PE Week Wire — Friday 7/26

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TL Ventures and EnerTech Capital have appointed Pamela A. Strisofsky as Chief Financial Officer of the two Philadelphia-based venture capital firms. As CFO, Strisofsky will be responsible for the financial, legal and administrative aspects of the venture capital funds, which collectively have $1.7 billion currently under management. Strisofsky joined TL and EnerTech as Controller in 1997. The following year, she was named Senior Financial Officer.

Diageo, the world’s leading premium drinks business, today announces that it has agreed to the sale of Burger King Corp. to a group composed of Texas Pacific Group (TPG), Bain Capital and Goldman Sachs Capital Partners. Diageo will receive $2,260 million in cash for Burger King Corp.on a debt free basis. Burger King Corporation will retain a minimum level of working capital, which will include $15 million of cash.

Kohlberg Kravis Roberts & Co. LP announcedtoday that it has agreed to acquire seven businesses from Siemens AGfor a transaction value of EUR1.69 billion. The businesses being acquired include: (1) Mannesmann Plastics Machinery AG(MPM), the leading producer of injection molding and extrusion machinery forplastics manufacturing, (2) Demag Cranes and Components (DCC), the largestworld-wide designer and manufacturer of cranes and crane accessories forindustrial applications, (3) Gottwald Port Technology, a supplier of harborlogistics solutions, (4) Stabilus, a producer of gas springs and hydraulicdampers, (5) Network Systems, a provider of network integration services inthe UK, France & Italy, (6) Metering, a manufacturer of electricity and heatmeters and (7) Ceramics, a supplier of technical ceramics. The sevenbusinesses have a combined turnover of about EUR3.5bn.

NEWS FROM THURSDAY 7/25
Aurora Networks, a Santa Clara, Calif.-based developer of advanced optical transport systems for broadband networks, announced today that it has successfully raised approximately $30 million in a Series B funding, led by the Sprout Group. The capital will be used to increase production capabilities. The Sprout Group joined previous investors Battery Ventures, ComVentures and Castile Ventures in providing this round of funding. To date, Aurora has raised $60 million in funding.

Reconda International Corp., an innovative provider of web-based software products specifically designed to facilitate and enhance WebSphere messaging application development, testing and support, has secured $5 million in financing commitments from a group of investors led by Conning Capital Partners, a Hartford based private equity firm. Other investors include Long River Ventures, LP and other Village Ventures affiliates.

PolyFuel Inc., a Menlo Park, Calif.-based developer of a direct methanol fuel cell for mobile applications, announced today it has secured $15.6 million in its second round of financing. The financing round, led by Vancouver based Ventures West, included Chrysalix Energy LP, Intel Capital, Mayfield, and Technology Partners.

ReShape Inc., an integrated circuit (IC) physical design outsourcing company, today announced the completion of its Series B financing. The round was $12 million in cash, which brings the Mountain View, Calif.-based company’s total venture financing to $18.5 million since its founding in 1997. Canaan Partners (Rowayton, Connecticut and Menlo Park, Calif.) led the investment, with Series A investor New Enterprise Associates (Menlo Park) participating. Jim Furnivall, general partner of Canaan Partners, joins Mark Perry, general partner at NEA, and Moshe Gavrielov, CEO of Verisity, as outside directors.

Schoffstall Ventures LLC will collaborate with Village Ventures Inc., a network of regional venture capital funds, to establish an early-stage venture capital fund to invest in high-growth technology businesses, specifically targeting opportunities in information technology and communications as well as life sciences and materials sciences companies in Central and Northern Pennsylvania. The new Fund will be based in Central Pennsylvania, where Schoffstall Ventures has been located for the previous seven years.

The Fund will be managed by Schoffstall Ventures, LLC, whose management team brings over 20 years in venture capital investment experience to the partnership. The new fund will be managed by Martin Schoffstall, a 20-year veteran of multiple internet start-ups, Dean Kline, formerly of the World Bank, as well as Mark Fedor and Wengyik Yeong, former executives with PSINet. Richard Glaser, Village Ventures’ Regional Managing Director, will represent Village Ventures as a member of the fund’s investment committee. The new fund will become the 16th fund in the Village Ventures, Inc. network.

