PE Week Wire — Friday 12/20

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Need Boston Celtics tickets? Ask a venture capitalist. Earlier this year, Wycliffe Grousbeck of Highland Capital Partners and Stephen Paliuca of Bain Capital announced plans to buy the fabled NBA franchise for a record $360 million. On Tuesday, the pair unveiled a group of minority investors that included such private equity industry stars as: Paul Edgerley, managing director at Bain Capital; Jim Breyer, general partner of accel Partners; Bill Egan, founder and general partner of Alta Communications; David Roux, a founder of Silver Lake Partners; and Mark Wan, general partner of Three Arch Partners. Each minority investor listed has pledged approximately $10 million to the cause. Also participating at a combined $40 million clip (and joining the team’s executive committee) are James Pallota of Tudor Investments and Glenn Hutchins of Silver Lake Partners. NetMotion Wireless Inc., a Seattle-based supplier of software solutions for wireless networks, today announced the second close of its Series B funding, with a total round of $10.8 million. The round sees the addition of two new investors: Dolphin Equity Partners and Mitsui & Co. Venture Partners (MCVP), as well as additional participation by existing investors Northwest Venture Associates and Alexander Hutton Venture Partners. Cognos (Nasdaq: COGN) has reached a definitive agreement to acquire Adaytum, a Minneapolis-based provider of enterprise performance-planning software, for $160 million. Adaytum has received over $52 million in venture funding from such firms as St. Paul Venture Capital ($15.6 million), 3i Group, Accenture Technology Ventures, American Express and JPMorgan Partners. Cognos expects the deal to be finalized in January.BioRexis Pharmaceutical Corp. of King of Prussia, Pa. recently raised more than $8 million in its initial Series A equity financing. Tullis-Dickerson & Co. Inc., ProQuest Investments and Quaker BioVentures participated in the financing.QuickMedx, a Minneapolis-based healthcare company, today announced it successfully raised $2.7 million in Series A private equity financing. The round was led by TGap Ventures LLC, a new venture capital firm headquartered in Kalamazoo, Mich. Other investors included Affinity Capital Management, Perkins Capital Management and Key Investments.Impres Medical Inc., a Minneapolis-based developer of medical devices for the treatment of gynecological disorders, today announced the closing of a $2.3 million Series A preferred stock venture capital financing led by Technology Funding Inc. Additional investors included Sunflower Capital Partners, Upper Lakes Growth Capital, Portage Equity Investments II and an unnamed major strategic partner.Michael Flaherman, outgoing chairman of the California Public Employees’ Retirement System’s (CalPERS) investment committee, plans to join buyout firm New Mountain Capital as a senior advisor. Flaherman has served on the CalPERS board since 1995, and as chairman since 2000. ClearLight Partners today announced that it acquired Futurelogic Inc. in partnership with the company’s existing management team. ClearLight and Futurelogic’s founding management provided equity in the transaction, while American Capital Strategies provided $27 million of senior, mezzanine, and junior financing and took a small equity stake in the company. Futurelogic is a Glendale, Calif.-based developer of small-format embedded thermal printing subassemblies. DLJ Merchant Banking Partners III, a fund managed by CSFB Private Equity, today completed the sale of $250 million of exchangeable subordinated notes in TXU Energy Co. to various entities affiliated with Berkshire Hathaway Inc. TXU Energy is a wholly owned subsidiary of TXU Corp. DLJ Merchant Banking Partners III initially completed the acquisition of $750 million of notes on November 22, 2002. The notes acquired by Berkshire Hathaway entities have the same terms and conditions as originally agreed to by DLJ Merchant Banking Partners III. Dailey Capital Management announced that three investment funds under its management have acquired the business of Tiro Industries, a Fridley, Minn.