PE Week Wire: Fri., May 2, 2008

The sky is gray, the U.S. economy keeps (barely) growing and we’ve all learned an important lesson about the perils of filing a personal defamation suit. In other words, it’s time for Friday Feedback. No specific topic today, just a potpourri…

Joe on buyout fund performance data: “As a fund-of-funds guy, I see a lot of these groups, these numbers “feel” right based on my information, which like most LP’s is vague and lagging. Central to any confidence is the fact that there are some really good companies in certain portfolios, BS, WP, Bain, DLJ Merchants, the night sweats come from not knowing the real debt load or valuations…Overall things look very good from here.”

We’ve got two opposing views of the Panorama Capital fundraising. First is Eton: “I think you’re right to call this a blessing in disguise. Too many VC firms raise more capital than they can handle, which leads them to make big bad bets, in order to push more money out the door. It’s a case where too much of a good thing (capital) can become a bad thing.” Omar disagrees: “Come on Dan. Stop putting lipstick on a pig. If you raise less than half of what you’re looking for, it means that LPs don’t like your track record or something else about you. To me, that means that whatever you’ve raised might end up being too much.”

Fred on KKR’s partnership with the Environmental Defense Fund: “I agree with your analysis Dan, except the part about it providing a model for other private equity firms. You can certainly make a financial case for what KKR is doing, since cutting back on energy reduces costs, but something like this is really about a sense of moral responsibility. That’s not something I think most firms have.” Mike writes: “They need to change the definition of greenwashing to be the brainwashing you and most of the country have suffered on global warming. Poor KKR – they’re going to go to the trouble and expense for a hoax and ultimately it won’t prevent them from being attacked, those capitalist pigs.” Kelly: “Brilliant PR move by KKR. I wonder if it will release results of the environmental audits, or the progress they make?”

HB on my peHUB post about why Cerberus should not invest in Blackwater (which it now says it won’t): “The only issue for Cerberus or any other investor, PE or not, presuming their investment objectives permit such an investment, should be to evaluate the opportunity for risk and reward. Many investors, of course, would not consider a Blackwater-type investment. A number of tax-exempts are themselves prohibited from investing in companies for which firearms is central to their business and, accordingly, PE sponsors may well prefer to take a pass, even if an investment in a company like Blackwater otherwise was within the scope of their objectives. I assume that Cerberus did take those kinds of considerations into account, but I don’t know and I don’t really care. What would be bad policy is if the investment discretion of institutional investors to invest in otherwise lawfu! l businesses becomes circumscribed, not because of the managers’ investment assessments or the investment policies of their partners, but out of fear that people politically opposed to such a business may injure their reputations. Your post was short of contributing to that, but not by much.”

Charlie: “It doesn’t seem like you’ve been on the road for two weeks. All done for the year?” Just a short reprieve Charlie. But something big is planned for June… Stay tuned.

peHUB First Read, including competition for Libor and a new Kauffman Foundation report with some very interesting findings about the typical age and education of tech entrepreneurs.

Top Three

Bain Capital and KKR reportedly are among the bidders for Unisteel Technology, a Singapore-based disk drive component maker. Macquarie is running the auction, which is expected to generate bids in the range of S$800 million ($588 million).

European Capital has denied a UK newspaper report that it has been banned from making further investments, by parent company American Capital Strategies. It is unclear, however, if the firm’s reply means that it will continue one-stop buyouts, or just mezzanine investments. The initial report was partially spurred by news that European Capital has lost Simon Henderson, managing director of UK buyouts.

Tony Florence and Paul Walker have joined New Enterprise Associates as partners in the firm’s growth equity practice. Florence previously was head of East Coast tech banking with Morgan Stanley, and will focus on IT opportunities. Walker had been a general partner with MPM Capital, and focuses on biotech and life sciences opportunities.

VC Deals

FTrans Corp., a New York-based company that helps B2B sellers receive a loan against accounts receivables to shorten cash collections, has raised $7.5 million in new VC funding. Greenhill SAVP was joined by return backers Total Technology Ventures and New Atlantic Ventures.

