PE Week Wire, Dec. 26, 2006

With silver-penned scribe Dan Primack on vacation this week, following is an abbreviated version of PE Week Wire.

Top Three

A consortium of buyout shops—GS Capital Partners, Kelso & Co., ValueAct Capital, and Parthenon Capital—has agreed to pay $2.5 billion to acquire the equity of vehicle-auction company Adesa Inc. (NYSE: KAR). The consortium has also agreed to assume $700 million in debt, giving the company an enterprise value of $3.2 billion. The company is to be merged with Insurance Auto Auctions Inc., an auto-salvage and auction company owned by Kelso, Parthnon and others.

Texas Pacific Group, The Blackstone Group and Kohlberg Kravis Roberts & Co. are talking about teaming up to bid for a controlling stake in Hutchison Essar Ltd., the Indian mobile phone service unit of Hong Kong’s Hutchison Telecommunications International Ltd and the fourth largest player in the Indian market, according to The Sunday Times. Others reported to be interested in buying the company include Vodafone; Egypt’s Orascom Telecom, in partnership with Qatar Telecom; and India’s Reliance Communications, which has reportedly teamed with several private equity firm.

Conatus Pharmaceuticals, a start-up working on treatments for inflammation and liver disease, has raised $6.6 million of the $27.4 million round it plans to raise altogether, according to a Form D filed with the Securities and Exchange Commission on Nov. 30. The company was founded in July 2005 by the executive management team of Idun Pharmaceuticals following the sale of Idun to Pfizer.

VC Deals

Online shopping software developer Venda has secured $20 million from an investor group led by Investor Growth Capital, the venture capital division of Swedish investment firm Investor, according to The Sunday Times. The deal values Venda at $100 million pre-money; ICG’s Noah Walley and Phil Dur are joining Venda’s board. Customers pay Venda a flat monthly fee to use its off-the-shelf shopping Web sites.

Harmony Information Systems, provider of case management software to human resources executives, has lined up $7.5 million in a first-round of institutional financing from JMI Equity and Updata Partners. The money will be earmarked for product development and marketing. Brad Woloson, a general partner at JMI, and Tim Meyers, a general partner at Updata, are taking seats on Harmony’s board of directors. Founded in 1998, Harmony is based in Reston, Va.

Symphony Medical inc. has raised another $5 million in Series B funding to help make additional progress developing treatments for arrhythmias and other heart afflictions, VentureWire Pro reports. Investors in the most recent funding include Domain Associates, Johnson & Johnson Development Corp., Morgenthaler Ventures and Triathlon Medical Ventures; all four, along with Guidant Compass Group, participated in a $6.2 million Series B round a year ago.

Netage Capital Partners Inc., a Japanese venture capital firm, has spent $1.5 million to acquire a 40 percent stake in an Internet start-up business launched by Swiss telecom company Swisscom, according to the Jiji Press English News Service. The company, coComment, lets customers keep track of the comments they post on different Web sites.

Buyout Deals

OMERS Capital, a division of the Ontario Municipal Employees Retirement System, and Manulife Capital, the private equity division of insurance company Manulife, have teamed up to acquire CCNMatthews, a distributor of news releases in Canada and the United States, according to The Toronto Star. Financial terms of the all-cash deal were not disclosed. OMERS Capital is taking a control-position in the company, while Manulife Capital is taking a minority position. With offices in Vancouver, Calgary, Toronto, Ottawa and Montreal, CCNMatthews employs about 100 people.

Fortress Investment Group LLC and Holiday Retirement Corp. have agreed to acquire the North American operations and facilities of Holiday Retirement, which owns and manages retirement housing around the world. Citigroup Global markets Inc. and Goldman, Sachs & Co. have signed on to provide debt financing; they also are advising Fortress on the deal. The transaction does not include Holiday’s operations outside North America.

PE-Backed IPOs

BigBand Networks Inc. Friday filed for an initial public offering intended to raise up to $140 million through the sale of common stock, according to Dow Jones. The Redwood City, Calif.-based company sells systems to cable TV companies that support a variety of services, including high-speed data, voice over IP, and digital broadcast TV. Backers listed on the company’s Web site include Cedar Fund, Charles River Ventures, Lauder Partners, Meritech Capital Partners, Redpoint Ventures, and Time W! arner Ventures.

PE Exits

UK buyout shop ECI Partners this weekend appeared to be in the final stages of selling Internet hotel-booking site to travel company First Choice in a Pounds 108 million ($211 million) transaction, according to The Sunday Times. The company claims to hold about 12% of the UK online hotel-bookings market. Meantime, First choice continues to seek buyers for its main business providing pre-packaged vacations.

UK buyout shop Bridgepoint Capital is looking to get Pounds 50 million ($97.9 million) for children’s clothing retailer Adams, according to The Times. The firm has hired PricewaterhouseCoopers to advise on strategic options for the company.

Buyout shop HB Equity Partners has sold Maxima Technologies, a electronics and components company, to Actuant Corp. (NYSE: ATU) for $91 million, including the assumption of about $1.9 million in debt. Actuant said it would finance the deal through its revolving credit facility. Maxima employs about 500 people and generates annual revenues of some $65 million. Its products are used by companies in the marine, agricultural, off-highway, industrial, specialty vehicle and automotive markets.

Firms & Funds

Alpen Capital Ltd. and Corecap have been tapped as financial co-advisors for CERT Innovations, a $100 million venture capital fund sponsored by the Centre of Excellence for Applied Research and Training, according to Gulf News. The plan is to finance the transfer of technology from international companies to start-ups in the areas of education, health care, deep computing, telematics, oncology, minimally invasive surgery and other areas. CERT is based in the United Arab Emirates. www.certonli!

Bahrain-based Ithmaar Bank said it intended to set aside $630 million of its $2 billion Infrastructure and Growth Capital Fund for regional infrastructure investments, according to Middle East Company News. Ithmaar Bank and Deutsche Bank are the co-sponsors of the fund, which is managed by Abraaj Capital. The fund is earmarked for minority or majority stakes in Greenfield projects, growth capital investments, privatizations and buyouts in such fields as electric power, water, health care, education, oil and gas, petrochemicals, industrials and mining.

Angel investor group Venture Farm has closed its debut fund at about $1 million, according to VentureWire. The Mission Viejo, Calif-based group also made its first investment, taking a stake in data center monitoring company TrendPoint Systems LLC. The group was launched about a month ago to make seed investments in wireless, enterprise software, energy management and other markets.

Human Resources

UK buyout shop Cinven has appointed Chris Woodhouse chairman and chief executive of Gondola, owner of PizzaExpress, which the firm acquired in October for Pounds 559m ($1.1 billion), according to The Financial Times. Woodhouse, 45, joins from Debenhams, where he was finance director; he earlier was chief executive of Homebase.