PE Week Wire — Friday 8/1

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InterDigital Communications Corp. (Nasdaq : IDCC) has acquired substantially all the assets of Tantivy Communications Inc., a Melbourne, Fla.-based provider of wireless data communications technology. The total price tag is $11.5 million, which includes approximately $10 million in cash and the cancellation of approximately $1.5 million in outstanding loan principal and interest. Tantivy had raised approximately $70 million in venture capital since its 1997 inception, including a $49.7 million round in late 2000 at a post-money valuation of over $240 million. Investors on that deal included New enterprise Associates, JPMorgan Partners, North Bridge Venture Partners, Novak Biddle Venture Partners and Venrock Associates.

Datawire Communication Networks Inc., a Toronto-based provider of online transaction delivery solutions, has raised $11 million in Series B funding. New investors included CIBC Capital Partners and Working Ventures Funds, while existing backers EdgeStone Capital Partners and Bryker Technology Partners also participated. The deal terms call for the investors to fund $6.5 million at the initial closing, with an option to fund an additional $4.5 million at a later date.

Abingworth Management, a UK-based venture firm focused on the life sciences industry, has closed on $325 million for its sixth investment fund. The firm also plans to secure an additional $25 million from two new investors, pending certain legal formalities. Of the funds raised, 54% came from the USA, 32% came from the UK and Continental Europe and 14% from the rest of the world. By type of investor: 39% came from fund of funds, 29% from pension funds, 15% from endowments, foundations and universities, 5% from insurance companies and 12% from other investors such as government entities.

Texas Instruments Inc. (NYSE: TXN) has acquired Radia Communications Inc., a Sunnyvale, Calif.-based fabless semiconductor company. Deal terms were not disclosed. Radia has received venture capital backing from such firms as Third Point Management, InnoCal Venture Capital, Firsthand Funds, Pac-Link Ventures and Greenlight Capital Inc.
The Financial Times is reporting that European private equity firm Charterhouse has closed its latest fund with €2.7 billion (approx. $3.01 billion), which is just slightly below its €3 billion target. Charterhouse was spun out of HSBC in 2001.

Harvest Partners portfolio company Associated Materials Inc. has agreed to acquire windows and siding producer Gentek Holdings Inc. for an aggregate purchase price of approximately $118 million in cash.

 

Samsonite Corp. (OTC: SAMC) has closed its previously announced recapitalization plan with Ares Corporate Opportunities Fund, Bain Capital (Europe) and Teachers’ Merchant Bank. Under the recap agreement, the new investors purchased 106,000 shares of a new series of Samsonite’s convertible preferred stock with an initial dividend rate of 8% for $106 million. In addition, Samsonite’s existing senior credit facility was replaced with a new $60 million revolving credit facility.

NEWS FROM THURSDAY 8/1

Archus Orthopedics Inc., a Redmond, Wash.-based developer of a reconstructive implant to treat degenerative diseases of the lumbar spine, has secured $18 million in Series B funding. InterWest Partners and Polaris Venture Partners co-led the deal, and werejoined by return backer MPM Capital.

Oplus Technologies Inc., an Israel-based provider of systems-on-chip and software solutions for digital displays and flat-panel TVs, has raised $10 million in new venture funding. Benchmark Capital and BRM Capital co-led the round, with Giza Venture Capital also participating. The new monies will be used for increased R&D, expanded sales and marketing activities and to open new offices in Asia and in the United States.

ULLICO, which was founded in 1925 to provide insurance and investment services to union pension funds, has removed all directors from office who failed to make arrangements to return profits from improper stock transactions. The move followed the findings of the ULLICO Special Counsel James Thomson (former Illinois governor), and a shareholder demand that such directors return their profits from stock improperly purchased from the company in 1998 and 1999 and sold back to the company in 2000. Those directors who remained on the board were notified that management would seek to remove them from the board if they did not make arrangements to return those profits. At the time the board made its demand, six transacting directors remained on the board. Two have now made arrangements for the return of the money, three have resigned and one director was removed by vote of the shareholders last Friday and subsequently resigned. ULLICO is now considering further steps to obtain the return of those profits from those for whom satisfactory arrangements have not yet been made.

Anibal Palma has been named a Managing Director of investment banking at Provident Group. Palma previously served as Managing Director of Private Equity and Investment Banking Latin America at Inverlink USA.

Tom Vander Schaff has been named Manager of Analysis with Edison Venture Fund. He has over seven years of VC experience, including stints at MMC Capital Communications & Information Fund and CIBC Capital Partners.

