PE Week Wire: 8.25.06

That’s so Maven

Maven Venture Partners is proceeding with plans to raise its $150 million inaugural fund, despite the recent departure of co-founding partner Marc Friend. In an email and subsequent phone conversation, Jennifer Gill Roberts says that the firm already has lined up several LP commitments, and expects to hold a first close sometime this fall. My note that fund-raising was “suspended” had been inaccurate, and for that I stand corrected.

Now here is where it gets interesting. Roberts wrote the following in her email: “We’ve recently added a new partner to the Maven team, a 20+ year serial entrepreneur and venture pioneer who built a top tier early-stage venture platform, delivered top quartile returns over multiple funds and whose success compliments our Mobility thesis.” The formal announcement of said partner isn’t expected until sometime next week, but I’ve been told by multiple sources that Jack Gill – semi-retired co-founder of Vanguard Ventures, and Roberts’ father — has agreed to join Maven in a role beyond his existing advisory position. Roberts would neither confirm nor deny that he is the new partner, and my initial instincts were that it was unlikely, given his age and home-base in Houston, Texas (even though Vanguard does have a Palo Alto office). But he certainly does fit the aforementioned bio.

I pressed Roberts quite a bit during our phone call, but she said that she could not divulge the name because not all relevant parties had yet been informed. She added that it would not be possible for LP sources to have told me it was Jack Gill, since Maven has not yet even told LPs of the individual’s identity. Don’t know what to make of that: (A) Because multiple LP sources brought Gill’s name up to me without my prompting; and (B) Because there is no way the aforementioned LP commitments could be counted on if one-third of the partnership remained secret.

So, for now, Maven Venture Partners officially is Jennifer Gill Roberts, George Richard, CFO Laura Gwodsen and a third mystery partner. All signs seem to be pointing toward Jack Gill, but we’ll apparently have to wait until next week.

*** As some of you noticed, I was on CNBC again yesterday (twice in one week, after not having been on since 2001). The topic was why public company CEOs are flocking to LBO-backed private companies, with the news tease being David Calhoun’s jump from GE to VNU. My basic message was that private company CEOs don’t have to worry about appeasing Wall Street analysts each quarter, don’t have much regulatory oversight and only have to respond to a limited number of masters. Oh, and they also can get paid a lot of money. Various press reports suggest that Calhoun will receive compensation comparable to the $50m he was making at GE, plus at least $50m more in potential VNU equity.

*** Ford Motor Co. looks like it could be the next major company on the LBO auction block, and Bloomberg already suggests that One Equity Partners will make a play for both Jaguar and Land Rover. Why One Equity? Because former Ford CEO Jacques Nasser is a senior partner there. It’s all about who you know, which does make me wonder if Clayton, Dubilier & Rice could soon get in on the action. After all, CD&R spent years dogging Ford to sell them Hertz…

*** Bain Capital and Blackstone Group reportedly have shelved their own proposed bid for Australian retailer Coles Myer, and instead are joining the KKR-led group. So much for doing fewer club deals going forward. First Bain and Apax join the existing Royal Philips semiconductor group, and now this.

*** Tom Lee’s new firm unveiled its initial roster yesterday, including some names that previously had been reported here. Make sure to note that they’ve got specialists in an array of sectors (retail, financial services, etc.) and that the $100m-$500m figure refers to the amount of equity Lee Equity Partners can put in each deal, not to the total transactional value.

In other words, Lee has abandoned his initial plan to form a small-cap private equity firm, and instead is looking to recreate his namesake firm in Boston. The firm already has made small, under-the-radar plays in larger deals, but far bigger things are coming.

*** Finally, anyone still reading this late on a Friday morning deserves some sort of reward. So here goes: You can be among the first to sign up for the PE Week Wire’s News Personalization service. I’ll provide a full explanation on Monday (service begins Tuesday), but the basic idea is that the news section can be reorganized so that your particular interests are up top. The form can be found here.

Top Three

SunRocket Inc., a Vienna, Va.-based Internet phone service provider, has raised $33 million in Series C funding. New backers included Varma Mutual Pension Insurance Co., The Grosvenor Funds and Bru Venture Capital, while returnees included BlueRun Ventures, Mayfield Fund, DCM and Anthem Capital Management. SunRocket has raised nearly $80 million in total VC funding since its February 2004 inception.

The Blackstone Group has completed its $4.3 billion buyout of Cendant Corp.’s (NYSE: CD) travel distribution services unit (Travelport). In related news, Blackstone has agreed to subsequently sell 14% of the newly-independent company to Technology Crossover Ventures.

Marathon Acquisition Corp., a New York-based blank check acquisition company, priced 37.5 million units at $8 per unit, for an IPO take of approximately $300 million. Citigroup served as lead underwriter, and the company will trade on the AMEX under ticker symbol MAQ. Marathon is being run by former Apollo Investment Corp. chief Michael Gross, while directors include former Vail Resorts CEO Adam Aron and Jarden Corp. CEO Martin Franklin.

VC Deals

Codexis Inc., a Redwood City, Calif.-based provider of solutions for pharma chemical process development and manufacturing, has raised $37 million in Series D funding. Bio*One Capital Pte (Singapore) led the deal, and was joined by return backers CMEA Ventures, Pequot Ventures, Chevron Technology Ventures and Maxygen Inc. Codexis has raised $72 million in total venture capital since its 2002 inception, and expects to add an additional $3 million in Series D funding over the next 60 days.

Rubicor Medical Inc., a Redwood City, Calif.-based maker of disposable, non-invasive breast biopsy devices, has raised $30 million in Series C funding. Safeguard Scientifics led the deal with $20 million, and was joined by ITX International Holdings ($5m), Rubicor CEO James Vetter and other founding shareholders., a China-based online car retailing portal, has raised $25 million in new VC funding. Goldman Sachs led the deal, and was joined by return backer Granite Global Ventures. The company has been expected to file for an IPO on the Nasdaq, and had raised $8 million from Granite last October.