Arrowsight, a New York-based developer of video monitoring software for security, operational and marketing applications, announced today that it has closed on a new financing of $1.5 million. The Company’s funding came from Oak Street Investments LLC, a private investment and venture firm, and a subsidiary of American Pacific Financial Corporation, a diversified California-based investment company. Balfour Capital Advisors LLC acted as the financial advisor and exclusive placement agent in this financing.

The European Commission has cleared the acquisition by US-based private equity firm Clayton, Dubilier & Rice Fund VI of British food group Brake Bros PLC. The deal is the second-largest European LBO of the year to date.

NEWS FROM WEDNESDAY 7/24
Proficient Systems Inc., the Atlanta-based innovator in multi-channel sales optimization software, announced today that it has raised an additional $6 million to close its previously announced Series B round at a total of $9 million. New investor, GIMV, led the round and other new investors include Labrador Ventures and private investor Michel Akkermans. Existing investors, Kinetic Ventures and Fuqua Ventures, continued to support the Company by participating in the financing, along with Gregg Freishtat, Proficient’s Chairman and CEO. Proficient will use the funds to accelerate its business development and sales and marketing efforts. Michel Akkermans, CEO of Clear2Pay, and the past CEO of FICS and former Chairman of S1 Corporation, will be joining Proficient’s board of directors.

Acusphere Inc., a Watertown, MA-based specialty pharmaceutical company that develops new drugs and improved formulations of existing drugs using its proprietary porous microparticle technology, announced today that it has completed a $15 million round of financing. The financing was led by Thomas Weisel Capital Partners. Other investors in this round included BA Venture Partners, Polaris Venture Partners, Alta Ventures, MVI Medical Ventures, Prism Venture Partners, BancBoston Ventures, Audax Group, Technology Funding, Boston University and CIT Group.

Oculan Corp. today announced that it has completed a $5 million round of Series C financing from its investor group led by Soros Private Equity Partners. The Raleigh, N.C.-based company’s Series C funding will enable the continued expansion of Oculan’s sales, business development, technical support, and marketing operations as the company expands market share and builds on the success of its inaugural year. Launched in July 2001, Oculan has already developed a channel of nearly 150 resellers using an innovative channel strategy and appliance-based network management technology that enables organizations of all sizes to more effectively and efficiently manage their networks.

VirtualScopics LLC, a Rochester, N.Y.-based provider of advanced image-based biomarker analytic technology and services, today announced that it has entered into a multi-year strategic relationship with Pfizer Inc (NYSE: PFE) to accelerate the discovery, validation and application of image-based biomarkers for clinical research. Under the terms of the agreement Pfizer will make an equity investment in VirtualScopics and purchase services over three years. The partnership enables Pfizer to apply VirtualScopics technology to ongoing clinical research in an effort to identify and validate biomarkers correlating to clinical outcomes. The biomarkers may then be used to assess the efficacy of new pharmaceutical compounds in the clinical trial process.

Goldsmith Agio Helms announced today the completed sale of its client, Elm Packaging LP, a portfolio company of the Chicago-based private equity firm Code Hennessy & Simmons LLC, to Tekni-Plex, Inc. (“Tekni-Plex”).

The Israeli Parliament approved a plan that provides a 100% tax exemption for foreigners investing in companies in the development stage, and to make permanent a temporary 100% tax exemption for foreigners investing in Israeli venture capital funds.

Carousel Capital has hired William Hobbs II as its sixth partner. Hobbs joins Charlotte, N.C.-based Carousel Capital from Charlotte-based Wachovia Securities, where he was co-founder of a group that provides investment banking services to private equity firms. Prior to his stint at Wachovia Securities, Hobbs was with Chemical Securities for 11 years.
NEWS FROM TUESDAY 7/23
Blue Falcon Networks, a leading provider of cost-effective digital media delivery solutions, today announced an $8.5 million third round of financing led by Sprout Group, bringing the total capital raised by the company to $20 million. Based in Los Angeles, Blue Falcon develops content delivery solutions that combine highly efficient distributed file transport with sophisticated centralized control and management. Existing investors Draper Fisher Jurvetson, Zone Ventures, and Wasatch Ventures participated in the financing with Sprout Group, the proceeds of which will be used for product development and operations.

