PE Week Wire: Fri., April 18, 2008

Greetings from Chapel Hill, where the Venture Capital Investment Competition (VCIC) finals will begin in a few hours. That means I really don’t have time to write a proper column, but since I’d hate to leave you with nothing…

Bob Grady is in talks to change roles at The Carlyle Group, where he has run the firm’s venture capital and growth equity affiliate since 2000. Grady would still be involved with the $1.5 billion Carlyle Venture Partners – including serving on portfolio company boards and assisting with fundraising – but would give up day-to-day operational control. His new role would be to focus on broader issues affecting Carlyle Group as a whole, including regulatory and social responsibility issues. This is similar to what former RNC chair Ken Mehlman recently agreed to do for KKR, except that Grady would remain based in San Francisco. For example, Grady would become the point man when California legislators draft a revised bill to preclude state pension funds from investing in firms partially owned by certain sovereign wealth funds.

Carlyle does already have a managing director of global government and regulatory affairs – David Marchick – but also has such vast interests that both men could probably work 18-hour days without stepping on each other’s toes. For context, Grady has a bunch of government contacts, having once served as deputy assistant to President George H.W. Bush and as executive associate director of the Office of Management & Budget between 1991 and 1993. He also was chief speechwriter and senior advisor to the 1998 Bush/Quayle campaign.

Nothing is set in stone yet, but Grady’s transition would be part of a larger personnel shift at Carlyle Venture Partners, which is currently investing out of a $605 million fund raised in 2006. The firm has had two partners poached over the past year, and has replaced them with Nick Sturiale (formerly with Sevin Rosen Funds) and Greg Rossman (formerly with Pequot Capital). It also has quietly hired Jeb Miller as a principal. For those who don’t remember, Miller was previously a partner with ComVentures, who was ousted as part of the coup that transformed that firm into Velocity Interactive Group.

*** Versant Ventures is beginning to market its fourth fund with a $500 million target, according to LP sources. The Menlo Park-based firm raised $400 million last time around, and focuses on healthcare-related companies.

*** I can’t quite yet confirm all the details, but Sequoia Capital is definitely doing something bigger than just a hedge fund (although that is certainly happening). Let me put it this way: Sequoia is looking to become venture community’s Blackstone Group. Not in terms of size or going public, but in terms of becoming a broader asset management and advisory operation.

*** Have a great weekend. Be back in the home office on Monday…

Top Three

Halliburton Co. reportedly is considering a counter-bid for Expro International Group PLC, a listed UK energy services company that earlier this week agreed to a £1.61 billion buyout by Candover, Goldman Sachs and AlpInvest.

BrainCells Inc., a San Diego-based drug company focused on mood and anxiety disorders, has raised $20 million in additional Series B funding. It had announced a $30 million first close earlier this year. New Enterprise Associates led the expansion, and was joined by Alexandria Real Estate Equities and first tranche investors MedImmune Ventures, Bay City Capital, Oxford Bioscience Partners, Technology Partners, Pappas Ventures and NeuroVentures.

Microsoft has agreed to buy Farecast Inc., a Seattle-based developer of data mining techniques to predict prices in the travel industry. Initial reports of the Farecast sale put the pricetag at around $75 million, but the Microsoft deal actually is said to be worth $115 million. Farecast has raised just over $20 million in VC funding, from firms like Madrona Venture Group, Greylock Partners, Pinnacle Ventures, Sutter Hill Ventures and WRF Group.

VC Deals

TripIt, a San Francisco-based provider of an online travel organizer and social network, has raised $5.1 million in Series B funding. Participants included Sabre Holdings, O’Reilly AlphaTech Ventures and European Founders Fund.

EQAL, a “social entertainment” studio launched by the creators of Lonelygirl15, has raised $5 million in VC funding from Spark Capital and Marc Andreesen.

GamerDNA Inc. (f.k.a. GuildCafe), a Cambridge, Mass.-based social media site for online gamers, has raised $3 million in Series A funding led by Flybridge Capital Partners. The company also raised an undisclosed amount of seed funding from Flybridge last summer.

Buyout Deals

Nike Inc. (NYSE: NIKE) has completed the sale of its Bauer Hockey subsidiary to Kohlberg & Co. and Canadian businessman W. Graeme Roustan for $200 million. Bauer makes branded ice hockey products like skates, sticks and helmets. Lazard advised Nike on the process.

The TriZetto Group Inc. (Nasdaq: TZIX) has been hit with a class-action lawsuit by shareholders opposed to a proposed $1.4 billion acquisition of the company by Apax Partners. Under terms of the deal, TriZetto stockholders would receive $22 per share, which is a 29% premium to the stock’s 30-day trading average prior to the acquisition announcement. BlueShield of Tennessee and The Regence Group would participate as equity backers alongside Apax. TriZetto is a Newport Beach, Calif.-based provider of IT solutions for the healthcare supply chain.

Verax Capital Partners has led a recapitalization of GoodRadio.TV LLC, a West Palm Beach, Fla.–based company formed in 2006 to acquire “hyper-local” radio operations in small to medium markets. It currently owns 24 stations and one FM construction permit in 12 markets in Missouri and Iowa. Verax was joined on the deal by Wells Fargo Foothill, Pacific Media Capital and GoodRadio founder and CEO Dean Goodman.

PE-Backed IPOs

Epocrates Inc., a San Mateo, Calif.-based provider of clinical information and support tools to healthcare professionals, has filed for a $75 million IPO. It plans to trade on the Nasdaq under ticker symbol EPOC, with Citi serving as lead underwriter. Shareholders include The Sprout Group (17% pre-IPO stake), Goldman Sachs (16%), InterWest Partners (12.7%), Draper Fisher Jurvetson (10.4%), Three Arch Partners (10.3%) and Bay City Capital (7.3%).

PE Exits

WellPoint Inc. (NYSE: WLP) has acquired Resolution Health Inc., a Columbia, Md.–based provider of data analytics-driven personal healthcare guidance. No financial terms were disclosed. Resolution Health had been majority owned by Trident Capital.

PE-Backed M&A

Silver Lake Sumeru has sponsored a merger between Audio Visual Innovations and Signal Perfection Ltd., in order to form a single provider of global audio video systems and integration services. No financial terms were disclosed.

Firms & Funds

ATA Ventures has begin marketing its third fund with a $250 million target, according to VentureWire. It is expecting to hold a first, and perhaps final, close in July. The Redwood City, Calif.-based firm raised $196 million for its second fund back in 2006.

TD Capital Private Equity has held a $215 million first close on its fourth fund-of-funds, according to VentureWire. The Toronto-based firm is targeting between $250 million and $350 million. It closed on $348 million for its third fund just last year.

Human Resources

Odyssey Investment Partners has made several promotions: William Hopkins and Brian Kwait have been named co-presidents; Jeffrey McKibben and Craig Staub have been named managing principals; Robert Aikman and Ross Rodrigues have been named principals; and Dennis Moore and Matthew Satnick have been named vice presidents.