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Private Equity Week Wire — Thursday 2/28

ST. LOUIS — Viasystems Group Inc. (NYSE: VG) today announced that Hicks, Muse, Tate & Furst Incorporated (“HMTF”) has increased its total investment in Viasystems. The additional investment is in the form of HMTF’s open-market purchases of $232 million of the Company’s 9 3/4% Senior Subordinated Notes and $51 million of the company’s bank debt. Prior to today’s announcement, HMTF’s investment in Viasystems had been disclosed as common equity and $100 million in 14% Senior Unsecured Notes. On a consolidated basis, HMTF now owns 52% of Viasystems’ common equity and 55% of its unsecured debt.
Viasystems also announced today that it has retained Rothschild Inc. to assist the Company in evaluating several recapitalization alternatives in an effort to reduce debt and strengthen the Company’s balance sheet.

REDWOOD CITY, CA — Ceon Corp., the Intelligent Broadband Provisioning Company, announced today an agreement with Sutter Hill Ventures, Berkeley Ventures, Technology Crossover Ventures, Accel Partners, and major existing investors, to complete a private equity financing of Ceon at a level that fully funds the Ceon business plan. The investment enables Ceon to aggressively move forward in the market for broadband provisioning services. Sutter Hill Ventures, Berkeley Ventures, Technology Crossover Ventures and Accel Partners are some of North America’s premier and largest Venture Capital institutions.

CHICAGO — ARRYX Inc., a company that provides laser systems for the pharmaceutical and biotech industries, announced that it has completed a $2.1 million second round of funding. Investors include Draper Fisher Jurvetson Fund VII, Fahnestock Venture Capital Fund, and ARCH Development Fund.
Arryx’s first product, the BioRyx 200 system, is a breakthrough tool for drug development and therapeutic research. The BioRyx 200 system integrates Arryx’s proprietary holographic optical trapping (HOT) technology with easy- to-use software to provide for the first time the ability to use hundreds of laser beams for manipulating hundreds of microscopic objects independently and simultaneously in three dimensions.

SATSOP, WA SafeHarbor Technology Corp., a leading provider of web-based customer support services, has secured its fourth round of venture financing, raising $7.5 million and bringing its total financing to date to $40.5 million. All of the major investors from SafeHarbor’s last fund event participated in the round that closed this week. Kirkland, Washington-based OVP Venture Partners led the funding. Other investors included Wheatley Partners (based in New York), Covestco (based in London) and Washington Mutual Bank (based in Seattle).

CAMPBELL, CA — GotMarketing, a provider of self-service email marketing software, today announced the closing of a $6 million round of funding led by Mosaic Venture Partners, with follow on investments from current investors Celtic House and Chairman Michael Potter, former CEO of Cognos.
This funding follows the company’s signing of prominent channel partnerships with Yahoo! Small Business, Oracle Small Business, and several other leading Web business service providers. These partners offer an integrated version of GotMarketing’s Campaigner suite of email marketing software tools to hundreds of thousands of small and medium businesses.

BELLEVUE, WA— UniSite Software, the Bellevue-based developer of innovative Web content management solutions, announced the closing of $1 million in second round funding, led by venture capital firm Timberline Venture Partners and a local private investor, KUBI.

In addition, the company announced the launch of UniSite Content Manager, an advanced Web content management solution that can be implemented in as little as two weeks. The technology transforms an existing Web site into a database-driven site supporting content for multiple channels — including wireless — and allows team members to collaborate and update content easily from anywhere in the world.

MINNEAPOLIS — Coolibar LLC announced today it has closed an initial $500,000 round of private equity financing. This funding, combined with bank and trade financing plus initial seed capital, will enable the Minneapolis-based sun-protective clothing company to enter the national market by late May.

SAN FRANCISCO — Tuesday afternoon, the New York Stock Exchange informed meVC Draper Fisher Jurvetson Fund I, Inc. (NYSE: MVC) (the “Fund”) that it has reversed its previous ruling and disallowed voting by brokers of their discretionary accounts. In the interests of shareholders, this morning the Fund held its annual meeting and discussed issues. Additionally, Larry Gerhard was re-elected to the board of directions. The meeting adjourned until April 25, 2002 where it will reconvene at the San Francisco Airport Marriott Hotel, 1800 Old Bayshore Highway, Burlingame, California.
“It was a very helpful and successful meeting,” said John M. Grillos, Chairman and CEO of the meVC Draper Fisher Jurvetson Fund I. “As always, we value shareholder’s constructive advice and opinions. We look forward to hearing and meeting with shareholders in the coming weeks to explain the true facts surrounding the proxy.”

