PE Week Wire, Dec. 22, 2006

Greetings to those of you without enough seniority – or remaining vacation time – to take the day off. Or perhaps you’re just workaholics (now typing with just one hand as other is raised)… Anyway, just a few notes before I head down to Costa Rica to visit the in-laws…

*** I spent part of yesterday writing about D2C Games (a.k.a. Big Dog Games), the latest startup from Madden Football architect and Glu Mobile founder Scott Orr. It just secured $1.5 million in Series A funding led by Rubicon Ventures, which follows up on a $1 million angel round that Rubicon had arranged. You can read the post here.

The last graph notes that Silicon Valley-based Rubicon is raising its inaugural fund, but I neglected to mention that it is using a fund structure that is semi-similar to the approach being taken by Stage 1 Ventures on the East Coast. More specifically, it’s an alignment of interests approach – whereby LPs pay no fees, but are charged a 30% carried interest. Moreover, the fund actually will be a series of separate funds for each portfolio company ($500k-$2.5m each from Rubicon). I still like this idea in theory, but continue to worry about its practicality. LPs will likely jump at the fee vs carry feature, but might balk at any requirement that it essentially carry out due diligence on individual investments… Will be very interested to see how both Rubicon and Stage 1 fare, and who they secure as limited partners.

*** Vedanta Venture Capital is the firm formed earlier this year by former Invesco Private Capital pros Parag Saxena, Alessandro Piol and Howard Goldstein. It’s remained pretty quiet so far, but some conflicting details are beginning to emerge. PE Insider today reports that it is raising its inaugural fund with a $1 billion target, but a regulatory filing from earlier this month puts the figure at $300 million. The filing also says that the vehicle is a fund-of-funds focused on VC and LBO/corporate finance opportunities in both the U.S. and overseas. I just tried calling the phone number on the filing, but it doesn’t work. Hopefully I’ll have some clarification upon return from vacation.

*** PE Week Wire will publish next Wednesday-Friday, and be produced by Buyouts editor David Toll ( Please send all press releases and other such info his way. It will still look like it comes from me, however, in order to satisfy your various email filters. I’ll be returning on Tuesday, Jan. 2. Also, Alex Haislip ( will be overseeing, and David Harkey ( will be around for those of you wanting to advertise here or at peHUB in 2007.

As of this very moment, the PE Week Wire has 35,275 subscribers. I’d like to sincerely thank each one of you for reading this year, and continue to encourage you to participate either by emailing me or by posting at peHUB. You are the reason that I enjoy going to work each morning, and I expect to miss your electronic company over the next week. Have a fantastic holiday…

New at

• U.S. venture capitalists tripled overseas disbursements in 2006. Alex has the news and data.

• There is Nothing Shocking about research analyst predictions that this company or that is for sale.

• Glu Mobile founder Scott Orr gets VC funding for his latest startup.

• Five Questions for Mark Brooks of BA Venture Partners, on the sale of U.S. HealthWorks.

• New job listings in our Careers Section. Be sure to post opportunities at your firm.

• And, as always, news and analysis updated throughout the day…

Top Three

Plum, a New York-based network of local television stations in markets like Martha’s Vineyard, Vail and the Hamptons, has raised $20 million in venture capital funding. The Kraft Group and hedge fund The Raptor Fund co-led the deal, and were joined by Ackerley Partners and The Pilot Group. Individual participants included Chris Blackwell (Island Records founder), Jimmy Buffett (musician), Nick Buoniconti (ex-NFL player), Tom Freston (former Viacom CEO), Jason Flom (Virgin Records CEO), Andy and Kate Spade (founders of Kate Spade) and Barry Sternlicht (Starwood Hotels founder).

Odyssey Investment Partners has agreed to acquire Wastequip Inc. from DLJ Merchant Banking Partners.No financial terms were disclosed. Wastequip is a Cleveland-based designer, manufacturer and marketer of equipment used to collect, process and transport solid, liquid and semi-liquid waste materials.Credit Suisse has committed to provide leveraged financing for the transaction, and also served as financial advisor to DLJ MB on the deal.

The Riverside Company has acquired Phoenix Medical Resources Inc., a renter of respiratory equipment to nursing homes throughout the United States. No financial terms were disclosed for the deal, which will result it PMR being merged with existing Riverside portfolio company RCS Management Corp., a respiratory care provider for more than 1,000 facilities.

VC Deals

LinkedIn, a Palo Alto, Calif.-based business networking site, is nearing a $13 million VC infusion that would value the company at around $250 million, according to MarketWatch.