SafeStone Technologies, a global leader in secure system and user management, today announced that it has successfully secured $4 million of second-round funding. Despite present economic conditions, funding was secured from Symantec, the world leader in Internet Security and the same group of investors as in January 2000. This investment highlights further endorsement of SafeStone’s continuing strategy and market success. Symantec joins the original investment team of 3i, Europe’s leading venture capital company, SFK99-Rahasta Ky, MeVC Draper Fisher Jurvetson Fund 1, Cross Atlantic Technology Fund LP, Crucible LLC and Larkfield Limited enabling SafeStone to further expand its solution offering and business model.

Newron Pharmaceuticals SpA, an Italy-based clinical-stage company focusing on CNS therapies, announced today the final closing of a euro 25 million financing after receiving an additional euro 6.5 million from Apax Partners. In April 2002, Newron raised euro 18.5 million from Atlas Venture and 3i Group plc in an initial closing. This financing will fund the ongoing clinical evaluation of Newron’s lead compound, safinamide, for the treatment of epilepsy and Parkinson’s disease, advancement of additional products into clinical trials, broadening of development capabilities and allow the company to consider licensing-in of additional products.

Orange Ventures, a leading venture capital fund for the communications industry, today announced that Mike Dolbec, former co-founder and senior vice president of Business Development at OmniSky, and Bill Wiberg, former president of Lucent’s cellular and PCS wireless networks division, have joined Orange Ventures as general partners.

Dolbec and Wiberg will focus on investing and providing strategic guidance to portfolio companies in the wireless infrastructure and data services markets. Dolbec will be based in Orange Ventures’ San Francisco office, and was most recently VP of business development for 3Com. Wiberg will be based in Orange Ventures’ Short Hills, New Jersey office. He comes from a general partner stint at Bowman Capital.

OuterBay, a provider of application data management software, today announced an additional investment of $9 million, bringing total venture capital funding in the company to $19 million. New investor Redpoint Ventures of Menlo Park, Calif., led the round with existing investors, BA Venture Partners and Leapfrog, demonstrating their continued support of OuterBay through the expansion of their initial investments.

GS Capital Partners 2000 LP led an investor group that announced the successful closing of its acquisition of Berry Plastics Corporation. The new investor group, which also included JPMorgan Partners and the company’s current management team, acquired the company from First Atlantic Capital, JPMorgan Partners and Aetna Life Insurance Company for $837.5 million, including repayment of existing indebtedness. Berry Plastics simultaneously closed the financing associated with this transaction, issuing $250 million of 10.75% senior subordinated notes and a $480 million bank facility. Goldman Sachs and JP Morgan Securities acted as joint book runners and co-lead managers for the financings.

The St. Paul Cos. (NYSE:SPC) today announced a second-quarter 2002 net loss of $223 million, or $1.09 per diluted share, including the previously announced $380 million after-tax impact of its settlement of the Western MacArthur litigation in June 2002. The venture capital portfolio was valued at $821 million on June 30, compared with a cost basis of $781 million.

Charles River Ventures (CRV) today announced that Chris Baldwin has been named general partner. Baldwin joined CRV as a partner in 1999 and is focused on making investments in the information technology sector, with an emphasis on storage and networking convergence, optics technologies and new computing paradigms.

Microvision Inc.. (Nasdaq:MVIS), a leader in light scanning technologies, today announced that is has completed a $3 million equity placement, consisting of common stock and common stock purchase warrants. The offering consisted of 937,500 shares of registered common stock and 234,375 shares of common stock purchase warrants exercisable at $4.80 per share through July 22, 2007. The shares were offered under a shelf registration, which allows the Company to issue up to $20 million of various types of securities. The Company now has $15.9 remaining under its shelf registration. Two institutional investors participated in the placement.

NEWS FROM MONDAY 7/22
Nobilis Software Inc., the pioneer in third-generation business process management (3G BPM) technology, today announced that it has completed its third round of venture financing totaling $10 million. The financing was provided by existing private investors. With this funding, Nobilis will continue to accelerate market adoption of its leading process automation solutions for IT organizations and business managers, and will invest in technology to extend those solutions. The company will also continue to fuel internal momentum, which has resulted over the past quarter in significant headcount expansion, new partnerships, client wins and vertical market penetration.

CYA Technologies Inc., a leader in business continuity software solutions, announced today that it has closed the Series A round of financing that was formally announced on May 23, 2002, with the inclusion of $2.5 million from H.I.G. Ventures, a Miami, Florida-based venture capital firm. Terms of the deal were not disclosed. CYA’s investors include: YankeeTek Ventures, a Cambridge, Mass.-based venture capital firm, which led the round, Connecticut Innovations and others.

