PE Week Wire: Fri., Jan. 18, 2008

*** BREAKING*** The Service Union Employees International just disrupted a speech by Carlyle Group co-founder David Rubenstein, here at the Wharton PE&VC Conference. They hung banners, chanted about employees rights with megaphones and were escorted out by a small army of police. Will have more soon at peHUB, and am hoping to get a copy of the video. Now back to our regularly scheduled ramblings:

A few notes before heading downstairs to moderate a Wharton Conference panel on legal and regulatory issues. Can’t you just feel the excitement?

*** Expect sovereign wealth funds to be a major topic of conversation at today’s conference, particularly as they keep buying up positions in U.S. investment banks and private equity firms. What I want to know is if venture capital firms will be the next to sell. There are a handful of VC firms with enough brand equity and cache to pull something like that off, and the founder liquidity issues should be the same for older VCs as they are for older buyout pros.

NVCA president Mark Heesen takes issue with that last assertion – he says successful VCs already feel plenty rich – but few people attain wealth by passing up opportunities to add more of it. Or maybe VCs firms will sell stakes to big U.S. public pensions, if not sovereigns (which really only differ in levels of transparency). After all, if Silver Lake can sell a piece to CalPERS, why can’t (or won’t) Sequoia?

*** Arthur Klausner of Pappas Ventures posts some takeaways from the JPMorgan Healthcare Conference.

*** Union Square Ventures has settled its “name” lawsuit with Union Square Partners, out of court.

*** It was great seeing so many of you last night at the peHUB Shindig, particularly given the snowy conditions. I hope you also had a good time. Final note of gratitude to sponsors Dechert LLP and Hamilton Lane. Without them, we all would have been drinking tap water.

Top Three

Ulthera Inc., a Mesa, Ariz.-based developer of a therapeutic ultrasound device for use in cosmetic procedures, has raised $22.5 million in Series B funding. New Enterprise Associates led the deal, and was joined by return backer 3i Group.

Francisco Partners has acquired AdvancedMD Software Inc., a Salt Lake City-based provider of Web-based medical practice management solutions. No financial terms were disclosed. AdvancedMD had raised around $20 million in VC funding since 1999, from firms like Domain Associates, Windward Ventures and Hunter Capital Group.

Nick Sturiale and Greg Rossmann have joined Carlyle Venture Partners as managing directors in the firm’s Silicon Valley office. Sturiale previously was a general partner with Sevin Rosen Funds, while Rossmann was a managing director with Pequot Capital. The firm also announced that principal Ryan Harris is relocating from Carlyle’s New York office to Silicon Valley (and switching from buyouts to VC), and that it has hired Rachel Winokur as a vice president focused on healthcare opportunities. She previously was with Datascope Corporation.

VC Deals

Anagran Inc., a Redwood City, Calif.-based provider of high-capacity flow management routers, has raised $12 million in Series C funding. Return backers included Advanced Technology Ventures, Draper Fisher Jurvetson and ArrowPath Venture Capital.

Broadband Enterprises, a New York-based online video network, has raised $10 million from Velocity Investment Group (f.k.a. ComVentures).

Grancius Inc., a San Francisco-based provider of government webcasting and public meeting management solutions, has raised $10 million in Series A funding from JMI Equity.

PeptImmune Inc., a Cambridge, Mass.-based drug company focused on chronic autoimmune and inflammatory disorders, has raised $8.2 million in the first close of a Series D round. Return backers included New Enterprise Associates, MPM Capital, Hunt Ventures, Boston Medical Ventures and Silicon Valley Bank Capital. The company had previously raised around $66 million in VC funding since its 2003 spinout from Genzyme, with other investors including Prism VentureWorks, Vanguard Ventures and Itochu Corporation.

Conduit, a Redwood Shores, Calif.-based provider of Web community toolbars, has raised $8 million in Series B funding from Benchmark Capital.

