Private Equity Week Wire for Monday 6/4

CHICAGO — William Blair Capital Partners (“WBCP”) recently held a
final closing of more than $400 million on William Blair Capital Partners VII (“WBCP VII”),
exceeding that of its predecessor partnership raised in 1998 by nearly 50%. WBCP invests
across the full spectrum of private equity situations — venture capital and later stage
investments, including management buyouts and recapitalizations. WBCP VII intends to
invest between $7 million and $30 million in 20 to 30 growth companies in the business
and consumer services, information technology and healthcare industries.


BOULDER, CO — iWitness Inc., provider of Digital Business
Records Management software, today announced that it has secured an additional $11
million in venture financing led by Sequel Venture Partners of Boulder, Colo. Other
participants include Dresdner Kleinwort Capital (75 Wall Street Technology Partners LP) of
New York, NY, and all first-round investors: Telesoft Partners, San Mateo, Calif., Geneva
Venture Partners, San Francisco, Calif., and Wolf Ventures, Denver, Colo. Proceeds will
enable the growing company to expand its executive team and will fund research and
development, marketing, and sales efforts. iWitness also named two new members to the
Board of Directors and three additional members to its executive team.

MINNEAPOLIS — Adaytum, a leading provider of enterprise
business planning (EBP) solutions, today announced it has closed a $7.4 million round of
preferred stock venture financing.

The investment was led by St. Paul Venture Capital, with additional participation from 3i
Group, Accenture, American Express, and J.P. Morgan/H&Q — all current Adaytum
investors. Proceeds from the round will be used by the company to continue its worldwide
growth in sales, marketing, branding, consulting, and product development.


DENVER — SafeRent Inc., the leading provider of online credit and
risk management services to the apartment industry, announced today that it has closed
$13.4 million in equity financing. This third and likely final round increases the company’s
total capital to more than $21 million raised since inception. SafeRent’s new investors include AvalonBay Communities, Inc.; Internet Realty Partners,
L.P., Cohen & Steers Capital Management’s real estate technology investment fund; and
Inter-Atlantic Fund. They were joined by previous investors Boulder Ventures, Limited,
Mellon Ventures, Inc., Roser Ventures, Hexagon Investments, Potomac Ventures, and
Archstone Communities, who continue to support the company.

WAYNE, PA & FAIRFAX, VA — Safeguard Scientifics Inc. (NYSE: SFE), a leader in developing and
operating emerging technology companies and SRA International, Inc., an
information technology firm that provides services and solutions to business
and government, today announced first round funding for Mantas, Inc.

Mantas is the first spin-off of SRA Ventures, LLC, a joint venture company
formed by Safeguard and SRA. Mantas will provide business intelligence
solutions for exchanges and the financial services industry.

ANDOVER, MA — HydroCision Inc. announced today it has received $2 million in a second
round of private financing from Oxford Bioscience Partners (www.oxbio.com), a
leading life sciences- and medical technology-focused venture capital firm
headquartered in Boston. Previously, HydroCision raised the first $5.5
million of a $7.5 million financing through an investment led by Oxford
Bioscience Partners. This final $2 million investment from Oxford Bioscience
resulted from HydroCision’s meeting certain milestones.

HEATHROW, FL — Despite a difficult first quarter for venture capital funding in the technology sector, Cytura Corporation announced a $11M round of venture capital. Cytura provides the first
XML-based enterprise-class content management and personalization-driven portal framework that enables global organizations to syndicate personalized Web services and
content. The financing was provided by Noro-Moseley Partners, based in Atlanta, Ga., and Lovett Miller of Tampa, Fla., and is the first institutional venture capital financing for
the company. Allen Moseley of Noro-Moseley and W. Scott Miller of Lovett Miller will join the company’s board of directors.


SANTA CLARA, CA — NuCORE Technology Inc. received $20 million in its third round of financing led by Sigma Partners and
JAFCO Co., Ltd., Tokyo. Investors from earlier financing rounds, including Horizon Ventures, J.P. Morgan Partners and Techfund, also participated. This brings NuCORE’s
total equity financing to date to $32 million. In addition, NuCORE added Lawrence (Larry) G. Finch from Sigma Partners and Jack Carsten from Horizon Ventures to its board of
directors. NuCORE is a developer of leading-edge digital imaging chips for still and video cameras.