William Rosenblatt, a former Partner and head of the corporate insurance group at Dewey Ballantine LLP, has joined Stroock & Stroock & Lavan LLP as Partner and Chair of its Corporate Department Insurance Practice Group.

James Hall, who currently serves as Senior VP of Investments at venture firm GrowthWorks Ltd., has been named to the board of Journal Register Co. (NYSE: JRC).

Bivium Capital Partners announced today the launch of its investment management boutique, created to provide investment management and investment advisory services to public and private pension plans, corporations, family offices and wealthy individuals. The San Francisco-based firm invests in emerging managers, and features Hollis Wealth Management founder Lester Hollis as President and CEO.

Giuliani Partners LLC and Bear Stearns Merchant Banking have formed a strategic alliance to pursue private equity investment opportunities in the security and public safety sectors. Working together, the two firms will invest in companies that provide products or services primarily focused on preparing for, preventing, protecting against, responding to and recovering from a wide array of threats affecting businesses or individuals and their property. Bear Stearns Merchant Banking will initially designate $300 million of capital for prospective investments.

Secure Data in Moition has added Thomas Greig and G. Michael Stakias to its board of directors. Greig is a Managing Director with Liberty Partners, while Stakias is a Venture Partner with Liberty.

Cavium Networks Inc., a Santa Clara, Calif.-based provider of security processing, has raised $18 million in Series C funding. New investors included NeoCarta Ventures, NTT Leasing Co., China Development Industrial Bank and William Jones & Associates. Return backers included Menlo Ventures, Alliance Ventures and Diamondhead Ventures. The company now has raised $41.5 million since its 2000 inception, including an $8 million Series A deal at a post-money valuation of $22 million.

EnergyWindow Inc., a Boulder, Colo.-based provider of energy management and procurement serves for business energy buyers, has raised $600,000 in Series A funding from early-stage venture firm Altira.

Michael Gold, a former Qwest Communications executive has been named President and CEO of Sphera, a Web hosating automation and management software provider. Gold replaces interim CEO Adi Pundak-Mintz, who will reestablish his Sphera board seat and return to his responsibilities as a Partner in Gemini Israel Venture Funds.

American Capital Strategies Ltd. has invested $33 million in the acquisition of Roadrunner Freight Systems Inc., a Milwaukee-based transportation services company. American Capital’s investment takes the form of senior and junior subordinated debt with warrants and common equity. LaSalle Bank N.A. provided a revolving credit facility and senior term loan. Following the transaction, on a fully-diluted basis American Capital will have 75% ownership while management will retain 25% of the company.

Luc Vandevelde, Chairman of retailer Marks & Spencer PLC and Executive Chairman of private equity firm Change Capital Partners, has joined the board of directors at Vodafone Group PLC. He will become a non-executive director of Vodafone on Sept. 1.

Symbol Technologies Inc. (NYSE:SBL) has acquired Covigo Inc., a Menlo Park, Calif.-based provider of software used in developing and deploying mobile computing applications. Terms of the deal were not disclosed. Covigo had raised over $26 million in venture funding, including a $2 million round in early 2002 at a post-money valuation of $7.9 million. Company backers included Comdisco Ventures, GATX Ventures, Levenshon Venture Partners. Nokia Venture Partners and Norwest Venture Partners.

Sun Microsystems Inc. has reportedly signed an agreement to acquire CenterRun Inc., a Redwood City, Calif.-based provider of enterprise software. No deal terms were disclosed, although the Wall Street Journal cites sources who put the price at around $66 million. CenterRun has raised over $24.5 million in venture capital since its2000 inception, from investors Crosslink Capital, Lighthouse Capital Partners, Needham Asset Management and Sequoia Capital.

W.L. Ross & Co. has won a bankruptcy auction for textile maker Burlington Industries. The buyout shop offered $620.1 million, and is expected to receive approval today from a U.S. Bankruptcy Court in Wilmington, Delaware.

NetGear Inc. has raised $98 million after pricing seven million shares of its common stock at $14 per share, as part of an initial public offering (Nasdaq: NTGR). Lehman Brothers acted as the lead underwriter, with Merrill Lynch and UBS Investment Bank acting as co-managers. NetGear had raised over $80 million in private equity since its 1996 founding, with its highest-known post-money valuation coming in at around $214 million. Investors included Pequot Capital Management (34.4% pre-IPO ownership stake), shamrock Capital Growth Fund (23.8%), Blue Ridge LP (12.4%), Halyard Capital Fund (10.6%) and the Abernathy Group (6.5%).

