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General Electric (GE) this morning told Private Equity Week that its GE Equity group will no longer originate new private equity investment opportunities, although it will continue to support its existing portfolio companies. In addition, GE Equity will no longer act as a limited partner in new private equity funds. The GE Equity group – which has pumped approximately $3 billion into nearly 250 companies and funds — will be wound down over a period of a few years while investments are exited, but some layoffs from GE Equity’s 135-employee roster are expected to occur in relatively short order, although company spokespeople could not provide exact dates or numbers. Some employees and select investments will be reallocated to other parts of the corporation.
David Frail, a spokesman for GE, said that the moves are not being made in direct response to a recent downturn in the private equity market. Instead, he said that the move was part of a larger strategic decision to exit volatile investment businesses. Peter Stack, another GE spokesman, said it was possible that other units of GE would occasionally make pre-acquisition investments, but that no “private equity practice” would continue to exist at the firm.
Clayton, Dubilier & Rice (CD&R) announced that Christopher Spencer will be joining the firm as a partner on December 1. He will be based in CDR¹s European headquarters in London. Spencer, 39, most recently served with Candover Investments, having worked closely with European management teams in France, Germany and the Benelux countries.
Manugistics Group Inc. (Nasdaq:MANU) today announced that William H. Janeway, vice-chairman of Warburg Pincus LLC, was appointed as a Class III director to the Company’s Board of Directors, with a term expiring in 2004.
Alliant Resources Group Inc. has agreed to acquire financial planning firm W.H.H. Rees & Co. Alliant is an integrated national distributor of insurance and financial services products, reaching a broad base of middle market clients through a growing network of operating companies. Financing for Alliant’s operations is provided by GTCR Golder Rauner LLC.
Fred Paulsell, a co-founder of the venture capital firm Foster Paulsell & Baker in 1985 has died in his sleep at the age of 63.
News From Thursday 10/24
Want to own a piece of The Boston Celtics? Venture capitalists Wyc Grousbeck and Steve Paliuca agreed to buy the team last month, but still need around 16 more equity partners with a minimum contribution of $10 million each. According to a report in today’s Boston Herald, the new buyers need to have the financing in place by Nov. 10 in order for the deal to go through. The PE Week Wire is not acting as a placement agent on this deal, but will nonetheless accept courtside seats from any eventual buyers.
Netrake, a Plano, Texas-based player in the emerging session controller market for IP networks, today announced that it has secured $20 million in its third round of funding. TL Ventures led the round with return funding support from existing investors, Austin Ventures and Trinity Ventures. Netrake has raised more than $50 million in capital to date. This latest round of financing will support the company’s aggressive nCite(TM) product rollout program and further support global carrier VoIP initiatives.
Pinpoint Networks Inc., a Cary, N.C.-based provider of software and services to global mobile operators, today announced the closing of an additional $4 million in venture funding, from new investor New Enterprise Associates. This investment brings Pinpoint’s total funding to more than $18 million since its 1999 founding.
Burrill & Co., a San Francisco-based life sciences merchant bank today announced the first closing of the $250 million Burrill Life Sciences Capital Fund LP at $67 million. The fund is the seventh in a series of venture capital funds sponsored and managed by Burrill & Co. It was formed to capitalize on the many opportunities created in today’s biotechnology world with the intersection of the genomic and biologic scientific revolution.
ABN AMRO Capital today completed the secondary buyout of Europe’s leading specialist photographic retailer Jessops, following clearance from the European Competition authorities. The £116m deal sees ABN AMRO acquire the company from private equity firm Bridgepoint Capital, which has backed Jessops since the original management buyout in 1996.
Mike Orr, one of our PE Week Football Pool players, will join J.P. Morgan Chase & Co. as a vice president in the I-bank’s Treasury Services M&A Group, effective Nov. 1. He was previously a managing director with Praxeis Merchant Partners.
Array Networks, a Campbell, Calif.-based Web traffic company, announced today that it has received $12.5 million in its second round of institutional funding, bringing the company’s total private equity investment to $43.6 million. US Venture Partners and H&Q Asia Pacific participated in the funding. Both blue-chip investors participated in Array’s previous round of venture financing. The company expects to achieve profitability in 2003 due to the continued strong sales of its Application Networking Architecture (ANA) product families.
