PE Week Wire, Dec. 29, 2006

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

Top Three

UK private shop HgCapital said it has raised 300 million Euros ($395 million) for a fund earmarked to finance renewable power projects across Europe, Dow Jones reports. Backers of the fund include Dutch pension fund PGGM and the California State Teachers’ Retirement System. Portfolio companies in the Renewable Power Partners Fund include Wind Direct, developer of wind farms in the U.K.

MatlinPatterson, best known for investments in troubled companies, plans to set up a joint venture with Chinese TV-maker Sichuan Changhong Electric Co. to make plasma displays, according to Dow Jones. The firm plans to invest $40 million for a 17.78% stake in the joint venture through two units of MatlinPatterson Global Opportunities Partners II—Mavericks Investment Holding Ltd. and Cloudbreak Investment Holding Ltd. Sichuan Changhong, together with one of its divisions, plans to invest $185 million for an 82.22% stake.

Bus-maker Neoplan USA Corp. plans to sell its parts division and then shut down under a Chapter 11 plan approved by a bankruptcy court last week, according to Dow Jones. Willis Stein & Partners, the Chicago buyout shop, acquired the company from its German owners in 1998. Neoplan filed for Chapter 11 bankruptcy in Wilmington, Del. in August, listing assets of $13.7 million and debts of $59 million.

VC Deals

Investors in the India Power Fund may get tax breaks under a plan floated by the Power Ministry, according to The Economic Times. Under the proposal, up to 20% of contributions to the fund would be safe from income taxes for five years. The Power Finance Corporation Ltd. In India plans to establish the venture capital fund in the first quarter of 2007; it is to be used to help finance the build-out of power plants that generate electricity.

Google Inc. plans to invest in Shenzhen Xunlei Network Technology Ltd, developer of systems that let Web surfers download videos, according to Industry Updates. Backers of the company include IDG Venture Capital and Morningside Asia Advisory Ltd. Google earlier this year made a big splash in online video with its 1.65 billion purchase of Shenzhen Xunlei is based in Shenzhen, in southern China.

Medical Body Sculpting Inc. has raised $6.1 million in angel backing to open centers where people with extra fat can get the fat removed without surgery, according to VentureWire. The company promotes a treatment called “Lipo-dissolve,” in which “fat is removed by injecting a naturally occurring compound directly into the fat layer.” The company offers 3, 6, 12 and 18-month payment options, without charging interest.

Buyout Deals

Shares of Alitalia SpA, the Italian airline, rose sharply today in Europe amid speculation that an Italian-led consortium was preparing to make a bid, according to AFX, a news service owned by Thomson Corp. (publisher of PE Week Wire). Interested parties cited in the report include Management & Capitali SpA, a private equity firm owned by Carlo De Benedetti. The Italian government appears willing to sell its entire stake in the airline.

The Taittinger family is preparing to buy back a 37% stake in a champagne business that it sold to buyout shop Starwood Capital Group in July 2005, according to French newspaper Les Echos. The Taittinger family is among the country’s largest producers of champagne.

Taiwan plans to take a closer look at private equity deals in which firms acquire more than 25% of a controlling stake in both publicly-traded companies and companies that need a government franchise, such as telecom carriers, banks, radio and TV companies, Taiwan Economic News reports. According to Shih Yen-shiang, vice minister of economics, the government plans to look at such factors as whether the companies would be taken private, and whether the transactions are short-term or long-term investments. In November, The Carlyle Group proposed acquiring Taiwan’s Advanced Semiconductor Engineering in a $5.46 billion transaction.

Belgian private equity shop GIMV plans to hold exclusive talks with Navios Maritime Holdings Inc. regarding the sale of its 24% stake in shipping company Kleimar NV, according to AFX, a news service owned by Thomson Corp. (publisher of PE Week Wire). Navios is also trying to acquire the remaining 76% of the company held by Sea-Invest Group and management. Kleimar manages a fleet of 30 to 35 ocean-going vessels used to transport coal and iron.

PE-Backed M&A

Medical Consultants Inc., a company backed by Boston-based Parthenon Capital, has completed its merger with Advanced Data Processing Inc., bringing together two companies that provide medical billing services. Medical Consultants provides billing services to the emergency room departments of hospitals and physician groups; Advanced Data Processing provides billing services to emergency medical services agencies in the United States. The! senior management team of Advanced Data Processing, led by CEO Doug Shamon and COO Bill DeZonia, will head the combined company. Concurrent with the merger Advanced Data Processing said it had acquired the assets of Intermedix LLX, provider of billing services to emergency medical service providers in Texas.

PE Exits

Eaton Corp. (NYSE: ETN) yesterday said it would buy AT Holdings Corp., parent of aerospace company Argo-Tech Corp., from Greenbriar Equity Group and Vestar Capital Partners, for $695 million. Argo-Tech, which employs 640 people, makes engine fuel pumps, airframe fuel pumps, and ground fueling systems used by operators of commercial and military airplanes. The company generated Ebitda of $63 million in its fiscal year ending Oct. 28, on sales of $206 million. The transaction is expected to close in the first quarter of 2007.

Human Resources

Fabian Mansson, president and CEO of Eddie Bauer Holdings Inc., (NASD: EBHI) stands to collect more than $2.2 million from stock payments and a bonus if the company goes through with its agreed-to sale to Sun Capital partners Inc. and Golden Gate Capital. The two buyout shops agreed to pay $286 million in cash and to assume $328 million in debt to buy the company.

CORRECTION: A story yesterday, attributed to VentureWire, indicated Voyager Capital had closed its fund at $93.3 million. In fact, the firm says that its fund is still open, VentureWire reported in a correction today.