Renal Solutions Inc., a Warrendale, Pa.-based provider of sorbent-based hemodialysis products and services, has closed out its Series A funding with $18 million at a post-money valuation of over $24 million. The company had announced a $14.7 million first closing last year, but now has received additional investments from CID Equity Partners and Gazelle Tech Ventures.

Sosei Co. Ltd., a Japan-based biopharmaceutical company, has raised 1.6 billion yen (approx. $13 million) in second-round funding. Nomura Securities Co. underwrote the deal, and was joined by JAFCO, Tokyo Marine and Fire Insurance, Aozora Investment, SMBC Capital, Japan Asia Investment (JAIC), Resona Capital, Chuo Mitsui Capital and Yasuda Enterprise Development.

Persystent Technology Corp., a Tampa, Fla.-based provicer of automatic repair and security software for PCs and other computing devices, has raised $1.6M in Series A funding. Inflexion Fund led the round, with participation from Tall Oaks Capital and Village Ventures.

The News & Observer is reporting that Research Triangle Park-based Metabolon has raised $4 million in startup funding led by The Aurora Funds. The life sciences company, which had been looking for $6 million, also reveiced investments from Trelys Ventures, Alexandria Real Estate Equities and an investment group led by J. Craig Venter, the founder and former president of Celera Genomics.
NEWS FROM WEDNESDAY 7/30
Ardana Bioscience, a UK-based specialty pharmaceutical company focused on reproductive health, has raised £20 (approx. $32.36 million) in Series B funding. Techno Venture Management led the deal, and was joined by fellow new investor ISIS Equity Partners and return backers Merlin Biosciences, MVM Ltd., ABN AMRO Capital and Green Highlander.

The California Public Employees’ Retirement System (CalPERS) yesterday reported that its one-year return on investment (ROI) was 3.9%, for the period ending June 30, 2003. This represents $4.8 billion in profits after benefit payments and contributions. CalPERS’ private equity and venture capital investments returned $500 million in cash profits, despite posting a loss of 10.6 percent.

Scott Rued has joined Thayer Capital Partners as a managing director. Reed is currently president and CEO of Hidden Creek Industries, an operating company that leads investments in, and management of, industrial manufacturing companies. In other Thayer news, the Washington-based private equity firm told Bloomberg that COO Rick Rickertsen is stepping down, although he’ll remain with the firm as a senior advisor. Other new senior advisors include Jim Forese, formerly the chairman and CEO of IKON Office Solutions, and Dick Snell, formerly chairman and CEO of Federal Mogul.

BitPass Inc., a Palo Alto, Calif.-based provider of a micro-payment system for online content, has raised $1.5 million in Series A funding. Garage Technology Ventures and Cardinal Venture Capital co-led the deal, and were joined by Amicus Capital and Constantin Partners.

CSFB Private Equity and Jostens Inc. announced that DLJ Merchant Banking Partners III has completed its previously announced acquisition of Jostens from Investcorp, MidOcean Partners and other Jostens shareholders at approximately $48 per common share in cash. The transaction had a total enterprise value of approximately $1.2 billion.

The St. Paul Cos. (NYSE:SPC) today announced second-quarter 2003 net income of $214 million, or $.89 per share, up from a second-quarter 2002 net loss of $223 million, or $1.09 per share. Net investment income was $274 million in the quarter, compared to $286 million in the second quarter of 2002 and $281 million in the first quarter of 2003. The decline from first quarter was attributable to a decline in invested asset levels (due to a previously disclosed $747 million payment, which included interest, that was made in mid-January 2003 related to the Western MacArthur asbestos settlement) and lower investment yields. After-tax realized gains of $43 million were primarily driven by venture capital investments, and compared with after-tax realized losses of $24 million in the year-ago period.

Cernium Inc., a St. Louis-based developer of behavior-recognition software for the security industry, has raised $2.8 million in new venture funding. Lurie Investments led the deal, and was joined by Open Prairie Ventures.

Media Publisher Inc., a Berkeley, Calif.-based provider of enterprise software for rich-media publishing automation and management, has raised $1.3 million in Series A funding. The Angels’ Forum and The Halo Fund co-led the round, with participation from Garage Technology Ventures and several individual private investors. This round of funding follows the company’s spin-out from Inktomi Corp. and Yahoo! Inc. in January 2003.

