PE Week Wire — Friday 10/17

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Apollo Management has agreed to acquire Pittsburgh-based supplement chain GNC for $750 million. The seller is Dutch food company Royal Numico NV, which says that the divestiture will help it better focus on its core businesses. The deal is expected to close before year-end.

Rockwell Collins Inc. (NYSE: COL) has agreed to pay $125 million in cash to acquire NLX LLC from Arlington Capital Partners and company management. Earlier this year, Arlington made a $31.5 million investment into NLX, which is a Sterling, Va.-based provider of integrated training and simulation systems for military and commercial customers. The buyout is expected to close by year-end.

Berry Plastics Corp. has agreed to acquire Landis Plastics Inc. for $228 million, including repayment of existing indebtedness. The purchase price will be funded with a combination of debt, an equity investment from Berry’s existing investors and cash on Berry’s balance sheet. The transaction is scheduled to close in the fourth quarter of 2003 and is subject to customary closing conditions. Berry Plastics is a portfolio company of Goldman Sachs Capital Partners and JPMorgan Partners, both of which will provide equity to help finance the Landis acquisition.

Carl Oppenheimer has been named an associate with New York-based Milestone Venture Partners.

Larry Sonsini and Peter Goodson have joined the board of Silicon Valley Bancshares, the parent company of Silicon Valley Bank. Sonsini is chairman and CEO of law firm Wilson Sonsini Goodrich & Rosati, while Goodson is a retired partner with the private equity firm Clayton, Dubilier & Rice.

Kuwait Finance House of Bahrain and Intellectual Capital Partners Ltd. of New Zealand Have teamed up to create a $100 million private equity fund. The fund is structured to comply with Islamic law, and will focus solely on private equity opportunities in New Zealand and Australia.

Work ‘n Gear, a Weymouth, Mass.-based specialty retailer of work wear, has raised $6 million in venture capital from LongueVue Capital and The Walnut Group. The company also established a credit facility with Wachovia Bank. JNET Communications LLC, a cable services holding company supported by Atlas Holdings and former AT&T Broadband executive David Jefferson, has agreed to acquire the assets and non-debt current liabilities of LDW Inc., a Yardley, Pa.-based provider of installation and construction services to the cable industry. No deal terms were disclosed. Going forward, the company will be known as Vitel, and will operate as a wholly owned subsidiary of JNET.

Centre Partners Management LLC has acquired office supplies and furniture distributor ESS Holdings Corp. and its subsidiaries, EMCO Sales & Service Inc. and Action Wholesale Service Inc. No deal terms were disclosed, except that KeyBank National Association provided the company with a credit facility to assist in the financing.

The SCO Group (Nasdaq: SCOX), the Lindin, Utah-based owner of the UNIX operating system, has received a $50 million private investment led by BayStar Capital. The investment was structured as a private placement of non-voting Series A Convertible Preferred Shares, convertible into common equity at a fixed conversion price of $16.93 per share, which was the average closing bid price for the company’s common stock for the five previous trading days prior to the date of closing. Upon conversion, the investors will own an aggregate of approximately 2,953,000 shares of SCO common stock representing 17.5% of the company’s outstanding shares.

Sam Katz, the Republican challenger to Philadelphia Mayor John Street, released tax returns yesterday that show he made $78,000 in 2002 off of Wynnefield Capital Advisors, a venture capital fund that he helps manage. Overall, Katz earned $792,000 last year.
Siebel Systems Inc. (Nasdaq: SEBL) yesterday announced that it had acquired the assets of one venture-backed company, and had agreed to acquire another. The done deal is for Motiva Inc., a Pleasanton, Calif.-based provider of enterprise incentive management (EIM) software. No deal terms were disclosed. Motiva had raised over $31 million in venture funding since its 1995 inception, from investors like Artemis Ventures, GC&H Partners, InterWest Partners, Palomar Ventures, Sierra Ventures, Silicon Valley BancVentures, Staenberg Venture Partners and Stanford University. Its highest-known valuation was $29 million, following a $15 million infusion in mid-2001.

The other Siebel acquisition will be of UpShot Corp., a Mountain View, Calif.-based provider of hosted customer relationship management (CRM) services via the Internet. The cash transaction is valued at $70 million, which $50 million paid at closing (expected to be in early November) and an additional $20 million to be paid in earn-outs during 2003 and 2004. UpShot has raised over $70 million in private funding since its 1996 inception, from investors like ABN AMRO, Advanced Technology Ventures, Alloy Ventures, Asset Management Co., Frontline Capital Group, Glynn Capital Management, New England Partners, TTC Ventures and Worldview Technology Partners. It’s highest-known valuation was $30 million, following a $10 million infusion in mid-2002.