Zagros Networks, a Rockville, Md.-based fabless semiconductor company, today announced the closing of an additional $9.7 million in Series B funding. The round brings total capital investment to approximately $16 million. Mohr, Davidow Ventures led the round with significant participation by Novak Biddle Venture Partners. Cadence Design Systems joined in the round as a strategic partner. Zagros will use the funds to expand its sales and marketing infrastructure and to bring to market its unique rate-aware switching fabrics for use in edge, storage and enterprise switching and routing platforms.
Lantern Communications today announced that its current investors have committed up to $10 million additional funding. No additional information is currently available, except that the company’s existing investor roster includes Goldman Sachs, Integral Capital Partners, Madison Dearborn Partners, Menlo Ventures, Mohr Davidow Ventures, Sunrise Capital Partners and Tyco Capital. The San Jose, Calif.-based networking company last raised $62 million of venture capital in September of 2000 at a post-money valuation of $240 million.
Kenneth Rosenstein has joined Goodman & Car LLP as a partner in the Toronto-based law firm’s Financing and Restructuring Group.
Reuters is reporting that Baring Private Equity Asia Fund is investing approximately $5.05 million for a 10.9% stake in Singapore-based Norelco Centreline Holdings Ltd.
News From Wednesday 10/23
Lost in the furor over private market transparency is the fact that corporate venture groups have been disclosing their performance data for years. Last week it was JPMorgan Partners, and today it was St. Paul Venture Capital (SPVC). According to a third quarter earnings release from parent company and sole limited partner St. Paul Cos., SPVC suffered Q3 pretax net realized losses of $109 million. This total included $56 million from the sale of the company’s indirect investments in venture capital partnerships, with a carrying value of $126 million. In addition to generating $70 million of proceeds, these sales relieved the parent company of $77 million in future funding commitments. The SPVC portfolio was valued at $581 million on Sept. 30, 2002, compared with a cost basis of $617 million.
Oculex Pharmaceuticals Inc., a Sunnyvale, Calif.-based pharmaceutical company focused on the development and commercialization of novel proprietary intraocular pharmaceuticals and drug delivery systems, announced the completion of a $50 million round of private financing led by the Perseus-Soros BioPharmaceutical Fund and Bay City Capital. Other investors included Granite Global Ventures, Venture TDF, and BioAsia Investments. Credit Suisse First Boston acted as the placement agent for this transaction. Funds will be targeted to complete clinical development of Oculex’s lead product, currently in Phase II clinical trials for the treatment of persistent macular edema.
Vivendi Universal has agreed to sell its European and Latin American publishing businesses to a consortium consisting of the Lagardère Group, Ripplewood Holdings and publisher John Wiley & Sons. The agreed-upon sale will be carried out on the basis of an enterprise value of €1.25 billion ($1.22 billion) and include VUP’s general literature, reference and educational publishing activities, excluding U.S. publishing group Houghton Mifflin. Vivendi had originally hoped to sell all of its publishing assets in one fell swoop, but it has instead decided to reopen bidding on the Houghton Mifflin assets. It is unclear if the Lagardère Group syndicate is still interested in the U.S. offering. There were two other bids reported for the European and Latin American assets, one of which included PAI Management, Apax Partners, Thomas H. Lee Co. and Blackstone Group.
3E Co. announced that it has completed a management-led buyout of the company from Safety-Kleen Corp. with $25 million in financing provided by Mission Ventures and Frontenac Co. 3E is a Carlsbad, Calif.-based provider of outsourced hazardous materials information management and emergency response services.
Sterling Venture Partners and Pacific Venture Group today announced that they co-led a $7 million Series A round of financing in Centerre Healthcare Corp., a St. Louis-based company which will operate in-patient rehabilitation facilities from a hospital-within a hospital platform. River Cities Capital Funds of Cincinnati also participated in this round.
Reuters is reporting that International Data Group (IDG) is launching a tech-focused venture capital fund in Vietnam, with plans to invest up to $100 million by the year 2010. Initial investments will be between $500,000 and $1 million in each portfolio company, with $5 million to $6 million invested over the life of each company.
