. Venture Partners.

Elitecore Technologies Ltd., an Ahmedabad, India-based provider of Internet security and convergent billing solutions, has raised $10.3 million from The Carlyle Group.

4Info Inc., a Palo Alto, Calif.-based mobile search company, has raised $10 million in Series D funding. Gannett Co. led the deal, and was joined by Sand Hill Capital and return backers Draper Fisher Jurvetson and U.S. Venture Partners.

Gentis Inc., a Philadelphia-based developer of in-situ polymerizing spinal nucleus augmentation technology, has raised $10 million in first-round funding. Pappas Ventures and Easton Capital co-led the deal, and were joined by Ivy Capital Partners and Matignon Technologies. Gentis was incubated by MentorTech Ventures, which retains an ownership stake.

Apptera Inc., a San Bruno, Calif.-based developer of speech recognition solutions, has called down $9.74 million of a $14.74 million Series D round, according to a regulatory filing. Return backers include Alloy Ventures, Lightspeed Venture Partners and Walden International.

Arteris Inc., a French provider of network-on-a-chip solutions, has raised $8.1 million in Series B funding. Synopsys Inc. led the deal, and was joined by return backers Crescendo Ventures, TVM Capital and Ventech. As part of the deal, Arteris has reincorporated in the U.S., with headquarters in San Jose, California and a French subsidiary in Paris.

SupplyFrame Inc., a Pasadena, Calif.-based vertical search engine for electronic components, has raised $7 million in Series B funding. U.S. Venture Partners led the deal, and was joined by return backers Clearstone Venture Partners and Arcturus Capital., a San Francisco-based provider of healthcare information services, has raised $6.1 million in first-round funding from company founders and management. The startup purchased the domain last year, and will eventually will provide consumers with such functionality as vertical search, online medical records and community features.

VHT Inc., a Des Plaines, Ill.–based provider of video marketing and related services to the real estate industry, has raised $3.8 million in Series B funding led by Hopewell Ventures.

Recommended Reading Inc., a Bethesda, Md.-based developer of a search engine that operates on user recommendations, has raised $1.55 million in Series A funding led by Intersouth Partners, according to a regulatory filing.

Buyout Deals

Bain Capital, The Carlyle Group and Clayton, Dubilier & Rice announced the signing of a definitive agreement with The Home Depot to acquire its wholesale distribution business, HD Supply, for $10.3 billion. Bain, Carlyle and CD&R will invest equal amounts of equity in the transaction.

Candover is in talks to acquire Stork, a Dutch maker of food processing equipment. Candover reportedly has offered €47 per share, which would value the company at approximately €1.5 billion. ABN Amro is advising Stork.

BC Partners has agreed to acquire a 76% stake in Bermuda-based communications satellite operator Intelsat for approximately $4.6 billion. The deal values Intelsat’s equity at around $5.03 billion, but its overall market value is $16.4 billion, once debt is included. Other reported suitors had included Providence Equity Partners, Carlyle Group and Macquarie Bank.

Norwest Equity Partners has completed its sale of Des Moines, Iowa-based logistics company Jacobson Cos. to Oak Hill Capital Partners. No financial terms were disclosed. Norwest and Jacobson management together rolled over a portion of their proceeds, resulting in a 20% post-close ownership position. Norwest acquired Jacobson in 2004, and since has made several add-on acquisitions.

Archer Capital and Ironbridge Capital have agreed to buy Australian healthcare firm Symbion Health Ltd. for Au$2.8 billion.

The Riverside Company has acquired American Home Inspectors Training Institute, a Waukesha, Wis.-based provider of home inspection products, services and education to home inspectors. No financial terms were disclosed for the deal, which was made out of Riverside’s Micro-Cap Fund.

TA Associates hascompleted its acquisition of UK-based fund manager Jupiter Asset Management from Commerzbank for justunder $1.47 billion.

PE-Backed IPOs

Amsterdam Molecular Therapeutics Holding BV, a Dutch gene therapy company, has set its proposed IPO terms to five million common shares being offered at €10 per share. The company plans to trade on the Euronext, and would be valued at nearly €140 million. It raised a €22 million Series A round last fall from ABN Amro Capital, Advent Venture Partners, Gilde Healthcare Partners and Crédit Agricole Private Equity.

PE Exits

Barclays Private Equity has agreed to sell German HR services provider Tuja Group to Adecco for approximately €800 million (including €200 million of assumed debt). Barclays acquired 90% of Tuja in early 2006 from Odewald & Compagnie.

