PE Week Wire, Feb. 14, 2007

Uh oh… It’s one of those mornings when my column fell apart at the last minute. I’ll blame the snowstorm here in Boston, even though the piece involved West Coast happenings (so perhaps the fault simply lies with Cupid).

Top Three

Avista Capital Partners has agreed to acquire BioReliance Corp. from Invitrogen Corp. (Nasdaq: IVGN) for approximately $210 million. BioReliance is a Rockville, Md.-based contract service organization providing biological safety testing, toxicology, viral manufacturing, and laboratory animal diagnostic services to the global pharma market. The transaction is expected to close next quarter.

Zounds Inc., a Mesa, Ariz.-based hearing-aid maker, has raised $25 million in Series A funding, according to a regulatory filing. Backers include TWJ Opportunity Fund and Signature Capital.

ClearWire Corp., a Kirkland, Wash.-based WiMAX company, has set its proposed IPO terms to 20 million shares being offered at between $23 and $25 per share. This means that ClearWire is targeting upwards of $500 million, compared to an original filing for $400 million. It plans to trade on the Nasdaq under ticker symbol CLWR, with Merrill Lynch, Morgan Stanley and JPMorgan serving as co-lead underwriters. Seven other banks also are participating. ClearWire has raised around $1.2 billion in private equity funding, including a $900 million infusion last year led by Intel Capital. Other significant shareholders include Bell Canada, Motorola and company founder Craig McCaw.

VC Deals

NextWave Pharmaceuticals Inc., a Buffalo Grove, Ill.-based pediatric drug company, has raised $40 million in Series B funding, according to VentureWire. Return backers included Sofinnova Ventures and Vivo Ventures, which had participated in a $10 million Series a round in 2005.

Bridge Pharmaceuticals Inc., a provider of preclinical contract research to drug manufacturers, has raised $35 million in Series B funding. Granite Global Ventures was joined by return backers, but Bridge declined to specify which ones. Bridge – which has operations in both San Francisco and China – previously raised funding from firms like Aisling Capital, Lehman Brothers, WI Harper Group and former parent SRI Internation! al.

Locus Pharmaceuticals Inc., a Blue Bell, Pa.-based small-molecule drug developer, has raised $30.2 million in fifth-round funding. Novartis Bioventures Ltd., HBM BioVentures and return backer Prism VentureWorks co-led the deal, and were joined by existing shareholders S.R. One Ltd. and L Capital Partners. The company has now raised around $122 million in total VC funding since 1999, including a $40 million Series D round in 2001 at a post-money valuation of approximately $196 million.

Cayenne Medical Inc., a Scottsdale, Ariz.-based sports medicine company, has raised $12.7 million in Series B funding. Split Rock Partners led the deal, and was joined by MB Ventures.

BA Systems Inc., a San Jose, Calif.-based provider of enterprise networking solutions, has raised $10 million in Series B funding led by return backer Bessemer Venture Partners, according to a regulatory filing.

SmartSynch Inc., a Jackson, Miss.-based provider of wireless smart meters to utilities, has raised $10 million in Series D funding, according to VentureWire. The company previously raised nearly $50 million in VC funding since 2000, including a Series C infusion at a post-money valuation of approximately $77.1 million.

Trellis Bioscience Inc., a South San Francisco-based developer of cell identification and recovery technology that enables the development of protein-based therapeutics, has raised $10 million in Series B funding. Novartis Bioventures led the deal, and was joined by Pac-Link Bio Venture, Sagamore Bioventures and return backers Easton-Hunt Capital Partners and Morgenthaler Partners.

Everyday Wireless Inc. has raised $6.85 million in Series A funding led by Flagship Ventures, according to a regulatory filing. The Concord, Mass.-based company provides GPS tracking services for school busses, snow plows, street sweepers and private fleets.

Tepha Inc., a Cambridge, Mass.-based maker of absorbable medical devices for use in surgical repair and regenerative medicine, has secured $6.05 million of an $11.7 million Series B round. Shareholders include Integra Ventures, The Vertical Fund and State Farm Insurance.

