PE Week Wire — Friday 9/5

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Doughty Hanson & Co. has agreed to sell portfolio company FL Selenia SPA to Vestar Capital Partners for ?670 million (approx. $725 million) in cash, including the assumption of debt. Mizuho Corporate Bank and J.P. Morgan have committed to underwrite all of the necessary financing to complete the transaction, while Vestar will provide all of the equity, along with an investment by company management. FL Selenia, which was acquired by Doughty Hanson in April 2000 for ?428 million (including debt financing), supplies 1,500 different products for automotive, commercial and agricultural vehicles. It was originally founded in 1912 as a division of Fiat Auto.

Hans Ostmeier has joined The Blackstone Group as a senior managing director. He also will serve as a senior advisor and head of the firm’s new office in Hamburg, Germany, where he will focus on private equity investment opportunities in German-speaking and Northern European markets. Ostmeier most recently served as a Germany-based managing director with BC Partners, before which he spent several years with Boston Consulting Group as manager of that firm’s Dusseldorf office.

Hispania Capital Partners has made an undisclosed investment in Rossi Publications Inc., publisher of Spanish language newspaper La Raza. Under the new partnership, the name Rossi Publications was changed to PrensAmerica Corp.

James Demme, an investment principal with Sterling Capital Management, has been appointed chairman of the board at The Penn Traffic Co. (OTC BB: PNFTQ.PK). The move is effective upon bankruptcy court approval, which is expected to occur on September 16.

Forbes Medi Tech Inc. (TSX:FMI / Nasdaq:FMTI) has raised $4.65 million in a private placement of 3.13 million common shares. BioAsia Investments led the deal.

UXComm, a Portland, Ore.-based provider of software-based management and control solutions for the storage, network and blade computing markets, has raised $6 million in Series A funding. The deal was co-led by OVP Venture Partners and Foundation Capital, and also included The Lewis Family Trust and Falcon Capital.

Scott Singer has been named managing director and head of a newly formed media and entertainment corporate finance group at Deloitte & Touche. He previously was a principal in the firm. In addition, Carolyn Saacke has joined the new practice as a senior vice president.

Conning Capital Partners (CCP), a division of Conning & Co. and Swiss Re, completed a transaction whereby CCP was spun out into a separate management company, CCP Fund Managers. The newly organized CCP Fund Managers was formed and is wholly owned by the former CCP partners. In connection with the transaction, CCP Fund Managers has become the entity responsible for managing Conning Capital Funds III, V and VI. Swiss Re will continue to sponsor and maintain a significant investment in CCP Fund VI, L.P. Although no longer affiliated with CCP Fund Managers, Conning & Co. has granted CCP Fund Managers the right to continue to use the Conning name in relation to the Conning Capital Funds as long as Swiss Re continues to sponsor these funds.

Finali Corp., a Westminister, Colo.-based provider of live and automated customer care solutions, today announced it has closed $1.25 million in a combination of senior subordinated debt and equity. The Series C funding was provided by Enhanced Capital Partners.

The Virginia Retirement System reported a 2.5% return for the fiscal year ending June 30. Private equity investments posted a 10.8% decline, and currently are valued at $2.1 billion.

Christian Dyvig has joined Nordic Capital as a partner. He previously worked as a managing director with Morgan Stanley.

Scott Mraz has joined buyout firm Quad-C Management Inc. He most recently worked at Saunders Karp & Megrue.

MicroVention Inc., an Aliso Viejo, Calif.-based maker of minimally-invasive treatments for cerebral vascular diseases, has raised $10 million in an extension of its original Series D funding. The company had originally closed on a $19 million Series D round last summer at a post-money valuation of approximately $54 million. Investors on both Series D deals include Crosspoint Venture Partners, Advanced Technology Ventures, De Novo Ventures, Delphi Ventures, Asset Management Partners, U.S. Venture Partners and A.G. Edwards Capital. MicroVention now has raised around $53 million in venture capital since its 1997 inception.

Optical Solutions Inc., a Minneapolis-based provider of fiber-optic broadband solutions for the last mile, has raised $15 million in new venture capital funding. Return backers included Sprout Group, St. Paul Venture Capital, Boston Millennia Partners, Coral Ventures, Intel Capital and Menlo Ventures. Cisco Systems Inc. also joined as a new corporate investor. Optical solutions now has raised approximately $141 million in venture capital, including an $80 million funding in 2000 at a post-money valuation of around $400 million.

Peter Wendell, founder and general partner of Sierra Ventures, has been named to the board of directors at pharmaceutical company Merck & Co. Inc. (NYSE: MRK).

