peHUB Wire: Thursday, September 24, 2009

Every time the peHUB Wire adds another thousand subscribers, I like to remind you that these morning missives are but grains of sand in our vast editorial hourglass. We’ve got more detailed news and views over at, plus in our print pubs: Buyouts, Venture Capital Journal, PE Week and European Venture Capital Journal.

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*** Data Point 1: CalPERS’ alternative asset management unit so far this year has received just 167 investment proposals, and entered into due diligence on only six of them. This compares to 354/31 last year, 441/76 in 2007 and 300/61 in 2006.

*** Data Point 2: PE-backed bankruptcies got off to a fast start this month, with newspaper publisher Freedom Communications filing for Chapter 11 on September 1. It was the 59th private equity-backed company to do so in 2009, compared to just 49 in all of 2008.

It also was the month’s final PE-backed bankruptcy filing (at least so far). Two other companies announced plans to file for bankruptcty protection as part of prepackaged restructurings — NTK Holdings and Lazy Days’ RV Center Inc. — but it’s unclear if either will do so before Sep! tember ends.

*** Name Change: The group of emerging VC fund managers (Fund III or less) calling itself EMERGE, has rebranded itself Venture 2.0.

*** The A123 IPO success is obviously great news for the company’s investors, but I’m not sure how much it will matter to the VC-backed cleantech market in the long term.

A123 is an example of “old” venture-backed cleantech, which focused on capital-intensive manufacturing. “New” venture-backed cleantech looks much more like IT investing, in part because so many of the actual VCs have software backgrounds. Not to say there aren’t exceptions on both sides, but something like EnerNOC is probably a better milemarker than is A123.

*** Entrepreneurs view VCs like voters view Congressmen. They hate ’em all, except for their own. Discuss…

*** Shameless Plug #1: There are fewer than 20 tickets left for our Dallas Shindig on October 14. Get them here. Big thanks to sponsors Landmark Partners, New Capital Partners and StaffOne.

*** Shameless Plug #2: If you are a Boston-area cleantech investor or executive, be sure to attend our discussion of wading through Washington DC’s funding and regulatory thicket. It takes place on October 27 at the Federal St. offices of Bingham McCutchen. More than 100 of you have already signed up, so get your ticket here.

Top Three

A123 Systems, a Watertown, Mass.-based maker of lithium-ion batteries, raised $380.4 million in its IPO. The company sold 28.1 million common shares at $13.50 per share, compared to expectations that it would price 25.68 million shares at between $10 and $11.50 per share (original range was $8.50-$9.50). The company’s initial market cap is $1.32 billion. A123 has raised over $300 million in VC funding, from firms like North Bridge Ventures Partners, General Electric, Qualcomm, Motorola, Procter & Gamble, Alliance Capital, Sequoia Capital, CMEA Capital, FA Technology Ventures, OnPoint, Carruth Management and MIT.

KPS Capital Partners has recapitalized North American Breweries Inc., just a few months after forming the company as an acquisition platform. RBS Citizens served as lead agent and co-book runner for the financing syndicate, whilethe other co-book runner was JP Morgan Chase Bank.

Zogenix Inc., a San Diego-based drug company focused on pain management and CNS disorders, has raised $51 million in new VC funding. Clarus Ventures and Domain Associates co-led the round, and were joined by fellow return backers Scale Venture Partners, Thomas, McNerney & Partners, Oxford Finance Corp. and Abingworth Management. The round is structured with an initial $36 million call-down and $15 million in a second tranche callable by the company’s board. Zogenix canceled an $86.25 million IPO last summer.

VC Deals

RT Outsourcing Services Ltd., an Indian portfolio company of Sonoma Management Partners, has raised $13.5 million in VC funding from New Enterprise Associates.

ReVerb Networks Inc., an Ashburn, Va.-based smart antenna startup, has raised $9 million in Series A funding led by Friedli Corporate Finance.

Certify LLC, a Portland, Maine-based provider of employee expense management software to the SMB market, has raised $1.9 million in angel funding. Backers include Esther Dyson, Irving Levin and former TD BankNorth CEO William Ryan.

Buyouts Deals

The Blackstone Group is considering a bid for Anheuser-Bush InBev’s theme parks, including SeaWorld and Busch Gardens, according to Dow Jones. Blackstone already has theme park holdings, including Universal Orlando.

Marcellus Taylor has acquired United Investment Managers, a Chicago-based emerging manager asset management firm with around $300 million in AUM. No financial terms were disclosed. Taylor previously was co-founder of Erasmus Advisors, a co-investment unit of Dallas-based Aldus Equity. He left Erasmus in 2007, following Deutsche Bank’s acquisition of a stake in Aldus.

Montagu Private Equity has agreed to acquire airfield lighting company ADB Airfield Solutions from Siemens AG. No pricing terms were disclosed for the deal, although Reuters previously reported that Bank of Ireland and West LB were lining up just over $100 million in debt financing.

The UK Takeover Panel has extended the deadline for CVC Capital Partners and Spain’s Cosmen family to make a formal bid on debt-laden bus operator National Express PLC, to Friday. This is the second time the deadline has been extended, in order to allow CVC to complete due diligence.

PE-Backed M&A

Abbott Labs has entered the auction for Solvay SA’s drug unit, which is expected to fetch between €4 billion and €5 billion, according to the Wall Street Journal. This sets up a showdown with fellow bidder Nycomed, a Swiss drugmaker owned by Blackstone Group, CS Private Equity and Nordic Capital.

Cornerstone Records Management, a portfolio company of Sterling Partners, has acquired Simi Valley, Calif.-based Information Management Storage Inc. No financial terms were disclosed.

PE Exits

Permira has sold 19.1 million shares in German phone group Freenet (DE: FNTG), for approximately $261 million. This represents around a 14.9% stake in Freenet, with Permira retaining a 10.1% position.

Firms & Funds

The Riverside Company is raising its first Asia fund, with a focus on small-to-mid-cap buyouts in Greater China. It already has secured around $30 million of its $100 million target.

3i Group shares dropped more than 3% yesterday, after the firm said that disposals made over the past five months were at around the same value as previously assumed.

Human Resources

Phil Cox has joined Silicon Valley Bank as head of operations in the UK, Europe and Israel. Cox previously ran commercial banking for Royal Bank of Scotland in London.

John Ford has joined PR firm Walek & Associates as counsel. He previously was head of media relations and corporate communications for The Blackstone Group.

Virginia Gambale, founder and managing partner of Azimuth Partners, has joined the board of Piper Jaffray Companies.

Steve Pagliuca, a managing director of Bain Capital, has resigned from the Burger King (NYSE: BKC) board of directors, shortly after launching a campaign for U.S. Senate in Massachusetts. Pagliuca has taken a leave of absence from Bain.