-based developer and manufacturer of personal care goods for professional salons. Financing for the acquisition includes senior debt provided by Transamerica Business Capital Corp. and mezzanine financing provided by Ironwood Mezzanine Fund LP and Convergent Capital Partners I LP.Wen Wei Po, a Hong Kong newspaper, is reporting that Warburg Pincus LLC has invested a total of $15 million in Zdsoft Net Co Ltd., an education software developer.NEWS FROM THURSDAY 12/19The California Public Employees’ Retirement System (CalPERS) yesterday agreed to settle a lawsuit filed by the San Jose Mercury News over the release of private equity investment data. Following approval of the settlement by the courts, CalPERS will disclose internal rate of return (IRR) performance data on its Web site (www.CalPERS.ca.gov) for each of the pension system’s 207 private equity funds, including the date the investment was made, the amount of capital drawn down so far and the amount returned to CalPERS in the form of profits. Under the terms of the settlement, the Mercury News will withdraw all claims against CalPERS, including its request for underlying portfolio company information such as quarterly earnings and internal valuations. In addition, this morning’s Mercury News is reporting that CalPERS has agreed to reimburse the newspaper for up to $100,000 in legal costs associated with the case. The Boston Globe is reporting that Celox Networks Inc. will close up shop today, after burning through over $160 million in venture capital funding. The Southborough, Mass.-based optical switch maker was in the midst of raising a new round of convertible note funding (according to an August interview with PE Week), but apparently came up about $35 million short of its $45 million target (according to SEC documents). Among the company’s long list of backers were ABS Ventures, Apex Venture Partners, Bay Partners, DB Investor, Dain Rauscher Corp., First Chicago Venture Capital, Goldman Sachs, JPMorgan Partners, Pilot House Ventures, Putnam Investments, Raza Foundries, Rosewood Capital, SB Cowen, Storm Ventures, Texas Pacific Group and Thomas Weisel Partners. Celox was valued at around $340 million following a $67 million Series B funding in April 2000.Datria Systems Inc., an Englewood, Colo.-based software company focused on speech-enabled applications, announced today that it has secured a $7.5 million Series C round of financing. Technology Partners led the financing and was joined by new investor SAP Ventures, as well as Datria management and existing investors Four States Investments, Greenwood Gulch Ventures, Koch Ventures, Pablo Pick and Quest Capital.Patron Capital Ltd. has reached agreement to acquire 100% control of the largest UK independent multi-site bulk liquid and gas storage operator via a two-step transaction. The first part is a £63.85 million acquisition of Simon Storage Ltd., less bank and inter-company indebtedness, from Simon Group Holdings Ltd. The second step is the Limited; and conditional on the completion of that transaction acquisition for approximately £24.15 million of Vopak Holding Logistics UK Ltd.’s 49.99% interest in Chemicals Oil and Storage Management Ltd., a joint venture company currently owned by Simon Storage and Vopak.Novak Biddle Venture Partners today promoted former principals Andrea S. Kaufman and Philip L. Bronner to the position of partner. Kaufman has advised portfolio companies including Matrics, Object Video and System Detection. Before coming to Novak Biddle, she practiced law in the corporate finance and venture capital practice of Venable, Baetjer, Howard & Civiletti. Bronner, who focuses on enterprise and education software companies, serves as a director for portfolio companies Approva and Logic Library and is a board observer at NEW Corp. and 4GL School Solutions. Northrop Grumman Corp. announced today that it has acquired Fibersense Technology Corp. from Audax Group, a Boston-based private equity firm. The stock of Fibersense, a designer and manufacturer of fiber optic gyroscope-based navigation systems, was acquired for $44 million in cash. VistaCare Inc. (VSTA) finished its first day of Nasdaq trading yesterday at $15.05 per share, after pricing at $12 and opening at $13.05. The Scottsdale, Ariz.-based provider of specialty health-care services for the management of terminal illness has received venture capital backing from Bessemer Venture Partners and Ferrer Freeman & Co. ArrayComm Inc., a San Jose, Calif.