Tellium Inc. and Zhone Technologies Inc. have agreed to a $180 million reverse merger that will result in Oakland, Calif.-based Zhone being listed on the Nasdaq under the ticker symbol ZHNE. Under the terms of the agreement, current Zhone shareholders would own 60% of the combined company. Mory Ejabat, current chairman and CEO of Zhone, will become chairman and CEO of the combined company, which will operate under the name Zhone Technologies. Zhone investors include Glynn Ventures, KKR, Madison Dearborn Partners, New Enterprise Associates, Pacific Corporate group, Texas Pacific Group and U.S. Venture Partners. It has raised over $600 million in venture capital and been valued as high as $817 million.

Actuate Corp. (Nasdaq: ACTU) has completed the acquisition of Nimble Technology a Seattle-based enterprise information integration company. Deal terms were not disclosed. Nimble has raised over $30 million of venture funding since its 1999 inception, from investors like ARCH Venture Partners, Madrona Venture Group and NeoCarta Ventures.

Michael Paddock has been named a managing director with executive search firm The Onstott Group, where he will focus on technology, hardware, industrial and manufacturing companies. He previously led the electronics and manufacturing practice at Russell Reynolds Associates.

Tecnomatix Technologies Ltd. (Nasdaq: TCNO) has agreed to acquire substantially all the assets of USDATA Corp., a Richardson, Texas-based developer of supervisory-level control and manufacturing execution systems. The deal is worth approximately $10.3 million in stock, most of which will go to leading USData shareholder SCP Private Equity Partners.

Monterey Design Systems, a Sunnyvale, Calif.-based provider of silicon virtual prototyping tools, has raised $10.2 million in new funding from Sevin Rosen Funds, Excelsior Venture Partners III LLC, RHO Management Trust, Lucent Venture Partners, Kaufman LLC, and Vertex Partners, among others. The company now has raised over $80 million since its 1997 inception, including a $25 million round in late 2000 at a post-money valuation of $146 million, and an $18.7 million round in late 2001 at a post-money valuation of around $59 million.

NEWS FROM TUESDAY 7/29

Entigo Corp., a provider of warranty chain management solutions, raised $3 million in financing. The financing was provided by the company’s existing investors including Boston Millenia Partners, Ascent Ventures, North Hill Ventures, Birchmere, Advent and Four Seasons Venture Capital. Entigo will use this funding to expand its sales and marketing efforts and increase R&D to enhance its Entigo Warranty product. Entigo’s latest round of investment will help support the company’s growth and sales.

VS&A Communications Partners III LP, the private equity fund affiliated with Veronis Suhler Stevenson (VSS) and 3i Group plc, has completed an agreement to purchase six European directory operations of Verizon Information Services, a unit of Verizon Communications. The acquisition includes a separate simultaneous transaction in which VSS and 3i also purchased Telekom Austria’s 26% stake in Herold AG, resulting in VSS and 3i owning 100% of the Austrian operations. Terms of the transaction were undisclosed.

Media Publisher Inc. (MPI), a provider of enterprise software for rich-media publishing automation and management, today announced the completion of its $1. 3 million Series A venture capital round of funding. Silicon Valley-based The Angels’ Forum and The Halo Fund co-led the round, with participation from Garage Technology Ventures and several individual private investors. MPI will use the capital to accelerate growth through sales and marketing initiatives, broader strategic partnerships, and continued research and development.

Southampton Photonics, a developer and manufacturer of high power fiber lasers and components for the industrial, aerospace, analytical, sensing, and communications sectors, has completed its Series B funding. The capital will be used primarily to accelerate the company’s sales and marketing activities and to provide working capital. Existing investors Amadeus Capital Partners, The Infrastructure Fund, Interwest Partners, Quantum Technology Partners and Sevin Rosen Funds, along with Advent Venture Partners, participated in the round.

Innodia Inc., a biopharmaceutical company engaged in the discovery and development of novel therapeutics for the treatment of diabetes, announced today the completion of a $3 million private placement by CDP Capital – Technology Ventures, a subsidiary of the Caisse de dépôt et placement du Québec. This additional investment brings to $10 million, the current financing round led by Picchio Pharma.

According to The Deal, British spread betting firm IG Group PLC has accepted a GBP$143 million (U.S.$232 million) buyout offer from its management, giving its founder a windfall he plans to use to refurbish his country mansion. Bid vehicle IGGHL, backed by private equity firm CVC and firm’s executive directors, is offering 255 pence per share, a 40.5% premium to IG’s closing price on January 17, the day before founder Stuart Wheeler said he wanted to sell up. Shares in IG Group, which takes bets on anything from the level of the blue-chip FTSE 100 index to the number of goals scored in soccer’s World Cup, were up 4.6% at 252-1/2 pence at 1140 GMT.
NEWS FROM MONDAY 7/28

Plaxo Inc., a Mountain View, Calif.-based provider of email contact list management solutions, has raised $8.5 million in Series B funding. Globespan Capital Partners led the deal, and was joined by fellow new investor Harbinger Venture Management and return backer Sequoia Capital. As part of the transaction, Jon Callaghan of Globespan will join the Plaxo board of directors.