VantagePoint Venture Partners has invested $50 million into Aviza Technology Inc., a newly-formed company that will acquire, operate and expand opportunities in the semiconductor capital equipment industry. Aviza used a portion of the VantagePoint funding to acquire the Thermal business operations of ASML (Nasdaq: ASML). The management team of Aviza is led by president and CEO Jerry Cutini, a co-founder and former president of OnTrak Systems.

Inmarsat, the UK-based satellite communications company, reportedly will approve a $1.5 billion buyout offer from private equity firms Apax Partners and Permira. The move is a bit of a surprise, especially considering that Inmarsat recently said it would enter non-exclusive negotiations with Apollo Management and Soros Private Equity, following a week of exclusive, albeit failed, negotiations with Apax and Permira. This new agreement could raise the hackles of some in the U.S. Congress, who have suggested that the sale of Inmarsat to a foreign buyer (both Apax and Permira are based in the UK), could lead to security concerns because the company’s satellite network is used by parts of the U.S. military.

GTx Inc., a Memphis, Tenn-based biopharma company focused on therapeutic products for men’s health, has filed to raise $86.25 million via an initial public offering (IPO). The company recently raised $20 million in a Series E venture deal led by Oracle Ventures, which holds a 13.1% pre-IPO ownership stake in GTx. The company plans to trade on the Nasdaq under the proposed ticker symbol GTXI.

Pivotal Private Equity has agreed to acquire Web domain name registrar Network Solutions Inc. from Verisign Inc. (Nasdaq: VERISIGN). Under the terms of the agreement, VeriSign will receive approximately $100 million, consisting of $60 million in cash and a $40 million senior subordinated note. VeriSign, which acquired Network Solutions in 2000, also will retain a 15% equity stake in the company. The transaction is subject to certain closing conditions and is anticipated to close in the fourth quarter.

The New York City Retirement Systems have announced that they will invest up to $175 million into emerging private equity funds. Emerging private equity funds are defined by New York as private equity limited partnerships raising first-time funds with target sizes of $200 million or less. Their investment strategies may include targeting underserved markets for capital, goods or services through such conventional private equity strategies as buyouts, venture capital, mezzanine finance and secondary interests.

Siperian Inc., a San Mateo, Calif.-based provider of customer data integration solutions, has acquired Delos Technology, a Toronto-based developer of information reliability software. No deal terms were disclosed. Delos has received an undisclosed amount of venture backing from Brightspark Ventures, while Siperian has netted around $11.5 million from Anthem Venture Partners, ArrowPath Venture Capital, Blumberg Capital Ventures and Red Rock Ventures.

Strix Systems Inc., a Westlake Village, Calif.-based maker of wireless communications equipment for mobile Internet access, has raised $15 million in new venture funding. Winward Ventures and CMEA Ventures co-led the round, alongside fellow new investor UV Partners and return backers Palomar Ventures and El Dorado Ventures. The company now has raised $34 million since its 2000 inception.

Scott Rocklage has joined 5AM Ventures as a venture partner. Since 1994, Rocklage was CEO of Cubist Pharmaceuticals Inc. and oversaw the development and FDA approval of Cubicin as a new antibiotic treatment. Prior to Cubist, Dr. Rocklage oversaw the development of two other FDA-approved pharmaceutical products as CEO of Nycomed Salutar Inc.

MobiApps, a provider of hybrid terrestrial and satellite technologies for industrial communications, has raised $8 million in new venture funding. 3i Group led the deal, and was joined by Green Dot Capital, a wholly-owned subsidiary of Singapore Technologies. Beacon Advisory of Singapore advised MobiApps on this transaction. The company has offices in Arlington, Va., Bangalore, India and Singapore.

New Venture Partners (NVP), the corporate venturing firm that manages venture spin-outs from Lucent Technology Bell Labs and British Telecommunications, today announced that it has partnered with Royal Philips Electronics. NVP will identify and facilitate spin-out businesses based on the technology and people of Philips Corporate Research laboratories.

Thorntons, a UK-based chocolate maker, is reported to have received a takeover offer from an undisclosed private equity firm. Shares of Thortons stock rose yesterday on the news.

William and Carol Stensrud have gifted $5 million to the University of California‘s new School of Management. William Stensrud is CEO of Ensemble Communications Inc. and a managing partner of venture firm Enterprise Partners.