-based provider of antenna technology, today announced that its Australian subsidiary CKW Wireless Pty Ltd. (CKW) has secured Mitsubishi Corp. and e-millennium Asia LP as strategic partners, investing AU $14 million (US $7.9 million).Main Street Capital Holdings has acquired Wisconsin Cheese Group of Monroe, Wis. for an undisclosed amount. NEWS FROM WEDNESDAY 12/18White Rock Networks, a Dallas-based provider of next-generation optical transport systems for the local metro transport market, today announced the completion of $42 million in fourth-round venture funding. Existing investor Oak Investment Partners led the deal, and was joined by fellow returnees Mayfield Fund, Meritech Capital, Fremont Communications, Fremont Ventures, Investor AB, Hook Partners, Gulf International Bank and Pacesetter Capital Group. New investor 3i Group also participated on the Series D funding, which now brings the total venture funds raised by White Rock up to $144 million since its 1999 founding. Its last round was a $20 million deal last November at a post-money valuation of approximately $116 million. Frank Walsh, former chairman of 1980’s buyout shop Wesray Capital, plead guilty on yesterday to securities fraud committed while a board member of Tyco International. Walsh, 62, was accused of not telling the Tyco board that he received a $20 million finder’s fee in exchange for his help in arranging Tyco’s 2001 acquisition of CIT Group. As part of the plea agreement, Walsh will replay Tyco the $20 million, plus shell out another $2.75 million in various legal fines. He will not receive any jail time.Vodafone Group PLC announced yesterday that Arun Sarin, CEO of Accel-KKR Telecom, has been picked to succeed current CEO Christopher Gent following the telecom company’s annual meeting next July. Accel-KKR is a technology-focused private equity investment firm founded by venture firm Accel Partners and leveraged buyout firm Kohlberg Kravis Roberts & Co. SiberCore Technologies, an Ottawa-based provider of semiconductor packet management products and solutions to the Internet infrastructure market, today announced the closure of CDN $20 million (US$12.89 million) in venture financing. The deal attracted VenGrowth Capital Partners Inc. and Ventures West Management as new investors, in addition to continued support from Celtic House Venture Partners, McLean Watson Capital and the Business Development Bank of Canada. mValent Inc., a Tewksbury, Mass.-based software company focused on the enterprise IT market, today announced the closing of $5 million in Series A financing from Charles River Ventures and IDG Ventures. As part of the agreement, Chip Hazard from IDG Ventures and Joel Rosen from Charles River Ventures will join the company’s board of directors.The Carlyle Group yesterday announced that it has agreed to acquire a majority stake in CSX Lines LLC from CSX Corp. (NYSE: CSX) in a transaction valued at $300 million. Current CSX Lines President and CEO Charles G. (Chuck) Raymond and his management team will remain in place and the new entity will be called Horizon Lines LLC. Mr. Raymond will also serve as Chairman of the company’s board. CSX Lines, with 17 U.S. flag vessels and 22,000 containers, is the nation’s largest ocean transport company, providing ocean transportation and logistics services to and from the continental United States, Alaska, Hawaii, Guam, and Puerto Rico.CRF Box, a Finland-based provider of validated electronic patient diaries and multi-channel data capture in clinical R&D, today announced that it has secured an additional EUR 6.0 (US$6.2) million in financing. Led by Danske Venture Partners, a Nordic venture capital fund, this investment includes an additional contribution from the existing investors 3i Group and Stratos Ventures. NearSpace ,a Petaluma, Calif.-based software company, has raised $1.5 million from private investors.Kirkland & Ellis, a Chicago-based law firm, is planning to open a San Francisco office focused on IP litigation and private equity. The five-partner shop will be led by existing Kirkland attorneys Jeffrey Hammes and Stephen Johnson.Pfizer Inc. has completed its previously-announced sale of its Tetra aquarium and pond supplies business for $238.5 million to The Triton Fund, an independent European private equity fund. Pfizer had announced in March that it would begin to explore strategic options for the Tetra business, after concluding that Tetra does not fit Pfizer’s current strategic focus.The Winston-Salem Journal is reporting that the city’s board of alderman recently voted to abandon a venture capital program created in 1999. The article says that the program never received any actual funding, nor made any investments.NEWS FROM TUESDAY 12/17 Atlas Venture has once again taken the axe to its sixth investment fund, this time reducing its size from $850 million down to $600 million. The global venture house had originally raised $967 million for the fund in early 2001, but this past June made a 13% cut down to the $850 million figure. In addition, Atlas has confirmed that it is preparing to close both its Seattle, Wash. and Menlo Park, Calif. offices, which means that three West Coast investment professionals will be let go (although they will maintain both a carried interest in Fund VI and certain portfolio responsibilities). The firm is also reducing the size of its Paris, Munich and London offices, with a total of three senior principals leaving Atlas within the next two months. Christopher Spray, a London-based principal with Atlas, told PE Week this morning that the limited partnership amendments were sent out on Sunday, and that he does not expect any glitches in the ratification process. Radiant Medical Inc. a Redwood City, Calif.