PE Week Wire: Fri., Feb 23, 2007

Some assorted notes from the past few days in Beaver Creek, as I reacclimate myself to Eastern Standard Time…

*** VC in the Rockies was not a “boondoggle.” I don’t write this in order to preempt corporate overlord questions about my pending expense report, but rather because this was the term used by almost every local (read: Boston-area) VC who knew I was planning to attend. They didn’t use the word maliciously, but rather to suggest that the event would be little more than an excuse to ski and drink. And I didn’t take it maliciously, as I was actually looking forward to a few days of S&D (with just a bit of writus interruptus).

But the reality is that VC in the Rockies had an enormous amount of value from a content perspective. In fact, more than a few out-of-towners mentioned to me on Wednesday that they were bailing on ski plans in order to keep attending company presentations. Perhaps next year’s slogan should be: “Come for the cocoa, stay for the content.”

I was one of those out-of-towners, and tried to attend as many of the company presentations as possible (but obviously failed, due to a multiple track setup). Like with all such events, the presenters were heavily skewed toward portfolio companies of conference organizers. My favorite was probably Adam Aircraft, which is in the process of securing between $100 million and $125 million in notes with warrants (already lined up a lead I-bank, but will look to syndicate). Not quite a typical VC play, of course, but CFO Chris Naro successfully demonstrated and defended his company’s competitive advantages over the current makers of small planes for the corporate, personal and taxi markets.

Naro’s only hiccup came when he compared price points between an Adam model and the cheaper Eclipse. He said: “If you can afford $1.7 million for a plane, you can afford $2.25 million.” The line got a laugh, but then an audience member asked about a pending Honda plane. After Naro responded that he wasn’t concerned because the Honda would run around $4 million, someone shouted out: “If you can afford $2.25 million for a plane, you can afford $4 million.”

*** Another notable moment came from NVCA president Mark Heesen, who gave a lunchtime keynote address. After railing against the Big 4 accounting firms for vociferously opposing SOX reform for small-cap companies, he suddenly realized that KPMG was one of the conference’s sponsors. A fleeting moment of sheepishness, before returning to his conviction that while accounting firm improprieties helped prompt SOX, they are among the legislation’s primary beneficiaries.

*** Everyone was obviously gung-ho for Colorado, but more than a few people were surprised that Infinite Power Solutions CEO Ray Johnson promoted the fact that his company’s inaugural battery manufacturing facility was in Golden. “Shouldn’t it be in China or India,” many people asked? Good question, but unfortunately not one that got asked during the Q&A (I raise my hand in blame).

*** Speaking of presenting companies, I’ve compiled a list of each presenting company that is currently in the market for new VC funding (about 2/3 of them). You can read it here, with all the relevant details included.

*** There was a media roundtable on Tuesday to discuss various issues related to the Colorado market. Here’s the podcast (long, but interesting).

*** A reader used the Top Secret button to ask the distinction between Mobius Venture Capital and Foundry Group. I assume it was a conference attendee, since both names were thrown around a bunch. The answer is that Foundry is a new spinout firm from five Mobius partners – Brad Feld, Seth Levine, Ryan McIntyre, Jason Mendelson and Chris Wand – and is currently in market with its inaugural fund. Mobius itself continues to wind down, although will continue to be operational for the next five years or so (including active portfolio company support).

*** I mentioned yesterday that Battery Ventures’ Mike Scanlin won the poker tournament, but not how proud of him I was. You see, both Mike and I were among several “ducks.” This meant we were handed yellow t-shirts when we walked in, and anyone who knocked us out would automatically win a nice bottle of wine. Glad to know that there was at least one bottle remaining at night’s end…

Top Three

Ikaria, a Seattle-based biotech company focused on critical care solutions, has agreed to acquire INO Therapeutics LLC, a Clinton, N.J.-based developer of gaseous drugs like inhaled nitric oxide for treatment of hypoxic respiratory failure in newborns, from Linde AG. The deal is valued at approximately $670 million, with New Mountain Capital providing around $200 million in equity. Other equity backers include Altitude Life Science Ventures, Washington Research Foundation and Alexandria Equities, while Credit Suisse will arrange the leverage. Existing Ikaria shareholders ARCH Venture Partners, Venrock Associates and 5AM Ventures will roll their equity positions into the combined company. www.inotherapeutics.! com

Segetis Inc., a Plymouth, Minn.-based tech startup focused on renewable chemical products, has secured $5 million of a $15 million Series A round led by Khosla Ventures, according to a regulatory filing.

Getty Images Inc., a Seattle-based stock photo agency, has agreed to buy MediaVast Inc., a New York-based provider of visual content via such platforms as WireImage, FilmMagic and Contour Photos. The deal is valued at $200 million in cash, and will provide Getty with 8.5 million additional images. MediaVast has raised nearly $20 million in VC funding from firms like Time Warner, Baroda Ventures, QVT Fund and SBE Entertainment.

VC Deals

Chimerix Inc., a Seattle-based developer of orally-available antiviral therapeutics, has raised $23.1 million in Series D funding. Canaan Partners led the deal, and was joined by Alta Partners and return backers Sanderling Ventures, Asset Management Company and Frazier Healthcare Ventures.

ProfitLine Inc., a San Diego-based provider of outsourced telecom expense management solutions, has raised $7 million in Series C funding from return backers FTVentures and Menlo Ventures.

