PE Week Wire, Dec. 27, 2006

Following is an abbreviated version of PE Week Wire; Dan Primack is in Costa Rica for a vacation this week.

Top Three

Several mega-buyout firms yesterday unveiled more details about their new association, the Private Equity Council, including the selection of veteran lobbyist Douglas Lowenstein as president and CEO. Lowenstein, who plans to start in February, is president of the Entertainment Software Association, a trade association of U.S. video-game companies. The founding members of the council include Apollo Management, The Blackstone Group, The Carlyle Group, Hellman & Friedman, Kohlberg Kravis Roberts & Co., Madison Dearborn Partners, Providence Equity Partners, Silver Lake Partners, Texas Pacific Group and Thomas H. Lee Partners.

Avista Capital Partners has inked a definitive agreement to acquire the publisher of the Star Tribune newspaper in Minneapolis/St. Paul from The McClatchy Company (NYSE: MNI) for $530 million. The Star Tribune has a daily circulation of more than 360,000 and a Sunday circulation of about 600,000, making them the 14th largest daily paper and the 10th largest Sunday paper in the United States. The senior management team already in place will continue to run the company. The deal is the splashiest to date for Avista Capital, whose founders spun out of DLJ Merchant Banking Partners to launch th! eir own shop in 2005. Following its acquisition of Knight Ridder earlier this year, McClatchy has been selling off newspapers in markets not growing as fast as it would like.

vJive has secured a $22.6 million commitment from Matrix Partners India to install digital video screens in stores and other locations across India, according to Business Standard. Matrix Partners India has invested $4.5 million of that sum so far. The company is currently installing some 2,000 screens, used to display advertising and promotions, and plans to have up to 100,000 deployed by 2010, according to Rajesh Jog, co-founder and CEO. Avnish Bajaj, managing director at Matrix Partners India, is joining the board of vJive parent Digital Music India.

VC Deals

Orthopedic Development Corp. is raising $1 million in venture financing to help market a device designed to improve on the old metal-rod-and-screw method of back surgery, VentureWire reports. The company’s first product, TruFUSE, consists of a human-bone-based dowel inserted during surgery in the spine to help promote the fusion of wiggly joints. The company expects the round to close before year-end.

Chelsey Henry, based in Seattle, has closed on $1.2 million of an anticipated Series B round of $1.6 million. The money is earmarked to help the handbag maker make a lot more handbags. Members of angel network Keiretsu Forum Northern California led the round. Chelsey Henry merchandise is sold in more than 500 boutiques across the country, not to mention Canada, Europe and Asia.

Buyout Deals

Wynnchurch Capital Partners and Oak Hill Special Opportunities Fund have signed a definitive agreement to acquire Highway Technologies Group from United Rentals Inc. (NYSE: URI). The Wall Street Journal pegged the sale price at $85 million. Highway Technologies Group provides traffic safety services and equipment used in road repair and maintenance. The buyout firms expect the company to grow both through internal expansion and through strategic acquisitions. Expect the transaction to close in the first quarter of 2007.

CPAC Inc. (NASD: CPAK), purveyor of everything from brooms and mops to imaging equipment, said it would be acquired by Buckingham Capital Partners II LP for $42.8 million. The New York private equity firm also plans to take on about $6.7 million in debt, giving the company an enterprise value of about $49.5 million. Founded in 1969, the 600-employee company has two divisions. Fuller Brands makes and markets mops, brushes and brooms; CPAC Imaging sells imaging equipment, chemicals and silver refining services used in color photography and other processes.

KSL Capital Partners reached the 19th hole on its acquisition of ClubCorp Inc., completing a buyout of the owner of resort and golf properties. The purchase price was $1.8 billion, according to Crain’s Chicago Business. The nearly 50-year-old company, based in Dallas, owns or operates nearly 170 golf courses, country clubs, private business clubs, sports clubs and resorts. It employs 18,000 workers, and generated gross revenue of just over $1 billion in 2005. KSL Capital’s portfolio of golf and resort properties also includes Doral Golf Resort & Spa near Miami and La Quinta Resort & Club and PGA West in La Quinta, Calif. www!

U.K. buyout shop 3i Group PLC said today it has agreed to acquire Netherlands-based Dockwise Transport NV, transporter of heavy machinery for the marine oil-and-gas industry, in a deal valued at about $700 million, Dow Jones reports. Heerema Group, a Dutch oil-and-gas services company, and Wilhelm Wilhelmsen ASA, a Norwegian shipping company, are the sellers.

Hedge fund manager GSO Capital Partners is slated to close on a deal today to buy more than 240 Burger King restaurants from Burger King’s second-largest franchisee, Heartland Food Corp., according to The Miami Herald. The sale price is $155 million. Heartland Food Corp., launched to buy troubled Burger Kings and get them back on track, made its first major purchase in 2003 when it paid $16 million for 131 restaurants owned by AmeriKing, then going through bankruptcy liquidation.

PE-Backed IPOs

Pacgen Biopharmaceuticals Corp., a Vancouver-based biopharmaceutical company, has raised $7.1 million Canadian dollars ($6.1 million) through an initial public offering on the TSX Venture Exchange in Canada, according to Taiwan Economic News. The company, founded by a Taiwanese professor, is developing drugs for the treatment and prevention of infectious diseases and diseases of the immune system. Western Life Sciences Fund, L.P., managed by Lombard Life Sciences, is a large shareholder in the company !

PE Exits

UK buyout shop Barclays Private Equity has agreed to sell Buch & Kunst Group, a Dresden-based operator of 44 bookstores, to the Thalia book retailing group, according to Dow Jones. Buch & Kunst had expected to post sales of more than 50 million Euros ($78.8 million) in 2006. It is among the five largest booksellers in the country.

Firms & Funds

Bahrain-based Venture Capital Bank has raised more than $75 million in a first closing of the MENA Small & Medium Enterprises Fund I L.P., earmarked for acquisitions in the Middle East and North Africa, according to Middle East Company News. The target for the fund is $250 million. The fund is co-managed by Venture Capital Bank and Global Emerging Markets, a U.S. private equity shop.

Prosperitas Investment Partners, founded in 2000 to back Kentucky start-ups, failed to prosper and is being liquidated as part of a court settlement, according to The Courier-Journal. Most of the 55 investors are Louisville business people. The U.S. Small Business Administration is taking over management of the fund to try to recoup the $19.9 million in backing that it provided as part of its SBIC program. The firm invested about $1.5 million in each of about two dozen companies.

Human Resources

Joshua Gotbaum has joined New York-based buyouts shop Blue Wolf Capital Management LLC as an operating partner. The 55-year-old Gotbaum will immediately be put to work as chairman and chief restructuring officer of Platform Learning Inc., a provider of educational services that has been operating under bankruptcy protection since June. For many years an investment banker with Lazard Freres, Gotbaum most recently guided Hawaiian Airlines through a reorganization as its Chapter 11 trustee. Gotbaum was also Assistant Secretary of Treasury and of Defense in the Clinton administration.

David Metzger has been named chief financial officer of Sciona Inc., a supplier of consumer DNA testing services based in Boulder, Colo. Metzger previous was chief financial officer of Sterling Partners, a diversified private equity firm. Sciona provides genetic screening to people who would like to find out how to live longer and prevent health problems.