Asoyia, an Iowa City–based provider of soybean seeds and oil for the food industry, has raised $4 million in VC funding from Prolog Ventures and Life Science Partners.

Strategic Polymer Sciences Inc., a State College, Pa.-based commercializer of polymeric electronic materials and devices for energy storage and medical therapeutics, has raised $3 million in Series A funding. Chengwei Ventures and Life Sciences Greenhouse of Pennsylvania co-led the round, and were joined by Ben Franklin Technology Partners and Wilson Sonsini Ventures.

Obopay, a Redwood City, Calif.-based mobile payment software company, confirmed that it has raised $20 million in Series D funding. GigaOm first reported the news earlier this month. Essar Communications Holdings Ltd. led the round, and was joined by return backers Richmond Management, Qualcomm, Redpoint Ventures, AllianceBernstein, Citi, Promethean India and Societe Generale.

Buyout Deals

Marsh & McLennan Cos. has rebuffed a $1.5 billion bid for risk consultancy Kroll, from BC Partners and former Kroll European chairman David Buchler.

Platinum Equity has acquired Owens Corning’s composite manufacturing plants in Battice, Belgium and Birkeland, Norway. It also has acquired the IP and business assets related to those facilities. No financial terms were disclosed.

Platinum Equity has acquired Lakewood, Colo.-based chrome wheel distributor Wheel Pros Inc. from Florida Capital Partners, according to LBO Wire. No financial terms were disclosed. Platinum will merge Wheel Pros with existing portfolio company American Racing Equipment Inc.

TPG Capital reportedly is doing due diligence on a possible bid for Royal Bank of Scotland’s £8 billion insurance arm.

PE-Backed IPOs

Safety-Kleen Holdo, a Plano, Texas-based provider of oil collection, re-refining and recycling in North America, has filed for a $300 million IPO. It plans to trade on the NYSE under ticker symbol SK, with Merrill Lynch and JP Morgan serving as co-lead underwriters. The move comes just days after JPMorgan Partners (managed by Warburg Pincus) agreed to sell its majority stake in Safety-Kleen’s European business to Warburg Pincus for approximately £565 million.

According to the S-1, Safety-Kleen’s shareholders include Highland Capital Management (38%), Contrarian Capital Management (19.8%), JPMorgan Partners (11.1%) and GSC Group (9.2%).

PE Exits

Current Group LLC has agreed to sell its existing smart-grid network in Dallas to Oncor Electric Delivery Co. for approximately $90 million. The transaction also includes the sale of some equipment. Current Group is a Germantown, Md.-based provider of broadband-over-powerline solutions, and has raised over $280 million from firms like Liberty Associated Partners, Goldman Sachs, GE Equity, EarthLink, EnerTech Capital and Hearst Corp.

PE-Backed M&A

Hanley Wood Inc., a Washington, D.C.–based B2B media company serving the residential and commercial construction markets, has acquired the TFM Show, a networking event for the building and construction market, according to LBO Wire. The seller is Group C Communications Inc. No financial terms were disclosed. Hanley Wood is owned by JPMorgan Partners (managed by CCMP Capital).

Firms & Funds

Apax Partners is in discussions to sell a piece of its management company, according to Dow Jones. None of the potential buyers have been identified, except that they include suitors from Asia, the Middle East and the United States.

Human Resources

Devinjit Singh has agreed to join The Carlyle Group as a managing director focused on Indian buyouts. He currently heads Citi’s India M&A business.

Joseph Basile has joined Weil, Gotshal & Manges LLP as a Boston-based partner in the firm’s private equity and hedge fund practice groups. He previously was a partner with Bingham McCutchen.

Gary Pritchard has joined Palamon Capital Partners, a European mid-market private equity firm, as chief financial officer. He previously was with Catlin Group, most recently as CFO of its UK division and head of finance operations.

Mark Del Col has joined LaCrosse Global Fund Services as global head of sales and marketing. He previously was a managing director with SWIFT.

Steven Chua has joined Third Avenue Management as a research analyst. He previously was with Goldman Sachs as an associate in the leveraged finance group.