Heavy Inc., a New York-based broadband entertainment company, has raised $12.8 million in Series E funding, according to a regulatory filing. Company backers include Polaris Venture Partners and Jacobson Investments.

Reevoo, a UK-based online customer review aggregator, has raised Gbp2.5 million in Series A funding led by Eden Ventures.

Innovawave Inc., a Round Rock, Texas-based provider of virtualization performance and efficiency management software, has raised $2 million in Series A funding led by Silverton Partners, according to a regulatory filing.

CoComment, a Swiss blog comment tracking service, has raised $1.5 million from Netage Capital Partners, according to Alarm Clock Euro.

Light Blue Optics Ltd., a UK-based developer of miniature laser projection technology, has raised $1 million in VC funding from return backer 3i Group. The deal is an extension of a 3i-led seed round that originally closed in July with $2.5 million.

Buyout Deals

Francisco Partners has completed its $18.50 per share buyout of Metrologic Instruments Inc. (Nasdaq: MTLG). Hedge fund Elliott Associates and Metrologic chairman and interim CEO Harry Knowles co-invested alongside Francisco.

Allied Capital is committing $124.1 million to sponsor the management buyout of Huddle House Inc., a Scottsdale, Ga.-based franchisor of more than 400 family dining restaurants. Allied’s participation took the form of a senior revolving credit facility, a senior term loan, senior subordinated notes and a majority of the common equity. Huddle House senior management also participated.

Cadent Energy Partners has agreed to acquire a 60% ownership position in Logan Oil Tools Inc., a Houston, Texas-based provider of fishing tools and products to the oil industry, according to LBO Wire. The report adds that Energy Special Situations Fund will take a 15% stake.

Coller Capital is in talks to acquire the assets of Ritchie Capital’s largest hedge fund, according to The Wall Street Journal.

PE-Backed IPOs

Pinnacle Gas Resources Inc., a Sheridan, Wyo.-based onshore natural gas exploration and development company, plans to offer 3.57 million common shares via its proposed IPO. It plans to trade on the Nasdaq under ticker symbol PINN, with Friedman Billings Ramsey serving as lead underwriter. Shareholders include DLJ Merchant Banking.

PE-Backed M&A

Protection One Inc. (OTC BB: PONN), a home security alarm company majority-owned by Quadrangle Group, has agreed to acquire Integrated Alarm Services Group Inc. (Nasdaq: IASG) for approximately $212 million (including $125 million in assumed debt).

PE Exits

Alimera Sciences Inc., a San Diego-based ophthalmic pharmaceutical company, has sold its OTC allergy franchise (including antihistamine Alaway) to Bausch & Lomb. No financial terms were disclosed. Alimera has recently closed its Series B round with a total of $31.8 million, from firms like BA Venture Partners, Domain Associates, Intersouth Partners, Polaris Venture Partners and Venrock Associates.

PerkinElmer Inc. (NYSE: PKI) has agreed to Euroscreen Products, a majority-owned subsidiary of Euroscreen SA. No financial terms of the all-cash deal were disclosed. Euroscreen SA is a Belgium-based developer of assays and screening technologies for the discovery of drugs acting on G protein-coupled receptors. It has raised venture capital from firms like Synerfi SA.

Firms & Funds

Providence Equity Partners has raised the cap for its sixth fund to $12 billion, according to LBO Wire. The media and communications-focused buyout firm had been targeting $10 million, but is oversubscribed.

Atlas Venture has closed its seventh fund with $385 million in capital commitments. The fundraising had been essentially completed back in June, but had been held open for a few straggling limited partners which were rolled in last month. News of the final close was first reported by VentureWire.

The Massachusetts Pension Reserves Investment Management Board (PRIM) has issued an RFP for managers who will invest in opportunities that will “benefit of the economic climate of” Massachusetts. This includes alternative asset managers like venture capital and buyout funds. The RFP was issued last week, and proposals are due by March 9.

Bank of New York is raising up to $200 million for a new mezzanine fund (BNY Mezzanine Partners), according to a regulatory filing. It already has secured around $130 million in capital commitments.

Borealis Ventures is raising up to $50 million for its second fund, according to a regulatory filing. The Hanover, N.H.-based firm focuses on early-stage opportunities in Northern New England and “throughout the Dartmouth College network.”

Evercore Partners has completed its acquisition of Braveheart Financial Services Ltd., a U.K.-based boutique financial advisory and investment management firm, for around $63 million.

Human Resources

Core Capital Partners has promoted both Philip Eliot and Jagtar Narula from vice president to principal.