The Financial Times is reporting that Pete Magowan has joined London-based venture firm Alta Berkely as a partner. Magowan was previously an executive with microchip manufacturer ARM Holdings.
News From Tuesday 10/22
IPC, a North Hollywood, Calif.-based acute medical care provider (“hospitalists”), announced today that it has secured $15.5 million in a fourth round of venture capital funding that will be used to further fuel the company’s continued growth. BA Venture Partners led the round and was joined by Morgenthaler Venture Partners, CB Health Ventures and Bessemer Venture Partners. All four companies participated in IPC’s $9.25 million third round of funding in 2001 and its $12.5 million second round of funding in 1999. Morgenthaler and Bessemer Series also invested in the company 1998 Series A round.
Envara, a developer of chipset solutions for the wireless networking market, today announced it has raised an additional $6.5 million in its Series C funding round, bringing the deal’s total to $22 million. Investors include West STEAG Partners GmBH (Germany), CDIB Young Associates Capital Partners LP (UK), Top Taiwan Venture Capital Co. Ltd. (Taiwan) and Maxima Capital Management Inc. (Taiwan).
Konarka Technologies Inc., a Lowell, Mass.-based developer of flexible, polymer and nanoparticle-based photovoltaic (PV) technology, announced today that it has closed its Series B round of financing with approximately $13 million. Draper Fisher Jurvetson led the deal and was joined by Zero Stage Capital (Series A lead), Ardesta LLC, ChevronTexaco and Eastman Chemical Co.
Techno Venture Management, a German-U.S. venture capital firm, today announced the closing of TVM V Information Technology at €128 million ($125 million). To date, TVM has raised five funds for a total of €1.097 billion ($1.07 billion).
Sutter Hill Ventures today announced that Ron Bernal has joined the firm as a venture partner focusing on investment opportunities in data-center hardware and software, network equipment and semiconductor markets. Ron was previously a vice president of operations at Cisco Systems. He joined Cisco via the March 2000 acquisition of Growth Networks, a fabless Internet switching fabric semiconductor company, where he was the co-founder, president and CEO. Prior to co-founding Growth Networks, he served as an entrepreneur-in-residence at New Enterprise Associates.
A top European Union court yesterday annulled a European Commission ruling against electrical company Schneider Electric SA from buying rival Legrand SA. It is unclear what this reversal will mean, as the initial ruling against Schneider had cleared the way for a 2.7 billion Euros ($2.63 billion) buyout of Legrand by Kohlberg, Kravis & Roberts (KKR) and Wendel Investissement.
NewScale, an Oakland, Calif.-based provider of service request automation software, announced today that it closed $14 million in venture funding. New investor Menlo Ventures joined original investors New Enterprise Associates (NEA) and Crosslink Capital in this funding round. Tom Bredt of Menlo Ventures also joins the company’s board of directors.
Orthovita Inc. (NASDAQ: VITA), a leading developer of orthopaedic biomaterials, reported today that it sold 500 newly issued shares of Series A 6% Adjustable Cumulative Convertible Voting Preferred Stock to several institutional investors, led by OrbiMed Advisors LLC, on October 18, 2002 for gross proceeds of $5 million. The sale is the second and final portion of a $19 million private placement transaction.
The Pittsburgh Post-Gazette is reporting that three venture capital firms selected last month to oversee the state’s investment in local biotech start-ups are expected to get equal shares of the $60 million earmarked for biotech development. Under the funding plan, Saturn Life Sciences Partners, Pennsylvania Early Stage Fund and Quaker Bioventure are each required to raise a minimum of $30 million in private investments to qualify for any of the state money.
The Wall Street Journal is reporting that Basic Element and IAPO have teamed up to bid on troubled German-U.S. aircraft maker Fairchild Dornier Corp., which is 72%-owned by Clayton Dubilier & Rice, with another 24% owned by Allianz AG. Terms of the bid were not disclosed.
The Globe & Mail is reporting that a former employee of the Caisse de depot et placement du Quebec has alleged in court documents that she was told to provide technical advice on the home construction projects of Claude Seguin, president of CDP Capital-Private Equity, the $15 billion private equity portfolio of Caisse de depot et placement du Quebec. The woman, who is a Montreal-based architect, claimed in papers filed with the Quebec Superior Court that she resisted the assignment, but was told to provide the services anyway. The suit also cites a second incident involving home construction for another Caisse executive.
