Buyout firms fancied tech companies, such as Avaya Inc. and Palm Inc., in separate deals announced last week.
Elevation Partners agreed to acquire a 25% stake in Palm in exchange for a $325 million equity investment. Partners Fred Anderson and Roger McNamee will join the Palm board. The deal is part of Palm’s larger recapitalization, which also includes $400 million in debt. The company plans to use the equity and debt to help finance a $9 per share cash distribution for Palm shareholders.
Meanwhile, TPG and Silver Lake Partners agreed tp buy network equipment manufacturer Avaya in a $8.2 billion cash buyout. The Avaya deals comes a few weeks after wireless phone company Alltel Corp. announced its $24.7 billion buyout by TPG and Goldman Sachs Group Inc.’s GS Capital Partners.
BCE acquisition talks heat up
BCE Inc.
, Canada’s largest telephone company, said last week that it has begun talks with a new private equity group about a possible take private buyout.
The group includes Providence Equity Partners and Teachers’ Private Capital.
BCE said it was still in talks with Cerberus Capital Management and a group of Canadian investors that includes the Hospitals of Ontario Pension Fund.
The Canada Pension Plan Investment Board is leading a third group of bidders, which also includes New York buyout firm Kohlberg Kravis Roberts & Co.
The company expects to finish a strategic review of its buyout offers by Sept. 30. Separately, company shareholders last week agreed to rename the company Bell Canada as part of a five-year rebranding effort.
Starent leads IPO parade
VC-backed companies continue to launch IPOs. Among the leading newly issued companies is Starent Networks Corp., a Tewksbury, Mass.-based provider of mobile multimedia infrastructure solutions. The company, which raised $126.4 million in its IPO, priced 10.5 million common shares at $12 per share, with a subsequent market cap of $749 million. It will trade on the Nasdaq under ticker symbol STAR.
Starent had raised about $95 million in total VC funding since its 2000 inception from such firms as Matrix Partners (20.1% pre-IPO stake), North Bridge Venture Partners (20.1%), Highland Capital Partners (18.4%), Focus Ventures (6%) and the T-Mobile Venture Fund.
Another new issue is Jazz Pharmaceuticals Inc., a Palo Alto, Calif.-based drug development and commercialization company focused on neurology and psychiatry. It priced 6 million common shares, at $18 per share, for an IPO take of about $108 million.
The company had originally planned to price at between $24 and $26 per share, and then lowered its range to between $20 and $21 per share. Its initial market capitalization is about $441 million.
Jazz had raised about $265 million in VC funding since its 2003 inception from Kohlberg Kravis Roberts & Co. (46.24% pre-IPO stake), Thoma Cressey Equity Partners (10.72%), Beecken Petty O’Keefe & Co. (7.15%), Prospect Venture Partners (6.65%), Versant Ventures (6.65%), Golden Gate Capital (5.36%), Lehman Brothers (5.13%), Adams Street Partners, EGS Healthcare Capital Partners and Oak Hill Capital.