Castek Inc. today announced a third round of external equity funding valued at $22.8 million (US), the largest private placement in the company’s 12-year history and a significant endorsement of its approach to the development of products and services for the property and casualty insurance market. Technology Crossover Ventures (TCV), of Palo Alto, California, is the lead investor in this round and Henry Feinberg, a venture partner at TCV, will assume a seat on the Castek board of directors. This financing round also includes Netherlands-based p3 Technology Partners and Covington Capital’s TRIAX Fund. Castek will issue 14.8 million Class C Preferred Shares as part of the agreement.

Active Decisions Inc., the world’s leading provider of Guided Selling Lifecycle Solutions used by more than 40 million people via call centers, branches, kiosks, and Web sites, today announced closure of $13.1 million in Series D financing. The Series D round was led by Liberty Partners and included investments from The Charles Schwab Corporation as well as existing investors: Aspen Ventures, Red Rock Ventures, Novus Ventures, InRoads Capital Partners and The Entrepreneurs’ Fund. In addition, Thomas G. Greig, managing director of Liberty Partners and Stephen J. Fisher, also a managing director at Liberty, will join Active Decisions’ board of directors.

Synad, a fabless chip start-up focused on wireless networking, today announced that it has raised $20.7 million in its second round funding exercise. The investment was led by Alta Partners of San Francisco and Alta Berkeley of London. Synad’s seed round investor Celtic House Investment Partners also played a major part in the deal. Two other new investors contributed to the round were NcoTec from London and Rendex Partners of Antwerp.

Isilon Systems, a provider of network storage systems for digital content, today announced the completion of a $15 million second round of financing, in which the company received an increased valuation from its previous round. Sequoia Capital led the financing, the first time the firm has led a round in Washington State. Initial investors Atlas Venture and Madrona Venture Group also participated, bringing Isilon’s total funding to $23.4 million. Concurrent with the financing, Sequoia Capital partner Greg McAdoo has joined Isilon’s board of directors.

Norwood Systems Ltd., an Australia-based leader in Bluetooth-enabled voice and data communications, announces that it has raised an additional (pound)9.5 million ($25.86 Aus Million) in venture capital funding led by Deutsche Bank Capital Venture Partners and Cazenove Private Equity. Other investors who have backed Norwood Systems in this round include Newport Technology Fund and existing investors Argo Global Capital and Innovacom, along with a number of private investors. This latest round of funding occurs within weeks of Norwood Systems announcing the commercial availability of EnterpriseMobility(TM), its wireless solution for affordable in-building communication.

Vanson HaloSource, developers of products using chitin/chitosan- and N-halamine-based technologies, today announced that it has closed on a total of $5 million in its series B round of equity financing, exceeding the original offering cap of $3 million by 67 percent.

UpShot Corp., the leading online, sales-focused CRM provider, announced that it closed its latest round of financing with an additional $10 million in debt and equity. This completes the round, which now totals $27 million. ORIX Venture Finance provided $5 million in debt, and previous investors ABN AMRO Private Equity, Advanced Technology Ventures, Alloy Ventures, and New England Partners put in $5 million in equity.

American Capital Strategies Ltd. (Nasdaq: ACAS) announced today that a company controlled by it has completed the buyout of Automatic Bar Controls Inc., the dominant manufacturer and supplier of hand-held beverage dispensers for the food service industry. In a one-stop shop financing transaction, American Capital invested $35.5 million in the form of a senior term loan, senior and junior subordinated notes and common equity. LaSalle Bank is financing a revolving loan facility. ABC management is rolling over the majority of its equity ownership.

Bermai Inc., a pioneer of ultra-integrated semiconductor solutions for wireless local area network (WLAN) and fixed wireless access applications, today announced the addition of $5 million to its series A funding. An “up round” to the $15 million Bermai announced in March, this new funding brings Bermai’s series A round total to $20 million. Receiving additional funding in a difficult market is a significant endorsement of Bermai’s advanced OFDM (orthogonal frequency division multiplexing) on CMOS wireless technology for the enterprise, home and public access markets, as well as recognition of Bermai’s business model and experienced executive team.

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