Virtus Energy Ltd. has closed its $5 million private placement offering with an investment from FirstEnergy Capital Corp. The proceeds will be used for Virtus’ ongoing acquisition, exploration and development programs and for general corporate purposes.
News From Monday 10/21
WaveSmith Networks Inc., an Acton, Mass.-based optical switch developer, recently secured $30 million in its third round of venture capital funding. Previous investors Atlas Venture, Bessemer Venture Partners and Fidelity Ventures co-led the Series C deal. New investors included Argonaut Private Equity and CIENA Corp., the latter of which also signed a global reseller agreement that gives it the right to market WaveSmith’s multi-service switch products. PE Week subscribers can read more about this funding, including valuation information, in the protected Deal News section of www.pewnews.com , or in today’s print edition.
Elogex Inc., a Charlotte, N.C.-based provider of collaborative logistics solutions, has received $17 million of new growth capital from an investor group led by New York-based Fenway Partners. The additional capital will enable Elogex to aggressively pursue its next phase of development and allow the company to expand its infrastructure to support its increasing customer base, which includes two of the top three U.S. retailers.
BAM!, the latest company from serial entrepreneur Roger Sippl, has raised $6.5 million in its first round of institutional venture funding. The company, which focuses on client-side enterprise application integration software, received the new capital from JPMorgan Partners. PE Week subscribers can read more about this funding, including valuation information, in the protected Deal News section of www.pewnews.com, or in today’s print edition.
Movaris, a Campbell, Calif.-based provider of enterprise business process management solutions, will announce today that it raised $8 million in its second round of venture capital funding. Mohr Davidow Ventures led the Series B deal, and was joined by existing backer Redpoint Ventures. PE Week subscribers can read more about this funding in the protected Deal News section of www.pewnews.com
Data Domain, a San Mateo, Calif.-based data protection and storage provider, has successfully raised $9.3 million in Series A funding. Greylock and New Enterprise Associates (NEA) co-led the investment round with Scott Sandell of NEA and Aneel Bhusri of Greylock joining Data Domain’s board of directors.
The Boston Globe is reporting today that it has joined two out-of-state individuals in requesting detailed performance data on private equity investments made by the Massachusetts state pension fund (MassPRIM). The paper also reports that the three firms officially opposing the existing requests are Charles River Ventures, Thomas H. Lee Co. and Hale and Dorr. The initial queries are said to be requesting information on both private equity fund performance, and also valuation information on underlying portfolio company assets. No word yet on what the Globe is asking for.
Elogex Inc., a Charlotte, N.C.-based provider of collaborative logistics solutions, has received $17 million of new growth capital from an investor group led by New York-based Fenway Partners. The additional capital will enable Elogex to aggressively pursue its next phase of development and allow the company to expand its infrastructure to support its increasing customer base, which includes two of the top three U.S. retailers.
ASK, a France-based producer of contactless smart cards, has raised its third tour of financing of 16.3 million Euros. Apax Partners led the deal with an 8 million Euros commitment, and was joined by 3.3 million in combined investments by repeat backers Advent Ventures Partners, LongTerm Partners, CDC-Ixis Innovation, Credit Lyonnais Private Equity and Banque de Vizille. The remaining 5 million euros was provided by new investors AdAstra and iglobe.
The Corven Group has hired Susie Henstridge, formerly of Arthur D. Little. The firm says that Henstridge’s consulting skills will be a valuable addition to its Corven Ventures group, although the majority of her time will be spent consulting with the Corven Partners management consultancy division.
Adena Ventures has hired Andy Zulauf as managing director of the firm’s West Virginia operations. The Associated Press is reporting that Zulauf has been working for the company for months informally while waiting for the U.S. Small Business Administration to complete an extensive background check.
Avir LLC, a Charlotteville, Va.-based developer of patented technology for the remote sensing of chemical and biological agents has announced that Aerwav Holdings LLC has invested in Avir and its Chairman and Chief Executive Officer Robert J. Shiver has joined Avir’s board of directors. Terms of the investment were not disclosed.
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