NEW YORK — Standard & Poor’s has rated the first structured notes issued by a leveraged fund and
backed by pools of private equity investments. The transaction, Prime Edge Capital PLC, totaled 150 million euros; the rated senior notes have a stated maturity of 12 years and the
unrated junior notes have a maturity of 24 years.
The transaction was rated ‘AA’ by Standard & Poor’s based on an insurance wrap by Allianz Risk Transfer N.V. The insurance policy was not required by Standard & Poor’s
and, without this policy, the deal’s two senior tranches would have received ‘A’ and ‘BBB’ ratings.
“This is the first transaction of its kind ever assigned a public rating,” said Soody Nelson, managing director and head of Standard & Poor’s Structured Finance market value
group. “Despite the characteristics of the private equity markets–including high return volatility and illiquidity–we were able to rate this transaction by basing our analysis on the
simulated net asset value of the investments the fund will be making and using various benchmark indices as proxies for expected returns on private equities.”

AUSTIN, TEXAS — Banderacom, a leading fabless InfiniBand semiconductor company, today announced $35 million in second-round venture capital funding. Lead investor Infinity
Venture Capital LLC joins well-known venture capital and technology leaders Austin Ventures, Crossroads Systems, Intel, Jato Tech Ventures, QLogic Corporation and Trinity
Venture Capital as Banderacom’s second-round investors.
Austin Ventures, Crossroads Systems, Intel and Jato Tech Ventures participated in Banderacom’s $9 million first-round funding, concluded in August 2000. This $35 million
investment will enable Banderacom to maintain its leadership position in the rapidly emerging InfiniBand technology sector by funding the development of Banderacom’s IBandit
silicon products family.


NEW YORK & SANTA BARBARA, CA — The Schroder Ventures US Fund, a private equity fund focused on media, communications, technology and services, announced that, in partnership with existing management, it has signed a definitive Stock Purchase Agreement to acquire Armed Forces Communications, Inc. d/b/a Market Place Media (MPM) from CTN Media Group, Inc. (NASDAQ: UCTN) for $28 million in cash.

MPM is a leading media placement and promotions company targeting specialized markets, including the fast-growing minority and college markets, as well as the military market. It had revenues of $48 million in 2000.

SAN JOSE, CA — Atrenta Inc., an enabler of collaborative electronic design, today announced the closing of a first round $8 million equity
investment. Venrock Associates, one of the most experienced and highly respected venture capital firms in the U.S., led the venture round. This first round financing will allow Atrenta
to enlarge its marketing, technical support and sales forces, and to expand its research and development capabilities.

CAMBRIDGE, MA — Avaki Corp.,, formerly Applied MetaComputing, Inc., announced that it has closed $6 Million in its first venture
capital funding, led by Polaris Venture Partners.
The funding enables Avaki to commercialize its Internet-scale enterprise-class “grid” middleware platform, which converges distributed, pervasive, and peer-oriented computing. The
platform, in development for seven years at the University of Virginia, unifies multiple work platforms in multiple locations, robustly and securely extending enterprise capabilities to
the edge of the Internet.

NATICK, MA — Connected Corp., the leader in total lifecycle management solutions for enterprise PCs, today announced that it
has received $30 million in financing. The funding consisted of seven new investors including Peregrine Systems, StarVest Partners, New York Life Capital Partners, Ironside
Ventures and Deutsche Banc Alex. Brown, as well as existing investors Baker Capital, Fidelity Ventures, Granite Ventures, Applied Technology and Solstice Capital. Connected will
use this funding to accelerate the development and market adoption of its award-winning TLM software that radically improves worker productivity and reduces corporate costs by
ensuring the availability, functionality and protection of PCs across the enterprise. Connected has raised $66 million in equity financing to date.