Azaire Networks Inc., Santa Clara, Calif.-based provider of fixed mobile convergence solutions, has raised $20 million in Series C funding, according to a regulatory filing. Return backers include Convergence Ventures, Rustic Canyon Partners, Investor Growth Capital and Woodside Fund.

ProtoStar Ltd., a San Francisco-based provider of high-power geostationary satellite services, has raised $16.31 million in Series B-1 funding (including $4.62 million in convertible securities/warrants), according to a regulatory filing. VantagePoint Venture Partners was joined by return backers New Enterprise Associates and RedShift Ventures.

iVivity Inc., an Atlanta-based provider of core components for the storage networking industry, has raised $10 million in additional Series C funding. The round now totals $36 million, including an initial close in 2004 at a $35.5 million pre-money valuation. Return backers include Grotech Capital Group, HIG Capital, Commonwealth Capital Ventures, Kinetic Ventures, Cordova Ventures and Bergman & Associates.

Vantage Oncology Inc., an El Segundo, Calif.-based operator of oncology radiation therapy centers, has raised $6 million in additional Series C funding, according to a regulatory filing. The company announced a $22 million Series C deal back in May 2005. Shareholders include CCP Equity Partners, New Enterprise Associates, Salix Ventures and Versant Ventures.

Anytime Pte Ltd., a Singapore-based provider of video-on-demand content for IPTV, broadband and digital cable networks, has raised an undisclosed amount of VC funding from Intel Capital.

Audit Integrity Inc., a Los Angeles–based financial research firm focused on corporate accounting and governance risk assessment, has raised an undisclosed amount of Series A funding from two “New York-based institutions.” North Haven Partners advised Audit Integrity on the deal.

Buyout Deals

Bain Capital and The Blackstone Group have joined the consortium bidding Au$16.5 billion for Australian retailer Coles Myer Ltd. KKR is leading the group, which reportedly already included The Carlyle Group and CVC Asia Pacific. Bain and Blackstone previously had been considering a rival offer.

Allied Capital has acquired a majority stake in Coverall North America Inc., a Boca Raton, Fla.–based commercial cleaning franchise organization. Allied paid $56 million worth of senior secured notes, subordinated notes and common equity, while senior company management also provided equity.

Cinven is one of three remaining bidders for eight Belgian cable networks, according to The Deal. The total transaction would be valued at more than €475 million, but has been repeatedly delayed due to legal challenges.

Concorde Career Colleges Inc. (Nasdaq: CCDC) shareholders have approved a $19.80 per share buyout offer from Liberty Partners. The total deal is valued at around $114.5 million, with sellers to include Camden Partners. Concorde Colleges is a Mission, Kansas-based owner and operator of 12 post-secondary institutions whose vocational and training programs are primarily in the allied health field.

Falconhead Capital has acquired Growing Family Inc., a St. Charles, Mo.–based provider of in-hospital infant photography services, from Sun Capital Partners and Nautic Partners. No financial terms were disclosed. Goldsmith Agio Helms advised Growing Family on the sale.

Healthpoint Capital has acquired DTI Dental Technologies Inc., a Vancouver-based provider of restorative and cosmetic dentistry products. No financial terms were disclosed. This is Healthpoint’s second dental products deal in less than a week, as it also announced plans to buy Birmingham Ala.-based BioHorizons Implant Systems Inc.

Oak Hill Capital Partners and Leonard Green & Partners are the two remaining bidders for the David’s Bridal unit of Federated Department Stores (NYSE: FD), according to The New York Post. A sale is expected to be worth between $750 million and $800 million, with earlier bidders having included KKR, Apollo Management and Lee Equity Partners.

Polaris Venture Partners has sponsored a Series A recapitalization of Xpressdocs Partners Ltd., a Ft. Worth, Texas–based provider of print marketing services to the residential real estate industry. HabourVest Partners, MCG Capital Corp. and company management also participated on the $27.8 million equity tranche. Harbourvest and MCG also provided senior and junior debt financing, while Xpressdocs was advised by MHT Partners. No financial terms were disclosed.

Prospect Partners has sponsored a recapitalization of Summit Fire Protection Co., a Lino Lakes, Minn.-based provider of fire suppression and plumbing systems. No financial terms were disclosed. Counsel Funding Partners of Minneapolis advised Summit Fire on the deal.

Walton Street Capital has acquired the PGA National Resort & Spa in Palm Beach Gardens, Florida.


No IPOs are scheduled to price until Sept.15, when AdCare Health Systems is on the calendar.

PIPE Deals

Dyax Corp. (Nasdaq: DYAX) has reached an agreement with Paul Capital Partners’ second Royalty Fund, pursuant to which Dyax has monetized a percentage of the revenue generated through its Phage Display Licensing and Funded Research Program (LFRP) for a $30 million upfront cash payment. Dyax also has an option to receive an additional $5 million payment from Paul Royalty in the event that the LFRP achieves certain revenue goals within the next two years.Under the terms of the agreement, Paul Royalty’s rights to receive revenue through LFRP would continue for approximately 10 years.The exact percentage of Dyax’s LFRP revenue that Paul Royalty will receive is tiered and declines as certain revenue levels are

Human Resources

Alexis Lakes has joined RWI Ventures as chief financial officer. She previously was CFO of CMEA Ventures and, before that, with Gabriel Venture Partners.

Steve Sharper, a partner with Convergent Investors, and Harry Hopmeyer, a founding director of Faircourt Asset Management, have joined the board of Neutron Enterprises Inc. (OTC BB: NTRN).