Netezza Corp., a Framingham, Mass.-based provider of business intelligence solutions, has raised $20 million in Series C funding. Sequoia Capital led the deal, and was joined by return backers Matrix Partners, Charles River Ventures, Battery Ventures and Orange Ventures. The company now has raised more than $53 million since its early 2000 inception.

Inovis Inc., an Atlanta-based developer of business commerce automation solutions, has acquired IPNet Solutions Inc., a Newport Beach, Calif.-based provider of supply chain connectivity. Terms of the deal were not disclosed. IPNet Solutions had raised over $61 million of venture capital since its 1996 inception, including a $40 million Series C deal in mid-2000 at a post-money valuation of approximately $170 million. Inovis was launched last Sept. by Golden Gate Capital and other private equity investors that purchased the Supply Chain Enablement (SCE) division of bankrupt Peregrine Systems.

Fierce Wireless is reporting that venture capital investment in WiFi-focused companies has passed the $1 billion mark.

Addamark Technologies Inc., a San Francisco-based provider of data security software, has raised $9 million in Series B funding. Canaan Partners led the deal, and was joined by return backers Battery Ventures and Sierra Ventures. As part of the transaction, Maha Ibrahim of Canaan Partners will join the Addamark board of directors.

William Haffner has been named a managing director in the leveraged finance group of RBC Financial Gtroup. He was previously at Morgan Stanley, where he was a vice president and executive director in the financial sponsor group, covering private equity funds.

Advanced Data Exchange, a Newark, Calif.-based provider of supply chain automation services, has raised $10 million in fourth-round funding. Sandler Capital Management led the deal, and was joined by fellow new investor GKM Ventures and return backers Talkot Capital, Wasserstein Adelson Ventures, Net Market Partners, iCentennial Ventures and Ovation Capital Partners.

Solsoft Inc., a Paris, France and Mountain View, Calif.-based provider of visual network security policy management, has raised $12 million in Series D funding. Return backers included The Carlyle Group, CLAM Private Equity and Rothschild Management, while new investor Logispring also participated. In related news, Solsoft has named Giles Samoun as its new CEO. Samoun actually joined the company in March, following a CEO stint at Qualys Technologies and an entrepreneur-in-residence gig at Benchmark Capital.

VoiceGenie Technologies, an Toronto-based VoiceXML solutions provider, has received $10 million in Series B funding from sole investor Insight Venture Partners. The company previously raised a $6.7 million round of angel funding in June of 2000.

InQuira Inc., a San Bruno, Calif.-based provider of Web self-service and enterprise search software, has raised $9.25 million in Series D funding. Sutter Hill Ventures led the deal, and was joined by return backers Partech International, Walden International and Bank of America. As part of the transaction, Jim White of Sutter Hill will join the InQuira board of directors.

Edison Venture Fund of Lawrenceville, N.J. has closed on $142 million for its fifth venture fund.

Nanox Inc., a Quebec-based provider of autocatalytics technology, has raised around $3 million in second-round funding. Pangaea Ventures led the deal, and was joined by the Solidarity Fund QFL, Business Development Bank of Canada Venture Capital and Sovar.

American Capital Strategies Inc. has invested $42 million in the recapitalization of Escort Inc., a West Chester, Ohio-based provider of automotive consumer electronic devices. GE Capital Funding, a unit of GE Commercial Finance, provided a senior term loan and Huntington National Bank provided a revolving credit facility. Escort’s management and employees are also investing in equity.

Evident Software Inc., a Bloomfield, N.J.-based company formerly known as Apogee Networks Inc., has raised $6.8 million in new venture capital funding from return backers Fidelity Ventures, Granite Ventures, Oak Investment Partners and the Intel 64 Fund.

Bloomberg is reporting that Hicks, Muse, Tate & Furst has not set an official target capitalization for its latest European buyout fund. Instead, it has sent out its offering memorandum to perspective LPs saying that the target will be “determined at the discretion” of fund managers.

PrivateEquityCentral.net is reporting that two energy-focused private equity firms are prepping new billion dollar-plus funds. The report cites sources as saying that Boston-based ArcLight Capital Partners soon will come to market with a $1 billion-plus vehicle, while Greenwich, Conn.-based First Reserve Corp. will be looking for between $1.5 billion to $2 billion.

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