-based developer of innovative catheter-based endovascular temperature therapy systems, recently closed a $22.4 million Series D financing. Three Arch Partners led the round and was joined by all existing investors: The Sprout Group, Weiss, Peck & Greer Venture Partners, Alta Partners, Highland Capital Partners, InterWest Partners and MedVenture Associates. With the closing of this round, Radiant Medical has raised approximately $66 million to date.Curl Corp. today announced the closing of its $17.9 million Series D round of financing, led by Baker Capital and Equity Group Holdings. Additional investors include Baring Capricorn Venture Fund LLC, Capricorn Venture Fund and Capricorn Venture Partners. The new funding round brings the total amount of investment in Curl Corp. , a Cambridge, Mass.-based company specializing in rich-client Web application development. Transave, a Monmouth Junction, N.J.-based biotechnology company focused on lung disease therapeutics, has successfully raised $12 million via a Series B financing. Easton Hunt Capital Partners and ABN AMRO Capital led the deal. Other investors included Techno Venture Management, which had led Transave’s Series A financing, Sycamore Ventures, CDIB Bioscience and Musket Research Associates. The funding will be used by the company to take its first two product candidates through phase I and phase II studies.Idenix Pharmaceuticals Inc., a venture-backed company formerly known as Novirio Pharmaceuticals Ltd., yesterday asked the SEC to withdraw its $115 million IPO registration statement, originally filed on April 12. The Cambridge, Mass.-based biopharmaceutical company cited “difficult market conditions” in its RW document as the basis for its withdrawal. Since being founded in 1998, Idenix has raised over $68 million over three rounds of venture funding from such firms as MPM Capital, TVM Techno Venture Management, Banc of America Securities, CSFB Private Equity, Nomura International, Novartis AG, Swiss Life Private Equity Partners and the KB Lux Venture Capital fund. Datatrac Corp., an Atlanta-based software developer and wireless communications solutions provider for the time-sensitive delivery industry, today announced the completion of $3 million in Series B funding provided by new investor LogiSpring and existing investor The Megunticook Fund.Latigo Petroleum Inc. has secured a $300 million equity program from Warburg Pincus and JPMorgan Partners to help the Tulsa-based energy company launch an exploration and drilling program, and to make strategic acquisitions. Latigo’s management will also invest in the program, with funding from all parties to be provided over time and subject to certain conditions. Steven Korn, former vice chairman and chief operating officer of CNN, has joined the advisory board of Schroder Ventures U.S.Gotoit Media Corp., an Andover, Mass.-based video-on-demand provider, has raised $6 million in its third round of venture capital funding. Highland Capital Partners led the deal.Pelikan Technologies Inc., a Palo Alto, Calif.-based developer of hand-held glucose monitoring devices for people suffering from diabetes, announced the successful completion of a $14.0 million Series C preferred stock financing round. HBM BioVentures led this round with a number of other seasoned investors, including Mannheim LLC, and Heidelberg Innovation, participating.The Wall Street Journal is reporting that Calvin Klein Inc. is near an agreement to sell itself to Phillips-Van Heusen Corp. in a deal that includes $400 million of cash and additional stock and royalties that could eventually net up to another $300 million. The deal has been stalled for months, but this morning’s article says that talks were rekindled by a recent offer from private equity firm Apax Partners to invest $250 million in exchange for convertible preferred securities in Phillips-Van Heusen plus board seats.NEWS FROM MONDAY 12/16

Benchmark Capital is giving individual investors in the firm’s 1999 side fund the option to not participate in its most recent capital call, according to a letter sent to investors last week For more on this exclusive story, PE week subscribers can go to the protected Weekly Headlines section of www.pewnews.com.