CoADna Photonics Inc., a Sunnyvale, Calif.-based developer of fiber-optic solutions for DWDM optical networks, has raised nearly $2.63 million in Series B funding, according to a regulatory filing. Shareholders include VenGlobal Capital Fund and SF Capital.

Sensory Networks Inc., a Palo Alto, Calif.-based provider of network security acceleration technology, has secured $2.5 million of a $6 million Series D round, according to a regulatory filing. Return backers include Deutsche Bank Capital Partners/Ericsson Deutsche Technology Fund, JAFCO Investment (Asia) and Technology Venture Partners.

TruTouch Technologies Inc., an Albuquerque, N.M.-based developer of non-invasive alcohol testing devices to prevent drunk driving, has raised around $2.5 million in Series B funding, according to a regulatory filing. Shareholders include Flywheel Ventures, New Mexico Co-Investment Fund and Verge.

Buyout Deals

Cinven may or may not be considering a buyout bid for Wolseley PLC, a listed UK-based distributor of plumbing and heating equipment. London newspaper City AM reported that Cinven was prepping a Gbp10 billion bid, which sent Wolseley shares up 8.5%, giving it a market capitalization of approximately Gbp9.1 billion. AFX News has since countered with a report that Cinven is not pursuing such an offer.

Investcorp has acquired Armacell International GmbH, a Munster, Germany-based provider of flexible technical insulation that was spun off from Armstrong World Industries in 2000. No financial terms were disclosed.

The Italian Treasury announced that five bidders have made the shortlist to acquire airline carrier Alitalia. They are: Texas Pacific Group, MatlinPatterson Global Advisors, Goldman Sachs/Cerberus, Unicredit and AP Holding. Terra Firma was among six bidders that didn’t make the first cut.

Applebee’s International Inc. (Nasdaq:APPB) has retained Citigroup and Banc of America Securities to help explore strategic alternatives, including a possible recapitalization of sale of the company. The Overland Park, Kan.-based company franchises and operates nearly 2,000 restaurants under the Applebee’s Neighborhood Grill & Bar brand.

Vestar Capital Partners has agreed to acquire an equity position in AZ Electronic Materials, a Luxembourg-based supplier of electronic materials to the flat panel display and integrated circuit markets. The company was acquired by The Carlyle Group in 2004, and now will be jointly owned by Vestar and Carlyle as equal partners. AZ management also holds an equity position. No financial terms were disclosed for the deal, which is expected to close by the end of March.

AXA Private Equity has acquired an undisclosed stake in Trecobat Group, a Brittany, France-based homebuilder. No additional details were released.

SPG Partners has acquired Tasti D-Lite, a New York-based maker of frozen dairy deserts. No financial terms were disclosed for the deal, which also included participation by Tom Lee. In related news, SPG operating partner James Amos will serve as Tasti D-Lite CEO.

Heartland Recreational Vehicles LLC, an Elkhart, Ind.–based manufacturer of towable RVs, has received an undisclosed amount of private equity funding from Catterton Partners.

Sun European Partners has acquired Manoir Industries, a France–based designer and manufacturer of specialty metal components and assemblies, from turnaround firm Fin’Active. No financial terms were disclosed.

Sindicatum Carbon Capital Ltd., a UK-based developer of greenhouse gas abatement projects worldwide, has raised an undisclosed amount of private equity funding from Citigroup Venture Capital International and Black River Asset Management (subsidiary of Cargill). No financial terms were disclosed.

ThermaSource, a Santa Rosa, Calif.-based provider of drilling, engineering and consulting services to the geothermal energy sector, has raised an undisclosed amount of growth capital from US Renewables Group, Riverstone Holdings and The Carlyle Group.

Seminole Energy Services LLC, a Tulsa, Okla.-based retail gas marketing company, has raised $55 million in private equity funding from The Stephens Group.

Oracle Corp. (Nasdaq: ORCL) has paid $1.08 billion to increase its stake in I-Flex Solutions Ltd. to 82.9 percent. Oracle had announced in 2005 that it would acquire a 61% stake, by acquiring Citigroup Venture Capital’s 40% stake, plus an additional 20% from public shareholders. A recent regulatory filing, however, indicates that it only held 54.8 percent. I-Flex is an India-based maker of banking software.