— Advanced Fibre Communications Inc. (AFC(R)) (Nasdaq: AFCI), a leader in multiservice broadband solutions for the telecommunications industry, today announced that it has agreed to acquire privately held AccessLan Communications, Inc. of San Jose, Calif. AccessLan is a leading developer of carrier-class, multiprotocol network equipment designed for large-scale networks.

Under the terms of the agreement between AFC and AccessLan, AFC will acquire all outstanding shares of AccessLan stock that it does not already own for approximately $43 million in cash and assume approximately $4 million in liabilities. Additionally, all options to purchase shares of AccessLan common stock will be assumed by AFC and will become options to purchase approximately 1.2 million shares of AFC common stock. AFC currently holds a minority interest in AccessLan. This transaction will be accounted for as a purchase and is expected to close in the second quarter of AFC’s fiscal 2002. The transaction has been approved by the board of directors of both companies, and is subject to customary closing conditions.

PHILADELPHIA — Morphotek Inc. announced today that the Company has received the 2002 Biotech Company of the Year Award at the 8th Annual Ben Franklin Emerging Business Awards ceremonies in Philadelphia. The award, which is sponsored by S.R. One Limited, the venture capital fund of GlaxoSmithKline, honors an outstanding regional life sciences company that demonstrates novel technology, as well as the potential for significant impact on the treatment of disease. The selected company is recognized for its exceptional management team, prospects for achieving product commercialization in a reasonable period of time, and significant growth potential. Accepting the award for Morphotek were its three co-founders Dr. Nicholas C. Nicolaides, President and CEO, Dr. Philip M. Sass, Executive Vice-President and COO, and Dr. Luigi Grasso, Vice President of Research and Development.

WATERLOO, CANADA — TurboSonic Technologies Inc. (OTC Bulletin Board: TSTA), a leading provider of air pollution control technology, today announced it has learned that Hamon Research-Cottrell, Inc. has recently completed the purchase of 450,000 shares of TurboSonic’s common shares from CVF Technologies Corporation. Hamon Research-Cottrell had previously purchased directly from TurboSonic 500,000 common shares pursuant to a July, 2001 Strategic Alliance and Investment Agreement. With this purchase, Hamon Research-Cottrell now owns approximately 9% of TurboSonic’s outstanding common shares.

MINNEAPOLIS — St. Paul Venture Capital announced that Steve Larsen has joined the firm as a venture partner. He will split his time between the firm’s Silicon Valley and Minneapolis offices. Larsen is an addition to the firm’s Software and Services team and he will focus on supporting and building St. Paul’s portfolio of companies. He is currently serving as the acting vice president of business development for Visage Mobile, an early-stage company in St. Paul’s portfolio.

Prior to joining St. Paul, Larsen, 51, held founding executive roles at four start-up companies: Net Perceptions, Ticketmaster Online-Citysearch, Unicast and World Merchandise Exchange. As senior vice president of marketing and business development at Net Perceptions, Larsen helped commercialize collaborative filtering and advanced analytics software — technologies that fundamentally changed the way business is done on the Internet. He also helped lead the company through a successful initial public offering. St. Paul Venture Capital was an early investor in Net Perceptions.

CHICAGO — Expanding its investment in the medical rehabilitation industry, One Equity Partners announced today an agreement to purchase, via its portfolio company AbilityOne, Smith & Nephew plc’s Rehabilitation business, a leading provider of products to occupational and physical therapists.
One Equity Partners, the private equity arm of Bank One Corporation (NYSE: ONE), will merge its portfolio company, AbilityOne Corporation with Smith & Nephew’s Rehabilitation unit. U.K.-based Smith & Nephew will receive $101 million in cash and retain a 21.5 percent ownership stake in the combined company.

— CenterSpan Communications Corp. (Nasdaq:CSCC) today announced that it has received a commitment for up to five million dollars in private equity financing. The company’s largest shareholder has unconditionally agreed to purchase up to 833,333 shares of common stock at a price of $6.00 per share, if requested to do so by the company, in one or more private transactions representing total proceeds to the company of five million dollars. As compensation for entering into this commitment, the company issued to the investor a three-year warrant to purchase 100,000 shares of common stock at $10.67 per share. To the extent the investor purchases more than 100,000 shares of common stock under this commitment, the investor will also receive a three-year warrant to purchase an equal number of shares of common stock at $10.67 per share.

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