Fifth Generation Systems Inc., a Roslyn, N.Y.-based maker of social computing platforms, has raised $5.3 million in Series B funding. Backers include Irwin Lieber and Barry Rubenstein of Wheatley Partners, Persistency Capital, Gund Investment LLC and return backer Bergstein LLC.

Buyout Deals

Bear Growth Capital Partners has sponsored a majority recap of Crestcom International LLC, a Denver-based global franchisor of management skills training systems. No financial terms were disclosed.

Delphi Corp. (OTC BB: DPHIQ) has agreed to sell its Wheel Bearings business to Resilience Capital Partners for $44.2 million.

Leeds Equity Partners has agreed to acquire Campus Management Corp., a Boca Raton, Fla.-based provider of administrative software solutions to colleges and universities. No financial terms were disclosed.

Symantec Corp. (Nasdaq: SYMC) has agreed to sell its Application Performance Management business to Vector Capital. The unit would then operate as a standalone business named Precise Software Solutions Inc. No financial terms have been disclosed.

PE Exits

Sun Microsystems Inc. (Nasdaq: JAVA) has agreed to acquire MySQL AB, a Sweden-based developer of an open-source database, for approximately $1 billion. The deal includes $800 million in cash and $200 million in options. MySQL had raised $39 million in VC funding from Balderton Capital, Institutional Venture Partners, Intel Capital, SAP Ventures and Presidio STX.

Goldleaf Financial Solutions Inc. (Nasdaq: GFSI) has acquired Alogent Corp., an Atlanta-based provider of enterprise deposit automation technologies for financial institutions. The deal was valued at around $42.5 million, including $32.9 million in cash, a $7 million convertible note and $2.6 million in Goldleaf common stock. Alogent had raised $5 million in VC funding from the Southeastern Technology Fund.

PE-Backed M&A

CPI Card Group, a Littleton, Colo.–based manufacturer of financial payment cards, has acquired Didier Printing Co., a Fort Wayne, Ind.-based secure card maker. No financial terms were disclosed. CPI is a portfolio company of Tricor Pacific Capital.

Firms & Funds

Georgia Governor Sonny Perdue announced the formation of a $40 million venture capital fund that will “partner with the private sector and provide early-stage financing to startup companies based on ideas developed in Georgia’s research universities.” Georgia is providing $10 million, while the remainder comes from the private sector.

Square 1 Bank has opened an office in Boulder, Colorado.

Svoboda Collins LLC has changed its name to Svoboda Capital Partners, in part to reflect the 2006 retirement of firm co-founder Michelle Collins. The Chicago-based middle-market firm recently held a $100 million final close on its second fund ($50m short of target), according to LBOWire.

Human Resources

Evan Marks and Victor Cohen have joined Vestar Capital Partners as a principal and vice president, respectively, in the firm’s Vestar Resources group. Marks previously was a senior VP of marketing for WebMD, while Cohen previously was with Union Square Partners/Capital Z.

Stephen Gray has joined The Carlyle Group as a senior advisor to the firm’s global telecom and media practice. He is the former president of McLeod USA, and currently serves as chairman of both SecurityCoverage Inc. and ImOn Communications LLC. He also serves on the boards of Carlyle portfolio companies Insight Communications and Hawaiian Telecom.

Guy Paisner has joined Doughty Hanson & Co. as an investor relations pro, effective Monday. He previously was with Altius Associates.

David Limp has joined mobile entertainment community Limbo as its first chief operating officer. He previously was a venture partner with Azure Capital Partners, one of Limbo’s venture capital backers.

Bill Hayes has joined Chicago Investment Group as director of asset management. He had spent the past seven years as a senior vice president with Wachovia Securities, where he managed assets for business owners and other high-net-worth individuals.

Jack Laschever has joined DPEC Partners as senior managing director of venture capital. He previously was vice president and group publisher of ForbesLife, a luxury travel and lifestyle magazine.