Exit watch, week of Oct. 1, 2007

EchoStar pays $380M for Sling Media

As Mobius Venture Capital winds down and makes few, if any, new investments, the Boulder, Colo.-based early stage investor has racked up its second big exit in less than three months.

Last week, EchoStar Communications Corp. (Nasdaq: DISH) announced it has agreed to acquire Sling Media Inc., which makes the Slingbox device that allows people to watch their TV via their computers and handheld devices. The deal is valued at about $380 million in cash and stock. Sling raised about $57 million in funding since 2004 from EchoStar and such investment firms as Mobius, DCM, Allen & Co., Goldman Sachs, Hearst Corp., Liberty Media Group and Hercules Growth Capital.

In July, Mobius portfolio company Postini Corp.—an email security service provider launched during the depths of the dot-com bust—delivered a huge payback when Google bought the company for $625 million. Postini had raised about $26 million from Mobius and a half-dozen other VC backers. Mobius Partner Ryan McIntyre was involved in both of the portfolio companies.

Brad Feld, who is still listed as a Mobius managing director and author of the Fled Thoughts blog at www.feld.com, wrote on his blog last week: “My partner and 2007 travel buddy Ryan McIntyre is smiling tonight as he crawls into bed and reflects on another great deal on the heals of his successful investment in Postini. I’d recommend that he snuggle up to a Slingbox, but I’ll restrain myself.”

NetScout buys Network General

NetScout Systems Inc. (Nasdaq: NTCT) has acquired computer security company Network General Corp. from buyout firms TPG and Silver Lake Partners. The deal is valued at about $205 million, including $50 million in cash and $100 million of debt financing. TPG and Silver Lake had paid about $275 million to acquire Network General (f.k.a. Sniffer Technologies) from McAfee Inc. in 2004.

Adnexus sold for $430M

(NYSE: BMY) has agreed to acquire Adnexus Therapeutics Inc., a Waltham, Mass.-based developer of therapeutic proteins. The deal is valued at $430 million, with the net purchase price coming to $415 million after deducting Adnexus’ net cash balance. The deal also includes up to $75 million in earnouts. Adnexus, which cancelled plans to raised $86 million in an IPO after the deal was announced, has raised $70 million in VC funding from Atlas Venture, Flagship Ventures, HBM BioVentures, Polaris Venture Partners and Venrock.

Ariba procures Procuri

(Nasdaq: ARBA) has agreed to acquire Procuri Inc., an Atlanta-based provider of on-demand supply management solutions. The deal includes an up-front $93 million cash and stock payment, including $14 million in cash that will be placed in escrow to secure indemnity obligations of Procuri stockholders. Ariba also will pay off about $8 million of Procuri’s debt. Procuri has raised more than $22 million in VC funding from Advent International and Insight Venture Partners.

Raytheon acquires Oakley

(NYSE: RTN) has agreed to acquire Oakley Networks Inc., a Salt Lake City-based provider of information leakage detection and prevention. No financial terms were disclosed. Oakley had raised about $29 million in VC funding from such firms as Kleiner Perkins Caufield & Byers, Fidelity Ventures and DAG Ventures.

Verus sells pediatric unit

San Diego-based Verus Pharmaceuticals Inc. has sold its pediatric asthma development programs to AstraZeneca PLC. The deal includes a $30 million upfront payment, plus the possibility of a $280 million earnout. Verus raised a $78 million Series A round in 2005 from Domain Associates, Prospect Venture Partners, Paul Royalty Fund, MPM Capital, Montreaux Equity Partners, Athenian Venture Partners and Windamere Venture Partners. In addition, the company received $20 million in product-specific royalty funding from Paul Royalty Fund.