The Boston Globe is reporting that FleetBoston realized a $92 million Q3 gain from its venture capital portfolio. This is up from a $65 million loss in Q2 2003. The portfolio was valued at $3.1 billion as of September 30, compared with $3.6 billion one year ago.
CoTherix Inc.
, a Belmont, Calif.-based biopharma company formerly known as Exhale Therapeutics Inc., has raised approximately $55 million in Series C funding. MPM Capital led the deal, and was joined by fellow new investors Sofinnova Partners, Frazier Healthcare Ventures and Thomas Weisel Healthcare Ventures. Return backers included Alta Partners, BioAsia Investments, Sofinnova Ventures and Spray Venture Partners. The company now has raised over $65 million since its 2000 founding, and also announced that it has named W. Scott Harkonen as its new CEO.

Freedom Communications Inc., an Irvine, Calif.-based media conglomerate, has agreed to a recapitalization plan led by Blackstone Group and Providence Equity Partners. As part of the deal, Blackstone and Providence will make a significant investment in Freedom and enable continued business control by the descendents of founder R. C. Hoiles, whose heritage and libertarian editorial philosophy will be preserved. JP Morgan Chase Bank has committed to provide a substantial debt facility in support of the recapitalization. There is no official word on the total transactional amount, although early rumors were in the $2 billion range and the Wall Street Journal is reporting $1.7 billion, minus existing debt.

NanoMuscle Inc., an Antioch, Calif.-based maker of miniature motors, has raised $16 million in Series C funding. Investors include Vision Capital, Crossbow Ventures, FirstHand Capital, Capital Valley Ventures, AutoVision, NetPartners, Greyhound Fund, AFA Private Equity Fund, Schneider Electric and PacRim Ventures. NanoMuscle now has raised $23.5 million in venture capital since its 1998 inception.

Arlington Capital Partners and longtime media executive Joe Schwartz have teamed up to formCherry Creek Radio LLC, a radio company acquisition platform focused on small markets throughout the western United States. The new company’s inaugural acquisition is Commonwealth Communications, which currently operates 24 stations in 9 markets.

Lehman Brothers has closed its Lehman Brothers Venture Partners 2003 fund with $300 million. Limited partners include the Canada Pension Plan Investment Board (CPP Investment Board), the Commonwealth of Pennsylvania Public School Employees’ Retirement System (PSERS), Lehman Brothers and Lehman Brothers’ employees.

ResMAE Financial Corp., a Brae, Calif.-based originator and servicer of wholesale specialty residential mortgages, has received an undisclosed investment from TH Lee Putnam Ventures. Dominick Schiano, a former senior executive at Textron Inc., has been named a managing director of Southfield, Mich.-based private equity firm Questor Management Co. Transmode Systems AB, a Stockholm, Sweden-based supplier of transmission equipment for fiber optic networks, has raised $10 million in new funding. Pod Holding led the deal, and was joined by return backers Amadeus Capital Partners and European Equity Partners. The company now has raised $28 million since its 2000 inception.

Ping Identity Corp., the Denver-based provider of federated identity management solutions, has raised $5 million in new financing led by General Catalyst Partners.

Cyternex Inc., a San Diego-based drug development company, has changed its name to Cylene Pharmaceuticals Inc. It also named former Achillion Pharmaceuticals chief William G. Rice as its new president, CEO and director.

UOP LLC has sold its equity position in HyRadix Inc., a Des Plaines, Ill.-based developer of hydrogen generation technology. The buyers are CDP Capital – Technology Ventures and Sud-Chemie Inc.

CenterPoint Data Inc. has acquired Media General Financial Services Inc., a financial information provider that was a wholly owned subsidiary of Media General Inc. (NYSE: MEG). CenterPoint Data is a new company formed, in part, by VS&A Communications Partners, a private equity group affiliated with the media merchant bank Veronis Suhler Stevenson LLC. No deal terms were disclosed.

ShipLogix, a Seattle-based provider of a Web-hosted transportation management system for shippers, has called down the last tranche of a $3 million financing from Alexander Hutton Venture Partners and Odeon Capital Partners.

Aberdeen Murray Johnstone Private Equity has invested £2 million in Scottish bakery business Enterprise Food Group.

American Capital Securities has mande an undisclosed equity investment in Press Ganey Associates Inc., a South Bend, Ind.-based provider of hospital evaluation and improvement services.

The Baltimore Sun is reporting that Baltimore Dredge Enterprises LLC has received an investment of over $1 million from The Baltimore Fund.

Lawrence Benjamin has been named the new head of Ahold‘s U.S. Foodservice unit. Benjamin, who had been CEO of NutraSweet prior to the appointment, also has served as a senior operating executive for private equity firms Oak Hill Capital and Roark Capital Group.