IPWireless Inc. a San Bruno, Calif.-based developer of mobile broadband solutions, today announced it had secured over $27 million in new Series D funding. The round included all of company’s preivous investors: Bay Partners, DCM-Doll Capital Management, Gabriel Venture Partners, GIC of Singapore, J.F. Shea & Co., Northwood Ventures and Oak Hill Capital Partners. An unnamed strategic investor from Asia also invested in the deal, which closed earlier this month. PE Week subscribers can read more about this funding in the protected Deal News section of www.pewnews.com. Striva Corp., a Scotts Valley, Calif.-based provider of enterprise data integration software products, today announced it has secured $12.7 million in Series B funding. Advanced Technology Ventures led the round, and was joined by existing Striva backers Leapfrog Ventures and Silicon Valley BancVentures. PE Week subscribers can read more about this funding in the protected Deal News section of www.pewnews.com. Aperto Networks, a Milipitas, Calif.-based provider of new-generation broadband wireless access systems, today announced it has closed $22 million in Series C equity financing, bringing the company’s total financial backing to $57 million. Canaan Partners led the round with a $7.5 million commitment. Existing investors Alliance Ventures, Innovacom, Tyco Ventures and Satwik Ventures also participated. PE Week subscribers can read more about this funding in the protected Deal News section of www.pewnews.com.

EZchip Technologies, a San Jose, Calif.-based fabless semiconductor company providing high-speed network processors, today announced it has executed a term sheet for its Series C financing totaling $24.5 million.Investors in this round include Goldman Sachs, JK&B Capital, LanOptics Ltd., Star Ventures and Tamar Investments. The funding consists of an initial investment of $13.5 million with an option to invest another $8 million in the future plus a $3 million credit line facility. EZchip, which is a subsidiary of LanOptics Ltd. (NASDAQ:LNOP), will use the proceeds to expand its worldwide sales and marketing activities as well as for the development of the next generations of high-speed network processors.Triversity Inc., a Toronto-based provider of retail point-of-sale and customer-centric solutions, today announced that it has secured $15 million in Series C financing from Technology Crossover Ventures.FdG Associates, a middle market private equity firm, announced today it has acquired the business and assets of Limbach Facility Services Inc. and its subsidiaries in partnership with Limbach’s current management team. Limbach is a leading national provider of comprehensive mechanical and other construction services with annual sales of over $500 million. With the transaction, Limbach and its executive management team regain independence after 16 years of operation as a subsidiary of two different corporations, Vivendi and, most recently, Enron.Meriton Networks Inc. an Ottawa-based developer of carrier-class wavelength networking equipment, today announced that it has secured additional funding of $17 million in equity and debt. VenGrowth Capital Partners Inc. led this Series B round and VenGrowth general partner Dr. Mark Janoska becomes a member of the Mertion Networks board of directors. VenGrowth was joined in the round by existing investors Desjardins Venture Capital Group, Newbury Ventures, Primaxis Technology Ventures, RBC Capital Partners (Telecommunications Fund), Sierra Ventures, Venture Coaches and VentureLink Fund.Partek Corp., part of the Kone Group, Industri Kapital and the management of Paroc have signed an agreement with Banc of America Equity Partners on the sale of shares in Paroc GroupOy Ab to a Finnish holding company owned by a fund administered by Banc of America Equity Partners. The Industri Kapital 1997 Fund will sell approximately 47% and Partek approximately 38% of the shares inParoc. The management of Paroc will have an option to continue its ownership in Paroc.The New York Post is reporting that Blackstone Group is preparing a bid for the American Stock Exchange, which has been on the block for over a year.Luc Vandevelde, chairman of Marks & Spencer, today announced that he plans to launch a new £300m private equity fund. Marks & Spencer announced earlier this summer that Vandevelde’s position as chairman will move to a part-time basis on Jan. 1, 2003, when 60% of his working time will be dedicated to the company. Click here for last week’s complete Wire

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