Cara Therapeutics Inc., a Tarrytown, N.Y.-based biotech company focused on pain and inflammation, has raised $5 million in additional Series C funding, to close out the round at $24 million. It had announced the $19 million first tranche last November. Scottish Windows and Mitsubishi provided the new capital, while the initial Series C backers included MVM Life Science Partners, Alta Partners and Ascent Biomedical Ventures.

HyperMed Inc., a Waltham, Mass.-based medical hyperspectral imaging startup, has secured $3 million of a $5 million Series A round led by Greenwich Biotech Ventures, according to a regulatory filing.

Persay, a Tel Aviv, Israel–based provider of biometric speaker verification technology, has raised $1 million in new VC funding from Athlone Global Security.

Aggregate Knowledge Inc., a Mountain View, Calif.-based developer of behavioral search solutions within a single website, is nearing the close of a $20 million Series B round at a pre-money valuation of more than $50 million, according to VentureBeat. It preciously raised a small amount of Series A funding from First Round Capital.

Buyout Deals

Key Principal Partners has sponsored a management buyout of Kellermeyer Building Services, a Maumee, Ohio-based provider of customized commercial cleaning services to the retail industry. KPP’s investment included $36 million in preferred equity and subordinated notes.

Providence Equity Partners has acquired a majority stake in Dutch and Flemish DTH satellite TV operators CanaalDigitaal and TV Vlaanderen. No financial terms were disclosed for the deal, which is still subject to Dutch regulatory approval.

Century Park Capital Partners has acquired ROM Corp., a Belton, Mo. from Hampshire Equity Partners. No financial terms were disclosed, except that Patriot Capital Funding provided $28.15 million in one-stop financing. ROM is a Belton, Mo.-based provider of niche products for the trucking and transportation market – including shutter doors for fire safety and military vehicles, and ramps and insulated bulkheads for foodservice trailers.

PE-Backed IPOs

Gafisa SA, a Brazilian homebuilder, has filed for a $774.31 million IPO. It plans to trade on the NYSE under ticker symbol GFA, with Merrill Lynch, Banco Itau BBA and Citigroup serving as co-lead underwriters. Gafisa already trades on the Sao Paulo Stock Exchange, and lists shareholders like GP Investimentos and Equity International Properties.

PE-Backed M&A

Mobixell Inc., a Wellesley, Mass.-based provider of mobile multimedia solutions, has agreed rto acquire the assets of Adamind (LSE:ADA), a Palo Alto, Calif.-based supplier of media adaptation software for the mobile messaging, content, and convergence services markets. The deal reportedly is valued at around $5.5 million. Mobixell has raised around $23 million in VC funding from firms like Apax Partners, Comverse Investments and Intel Capital.

PE Exits

Allergan Inc. (NYSE:AGN) has acquired EndoArt SA, a Swiss provider of remote-controlled implants used in the treatment of morbid obesity and other conditions. The deal is valued at $97 million in cash. EndoArt had raised over $13 million in VC funding since spinning out from the Swiss Federal Institute of Technology in 1998, from firms like TAT Capital Partners, Sofinnova Partners, Genevest, Vinci Capital, Venture Incubator AG and EMBL Venture Capital.

Fox Interactive Media has acquired Strategic Data Corp., a Santa Monica, Calif.-based provider of interactive advertising technology. The deal will help Fox generate ad revenue from properties like MySpace. No financial terms were disclosed. Strategic Data backers include Constellation Ventures, JNet Ventures and Smart Technology Ventures.

Burger King Holdings Inc. (NYSE: BKC) completed a secondary public offering of 21 million shares at $22 per share. Selling stockholders include Bain Capital, Goldman Sachs and Texas Pacific Group. The three firms still hold nearly a 60% stake in the company, post-offering.

TA Associates has distributed 5.3 million common shares of premium mattress maker Tempur-Pedic International Inc. (NYSE: TPX) to its limited partners. The firm still retains 4.5 million shares.

Close Brothers Private Equity has sold UK contract interiors company Gradus Ltd. for £41 million to company management, which is backed by Bank of Scotland Integrated Finance. Close Brothers sponsored a £30 million management buyout of Gradus in December 2001 from the Headlam Group.

Firms & Funds

vSpring Capital of Salt Lake City is raising up to $250 million for its third venture capital fund, according to a regulatory filing. It already has secured around $56 million, while its prior fund was capped at $86 million in 2003.

Midwest Mezzanine Fund of Chicago is raising up to $150 million for its fourth fund, according to a regulatory filing. It already has secured around $67 million in capital commitments.

S3 Ventures is raising up to $100 million for its inaugural fund, according to a regulatory filing. It already has secured around $20 million. The Austin, Texas-based firm is led by Brian Smith, a former managing director with Convergent Ventures who previously served as founder, chairman and CEO of Crossroads Systems (Nasdaq: CRDS).

Clairvest Group of Toronto has closed its third private equity fund with Cdn$300 million in capital commitments, including Cdn$75 million from Clairvest.

BB&T Capital Partners has closed its second private equity fund with $150 million in capital commitments. Its inaugural vehicle was capped at $100 million in 1998.

Human Resources

Anthony Ecock has joined Welsh, Carson, Anderson & Stowe as a senior operating executive focused on the healthcare sector. He previously was vice president and general manager of GE Healthcare’s enterprise client group.

Jonathan Salkin has joined Royal Bank of Scotland as a managing director in charge of the bank’s healthcare financial sponsor business. He previously was with Cardinal Health Inc., where he was responsible for M&A and strategic planning for several of the company’s provider-facing businesses including its $10 billion Medical Products and Services business unit.