The Newcastle Journal is reporting that four private equity firms are in the bidding for max museum operator , which is being sold by current owner Charterhouse Group. The reported bidders are BC Partners, Permira, PAI and Kohlberg Kravis Roberts.
Allergan Inc. (NYSE: AGN) has agreed to acquire Oculex Pharmaceuticals Inc., a Sunnyvale, Calif.-based biopharma company focused on the treatment of major eye diseases. The deal is worth approximately $230 million in cash, and is expected to be completed by the end of November. Oculex has raised over $65 million in venture capital funding, including a $15 million infusion in mid-2002 at a post-money valuation of just $25 million. Company investors include Bay City Capital, BioAsia Investments, Granite Global Ventures and Perseus-Soros Management Co.

AmpliMed Corp., a Tuscan, Ariz.-based pharmaceutical companies focused on cancer chemotherapies, has raised $5.3 million in Series A funding. Valley Ventures led the deal, and was joined by Biotech Insight Management, Invest Bio and Solstice Capital.

Proofpoint Inc., a Cupertino, Calif.-based provider of anti-spam solutions, has raised $9 million in Series B funding. RRE Ventures led the deal, and was joined by Benchmark Capital, Mohr, Davidow Ventures, inVentures Group and Stanford University. Proofpoint now has raised $16 million in total venture funding, including a $7 million Series A round announced in July of 2003, but actually closed in late December of last year.

The Cypress Group has completed its previously announced acquisition of The Meow Mix Co., a Secaucus, N.J.-based maker of Meow Mix and Alley Cat brand dry cat foods. The deal is valued at approximately $425 million. Company management and previous majority shareholder J.W. Childs & Co. both have retained significant equity stakes in the company.

Aurora Foods Inc. (OTC BB: AURF) has revised its previously announced financial restructuring and entered into a letter of intent with JPMorgan Partners (JPMPM), J.W. Childs Equity Partners, C. Dean Metropoulos and Co. (CDC) and an informal committee of bondholders representing approximately 50% of the company’s outstanding senior subordinated notes. Aurora’s previous agreement with J.W. Childs will be amended to provide for a comprehensive restructuring transaction in which Aurora will be combined with Pinnacle Foods Corp. On August 8, 2003, JPMP and CDM entered into an agreement to purchase Pinnacle from Hicks, Muse, Tate & Furst Inc. JPMP and CDM have subsequently agreed to permit J.W. Childs to invest in the entity that will acquire Pinnacle.

Bristol-Myers Squibb Co. (NYSE: BMY) and Corgentech Inc., a South San Francisco-based biotech company, have entered into an agreement to jointly develop and commercialize Corgentech’s E2F Decoy (edifoligide sodium), a E2F Decoy treatment currently in Phase III development for the prevention of vein graft failure following coronary artery bypass graft and peripheral artery (i.e. leg) bypass graft surgery. Bristol Myers will provide Corgentech with $45 million in a cash and equity investment, and could provide up to an additional $205 million in clinical and regulatory milestone payments. Corgentech previously had raised nearly $70 million in venture capital, including a $50 million round in mid-2002 at a post-money valuation of approximately $107 million. Investors included Alta Partners, Bear Stearns Health Innoventures, CDIB Biotech, HBM Partners, InterWest Partners, JPMorgan Partners, MC Capital, Pacific Venture Capital Co. and Temasek Capital.

MX Logic Inc., a Denver-based provider of email protection and security solutions, has raised $5.5 million in Series C funding. Adams Street Partners led the deal, and was joined by Grayhawk Venture Partners and Vista Ventures.

Thomas H. Lee Partners has agreed to acquired Michael Foods Inc. from Vestar Capital in a deal valued at approximately $1.05 billion. The firm teamed up with Michael Foods Chairman and CEO Gregg A. Ostrander and other senior management for the transaction, which is expected to close before year-end.

Phenomix Corp., a San Diego-based drug discovery company, has received $3.5 million in new commitments from existing venture backers, bringing the company’s total first-round funding up to $35.5 million. The Series A commitment in March 2002 for $32 million was a staged investment with an initial $12 million funding and two subsequent $10 million tranches. The second tranche has been increased to $13.5 million, reserving the remaining $10 million to anchor a future Series B round. The additional funding commitment was co-led by Alta Partners and Sofinnova Ventures, and included Bay City Capital, CMEA Ventures, GBS Venture Partners and Versant Ventures.