Getty Images has agreed to acquire Pump Audio LLC, a Tivoli, N.Y.-based digital agent for independent musicians, for $42 million. Pump Audio raised a $2.5 million Series A round in early 2006 from by Greycroft Partners and High Peaks Venture Partners, while Village Ventures is also listed as a shareholder.

Humana Inc. (NYSE: HUM) has agreed to acquire CompBenefits Corp., a Roswell, Ga.-based provider of dental and vision benefit plans, for $360 million in cash. CompBenefits filed for a $150 million IPO in December, and listed shareholders TA Associates (24.05%), GTCR (19.25%), Nautic Partners (11.49%) and Wolverine Investment (10.42%).

Petroleum Geo-Services ASA (NYSE: PGS) has agreed to acquire MTEM Ltd., a UK-based provider of electromagnetic mapping services for onshore and offshore oil and gas reservoirs. The deal is valued at $275 million. MTEM shareholders include HitecVision Private Equity and Scottish Equity Partners.

Sandvine Corp. (TSX: SVC) has acquired CableMatrix Technologies Inc., an Isreal-based provider of quality assurance solutions for broadband Internet service. It also has agreed to acquire Simplicita Software Inc., a Denver-based provider of automated security software. The deal are worth a combined $9 million, including $4.5 million in cash, 0.9 million Sandvine common shares and an earn-out of 0.6 million additional shares. CableMetric shareholders include EnerTech Capital Partners, Intel Capital, Veritas Venture Partners and Walden Israel. Simplicita shareholders include FFP Holdings.

Volt Information Sciences Inc. (NYSE: VOL) has agreed to acquire LSSi Corp., an Edison, N.J.–based provider of a national database for the directory assistance market. The deal is valued at approximately $70 million in cash. LSSI has raised around $74 million in total VC funding since 1996. Current shareholders include Warburg Pincus, Granite Ventures and Georgica Advisors.

Wolstenholme Group Ltd., a portfolio company of Rutland Partners, has sold its metallic effect pigment and metallic printing ink business to Eckart GmbH and Co. KG. The deal is worth up to £22 million, including a £20 million up-front payment. Wolstenholme will retain its black dispersions business in the U.S. and Ronald Britton in the U.K. In addition, Wolstenholme has agreed to manufacture certain products on behalf of Eckart for up to the next 18 months.

PE-Backed M&A

Alta Partners has purchased 9.8 million shares of ATS Medical Inc. (Nasdaq: ATSI) common stock at $1.65 per share, in order to help finance ATS’ acquisition of the surgical cryoablation business of CryoCath Technologies Inc. (TSX: CYT). Alta also will receive a warrant to purchase an additional 1.96 million shares at $1.65 per share. The initial PIPE gives it an ownership stake in excess of 15 percent.

LVI Services Inc., a New York-based provider of environmental remediation and facility services, has acquired Mazzocchi Wrecking Inc., an East Hanover, N.J. demolition and wrecking company. No financial terms were disclosed. LVI is a portfolio company of Code Hennessey & Simmons.

Firms & Funds

Arch Venture Partners of Chicago is raising up to $400 million for its seventh fund, according to a regulatory filing.

The Blackstone Group is expecting to price its IPO tomorrow night. It had originally expected to price next week, or possibly delay/cancel due to the pending legislation that would require publicly-traded partnerships to be taxed as if they were corporations.

Vista Equity Partners of San Francisco is raising its third fund with a $1.1 billion hard cap, according to LBO Wire. Its previous fund closed on $1 billion in 2000.

Human Resources

Bo Shao has joined Matrix Partners as a general partner, where he will work out of Hong Kong and focus on Matrix’s China strategy and investments. Shao was the founder and CEO of Chinese ecommerce company EachNet, and also co-founded both BabyTree and Novamed Pharmaceuticals (where he remains chairman).

Jaime Guzman-Fournier has joined StepStone Group (f.k.a. Leucadia Capital Partners) as a managing director. He previously was head of the SBIC program, where he oversaw 75 professionals and a $20 billion investment portfolio.

Grant Allen has joined Core Capital Partners as an associate. He previously held positions at Liberty Associated Partners and Microsoft.

John Spencer has joined Palisades Capital Advisors as a managing director, responsible for the firm’s restructuring advisory and pension liability risk management services. He previously was a director of the Pension Benefit Guaranty Corp.’s department of insurance supervision and compliance. He also ran its corporate finance and negotiations group.

Jamie Streator has joined Cowen Group Inc. as a managing director focused on life sciences companies. He previously was a managing director and head of healthcare investments at Susquehanna Financial Group.

Avi Turetsky has joined The Riverside Company as assistant director for fundraising and investor relations. He previously was with Goldsmith Agio Helms.