PE-Backed IPOs

Cavium Networks, a Santa Clara, Calif.-based provider of security, network services and content processing semiconductor solutions, has filed for an $86.25 million IPO. It plans to trade on the Nasdaq under ticker symbol CAVM, with Morgan Stanley and Lehman Brothers serving as co-lead underwriters. Cavium has raised over $60 million in total venture funding since its 2000 inception, from firms like Menlo Ventures (29.98% pre-IPO stake), Diamondhead Ventures (9.19%), Alliance Ventures (13.89%), NeoCarta Ventures (5.46%). Menlo Ventures.

BioHeart Inc., a Sunrise, Fla.-based developer of heart muscle regeneration therapies, has filed for a $35 million IPO. It plans to trade on the Nasdaq under ticker symbol BHRT, with BMO Capital Markets and Janney Montgomery Scott serving as co-lead underwriters. BioHeart has raised around $40 million in VC funding since 2000, from firms like Ascent Medical Ventures, Guidant Corp., Tyco Capital and Advent-Moro Equity Partners.

PE-Backed M&A

Concentra Health Services Inc., an Addison, Texas-based provider of occupational healthcare services, has acquired Industrial Solutions Group Inc., a Ft. Wayne, Ind.-based occupational and environmental health services company. No financial terms were disclosed. Concentra is a portfolio company of Welsh Carson Anderson & Stowe.

NPC International Inc., a Lenexa, Kan.-based franchisee and operator of Pizza Hut franchises, has agreed to acquire 59 additional Pizza Hut units located primarily in Idaho and the Spokane Valley for $27.1 million. The sellers are Pizza Hut of Idaho, Rocky Mountain Pizza Huts, Northwest Restaurant Group and Northern Idaho Pizza Huts. NPC was acquired last year by Merrill Lynch Global Private Equity.

PE Exits

Foresight Corp., a Dublin, Ohio-based provider of business intelligence and transaction automation applications for the healthcare and global business markets, has repurchased all of its stock held by institutional investors. The company raised $6 million in 2000 at a post-money valuation of $17.5 million, from River Cities Capital Funds, The Aurora Funds, Core Capital Partners and Fountainhead Capital.

Electronic Arts Inc. (Nasdaq: ERTS) has acquired SingShot Media, a San Francisco-based online karaoke community. No financial terms were disclosed. SingShot raised $1.04 million in Series A funding last spring from Trans Cosmos USA.

Firms & Funds

Key Capital, a unit of KeyCorp, is nearing a $150 million close on its debut third-party fund-of-funds, which will target emerging buyouts managers, according to Its first two commitments were for GB Merchant Partners’ 1903 Equity Fund and Excellere Partners.

Cerberus Capital Management is planning to open an office in Hong Kong, according to the Wall Street Journal.

Human Resources

Naohiko Kitsuta has joined Kohlberg Kravis Roberts & Co. as a Japan-based managing director. He previously was a partner with MKS Partners Ltd., where he was in charge of buyouts in the consumer services and retail sectors.

Ian Russell has joined 3i Group as an industrialist-in-residence, focused on the European gas and power market. He is the former CEO of Scottish Power PLC.

Bong Koh has joined the Santa Monica, Calif. office of Prism VentureWires, with a focus on digital media and consumer Internet opportunities. He previously was with Advanced Technology Ventures and, before that, was co-founder of a startup called Mobilocity.

Roland Beaulieu has been named president of First Coverage Inc., a Toronto-based provider of coverage optimization software for the institutional investment community. Beaulieu had been serving as an entrepreneur-in-residence with GrandBanks Capital and, before that, was COO of Corporate Communications Broadcast Network (CCBN). First Coverage recently raised US$5 million in first-round funding from GrandBanks and J.L. Albright Ventures.

Bob Ennis has joined Communications Equity Associates as a managing director in the firm’s I-banking and finance group. He previously was president of Tensor Advisors, which provided advisory and merchant banking services in the media and new media industries.

Timothy Ome has joined Trenwith Securities as a San Jose, Calif.-based managing director, where he will provide advisory services for acquisitions, divestitures and corporate finance transactions for middle-market companies. He previously was a managing director with BancAmerica Securities.