Xcyte Therapies Inc., a Seattle-based biotech company, last Friday filed for a$75 million initial public offering (IPO) on the Nasdaq under proposed ticket symbol XCYT. The company has raised approximately $73 million in venture capital funding, with major investors including ARCH Venture Partners (18.6% pre-IPO ownership stake), MPM Capital (12.8%), Sprout Group (11.4%) and Alta Partners (10.7%).

Favrille Inc., a San Diego-based biotech company focused on treatments for cancer and auto-immune diseases, has raised $10.6 million in Series B-2 funding. The deal is an extention of an earlier $16.9 million Series B-1 deal closed last year. Sanderling Ventures led the most recent round, alongside return backers Forward Ventures, Alloy Ventures, De Novo Ventures and Lotus BioScience Investment Holdings Ltd. Favrille also received support from new investors Gray Ghost LLC and Heller Financial Leasing Inc., a division of GE Technology Finance.

Elixir Pharmaceuticals Inc., a Cambridge, Mass.-based biopharma company focused on aging, has raised $19 million in new Series B funding from undisclosed investors. This is the second tranche of an earlier Series B funding that closed in February 2003 with $21.5 million from MPM Capital, Oxford BioScience Partners and ARCH Venture Partners. That deal included a post-money valuation of approximately $49 million.

The Colorado Biotechnology Association (CBA) and the Colorado Medical Device Association (CMDA) have joined to form a new bioscience trade group, the Colorado BioScience Association (CBSA). The boards of directors of both groups unanimously approved the merger effective October 1, 2003.
OpVista Inc., an Irvine, Calif.-based developer of optical transport systems for the cable industry, has raised $10 million in Series C funding. Excelsior Venture Partners, a private equity fund managed by U.S. Trust, led the deal, and was joined by fellow return backers Incubic, Sevin Rosen Funds, WK Technologies and United Venture Capital Partners. OpVista now has raised approximately $36 million in venture funding.

ValueClick Inc. (Nasdaq:VCLK) has agreed to acquire Commission Junction Inc., a Santa Barbara, Calif.-based provider of affiliate marketing technology and services. The deal is worth approximately $58 million in cash, and is expected to close in November. Commission Junction has raised around $50 million in venture funding since its 1998 inception, including a $40 million infusion in 2000 at a post-money valuation of approximately $140 million. Investors on that deal included QuestMark Partners, Thomas Weisel Partners and Idealab.

Chevys Inc., an Emeryville, Calif.-based restaurant chain operator, has filed for Chapter 11 bankruptcy protection. The company – which operates such brands as Chevys Fresh Mex, Fuzio Universal Pasta and Rio Bravo – is a portfolio company of Boston-based private equity firm J.W. Childs Associates.

William Wise has joined Houston-based private equity firm Spinel Capital as an executive advisor. Wise recently retired from his chairman and CEO post at natural gas provider El Paso Corp.

The Shansby Group recently provided equity financing to enable to continued family control of Meguiar’s Inc., an Irvine, Calif.-based producer of surface care products for autos.

Frontier Silicon Ltd., a London-based fabless semiconductor company, has received venture capital funding from Apax Partners and Alta Berkeley Venture Partners. No deal terms were disclosed, except that the infusion was over $1 million.

Knotice Ltd., an Akron, Ohio-based provider of e-business market automation solutions to the broadband industry, has raised an undisclosed amount of Series A funding from HVO Partners.

Last Mile Connections Inc., a New York-based telecom services provider, has received Series B funding from existing investor One Equity Partners, the private equity arm of Bank One Corp.

The Trendlines Group, an Israeli marketing and business development consulting firm, has launched a new $25 million venture capital fund. The new effort will be named the Trendlines Israel Fund.

The Carlyle Group and Eurazo have received European Union approval for their $644 million buyout of French tile maker Saint-Gobain Terreal.

Dow Jones is reporting that Cleveland-based Crystal Ventures is looking to raise $150 million for its new fund. The plan is to focus on both Asian and U.S. technology companies, with approximately 65% of the committed capital coming from Asian investors.

The Deal is reporting that Goldman Sachs and Cornerstone Equity are looking to sell True Temper Sports Inc., a golfing products maker they acquired in 1998 from Black & Decker Corp. The reported asking price is $285 million, which would result in a $150 million profit for Goldman and Cornerstone after subtracting long-term debt.

eFinancialNews is reporting that Italian buyout firm BS Private Equity has acquired a majority stake in Selcom Elettronica.

NanoCoolers Inc., an Austin, Texas-based provider of a cooling technology for electronics, has raised $8.5 million in Series B funding from Austin Ventures and Draper Fisher Jurvetson. This news was first reported in the October 3 print edition of PE Week.

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