ST. PAUL, MN — SPS Commerce, the leading Supply
Chain Integration Service provider, today announced that it has secured an
additional $10 million in financing. Led by CID Equity Partners, this round
of funding includes additional contributions from existing investors St. Paul
Venture Capital, Adams Street Partners, Granite Private Equity and Axiom
Venture Partners.

SPS Commerce will use the funding to increase operational efficiencies, continue building
its hosted Internet service infrastructure and support the expansion of key strategic
partnerships.

NEVADA CITY, CA — Validating the strength of its products, its
market leadership, and its strong growth potential, the Grass Valley Group, a digital media
leader, announced today that a group of investors led by a Lazard private equity affiliate has
made a $36 million equity investment in the company. Terms of the financing were not
released.

The equity funding will provide capital for growth anticipated from the Grass Valley Group’s
new products, enabling the company to lengthen its lead in the broadcast market, make
strategic acquisitions, and hasten its entry into new markets. In addition to the Lazard
private equity affiliate, investors include Dr. Terence J. Gooding, executive chairman of the
Grass Valley Group.

NEW YORK — VentureDrive, the international angel investor and
deal development network, announced today the official opening of its New York City office
located in midtown Manhattan. The Manhattan office is the first of several regional offices
that will be opened as corporate locations in the United States.

In conjunction with the opening of the New York office, Peter Hamilton, CEO of
VentureDrive, announced that VentureDrive will be holding its first local Boot Camp for early
stage and start up entrepreneurs at the Puck Center on June 27 & June 28, 2001.
VentureDrive Boot Camps feature experienced business professionals and angel
investors who provide hands on and practical skills to entrepreneurs looking to obtain early
stage capital from angel investors, high net worth investors or other sources of early stage
private equity.


MAYNARD, MA –AP Engines, the only provider of a
complete OSS integration platform for telephony and broadband provisioning and
usage management, today announced that it has closed $30 million in second
round financing.

Thomas Weisel Capital Partners LP, a $1.3 billion private equity fund managed by
Thomas Weisel Partners, led the round, which also included a strategic investment from
Enron Broadband Services, a subsidiary of Enron Corp. (NYSE: ENE). The company’s
original investors – Atlas Venture, Bessemer Venture Partners and Commonwealth Capital
Ventures – participated in the round, as did new partners Lighthouse Capital Partners and
Mentmore Venture Partners. The financing also included $5 million in subordinated debt
from Lighthouse.


VANCOUVER – NxtPhase Corp., a leading developer of digital
and fiber optic solutions for the electric power industry, today announced the completion of
a US$25 million private equity financing.

NxtPhase welcomed five new investors: GE Equity, Perseus 2000 LLC, Wexford Capital
LLC, Mitsubishi Corporation, and Reliant Energy Ventures. Each of the existing NxtPhase
investors also participated through purchasing additional shares and/or conversion of
loans made in earlier financings: Canadian Science and Technology Growth Fund Inc.,
GrowthWorks Capital (Working Opportunity Fund), Hydro-Quebec Capitech Inc., and
Western Technology Seed Investment Fund Limited Partnership. NxtPhase has set aside
an additional equity of $5M which will close over the next three months, to allow both equity
and product purchase participation by a number of integrated power utilities.

SEATTLE — The Cobalt Group, Inc. (Nasdaq:CBLT)
announced today that it has entered into a merger agreement with an affiliate of Warburg
Pincus, a private equity investment firm and Cobalt’s largest shareholder.

Under the terms of the merger agreement, Cobalt’s shareholders will receive $3.50 in
cash for each share of common stock that they own. The purchase price represents
approximately a 79% premium to the $1.95 closing share price on June 1, 2001, which
was the last trading day before the announcement of the transaction.

Shares held by Warburg Pincus will not be converted in the merger, and certain other
shareholders, including directors and senior management of Cobalt, also may retain an
equity interest in Cobalt after completion of the merger. Upon completion of the merger,
Cobalt will become privately held by Warburg Pincus and certain other shareholders,
including the management participants. Warburg Pincus currently owns approximately
46% of Cobalt’s outstanding common stock.