Suez SA has announced that it has sold its Ondeo Nalco water treatment subsidiary for $4.2 billion to a private equity consortium. As reported here yesterday, the buyers include The Blackstone Group, Apollo Management and Goldman Sachs Capital Partners. Ondeo Nalco is based in Napersville, Ill., and employs over 10,000 workers in 130 countries. It generated $2.6 billion in 2002 revenue.

Charter Communications Inc. (Nasdaq: CHTR) has agreed to sell various cable systems serving 235,000 customers to Atlantic Broadband LLC, a cable system acquisition platform formed by private equity firm ABRY Partners, David Keefe and Edward Holleran. The deal is worth $765 million in cash, and includes systems in Florida, Pennsylvania, Maryland, Delaware, New York and West Virginia.

Bain Capital has agreed to lead a $440 million leveraged buyout of Exeter, Pa.-based Keystone Automotive Operations Inc. The sellers are a private equity syndicate that originally bought the company in March 1998 for $200 million. Those investors included Advent International, GE Capital and Littlejohn & Co.

SecureInfo Corp., a San Antonio-based provider of information security solutions to government and commercial organizations, has raised $10 million in new venture funding from Insight Capital Partners.

GAIN Capital, a Warren, N.J.-based provider of online currency trading services, has raised $10 million in Series C funding from Tudor Ventures.

Carbon Design Systems Inc., a Waltham, Mass.-based provider of software products that enable system validation of hardware and software in an enterprise-wide environment, has raised $5 million in new venture funding from Flagship Ventures and Commonwealth Capital.

Mary Jeffries, a general partner and chief operating officer of St. Paul Venture Capital, has been named to the board of directors at barbeque restaurant chain operator Famous Dave’s of America Inc. (Nasdaq: DAVE).

Applimation Inc., a New York-based provider of application management software, has raised $5 million in Series B funding. JMI Equity Fund led the deal, and was joined by return backer Battery Ventures. Applimation was formed in July 2002 by the merger of Crystallize Inc. and Tickmark Solutions Inc.

Daniel Keshian, a venture partner with Greylock, has been named CEO and chairman of iPhrase Technologies Inc., a Cambridge, Mass.-based provider of Web site navigation and search platform software. Greylock is an investor in iPhrase, and Keshian had been serving as a board member.


Saint Gobain has agreed to sell its French tiles and bricks business Terreal to The Carlyle Group and Eurazeo for ?400 million (approx. $432 million). The deal will be financed through a combination of equity and debt, with Carlyle acquiring 60% of the company and Eurazeo acquiring the other 40 percent. Terreal’s management team, led by Herve Gastinel, is actively supporting the acquisition and will invest in the transaction. Terreal had 2002 revenue of ?328 million, 2,000 employees and 22 production sites.

Xtera Communications Inc. has agreed to buy the assets of failed optical networking company Metro-Optix Inc.. No deal terms were disclosed. Metro-Optix had raised over $135 million in venture capital since its 1999 inception, including a $63 million deal in 2000 at a post-money valuation of $588 million and a $53 million deal in 2001 at a post-money valuation of approximately $328 million. Metro-Optix investors included BlueStream Ventures, CenterPoint Ventures (also an Extera backer), Dain Rauscher Corp., Essex Investment Management Co., InterWest Partners, J&W Seligman, JPMorgan Partners, Lightspeed Venture Partners, Sevin Rosen Funds (also an Xtera backer), STAR Ventures and Wasatch Venture Fund. According to the Dallas Morning News, Metro-Optix effectively shut down operations in June after being unable to raise new venture capital. It laid off most of its 170 employees, except for 15 folks kept on to support the company’s remaining customers.

Suez SA, a France-based utility comglomerate, is expected to announce tomorrow that it has agreed to sell its water sewage treatment unit to an investor syndicate led by The Blackstone Group. According to various press reports, the price tag is approximately $4 billion, with other buyers including Apollo Management and Goldman Sachs.

KVS PLC, a UK-based provider of content archiving and email management solutions, has raised $17 million in Series B funding. New investors Index Ventures and FTVentures co-led the deal, and were joined by return backers Cazenove Private Equity, Greenaap Consultants Limited, Lehman Brothers European Venture Capital and Mosaic Private Equity. The company now has raised $37 million since its 1999 inception.

Adam Berger has joined Advanced Technology Ventures as an associate. He most recently was with AsenQua, and was placed at ATV by Glocap Search LLC.

RuggedCom Inc., an Ontario, Canada-based maker of networking technology like Ethernet switches, routers and gateways, has raised Ca$4 million in Series A funding. OPG Ventures led the deal, and was joined by EPCOR Utilities Inc. and E2 Venture Fund.

Citadon Inc., a San Francisco-based provider of project collaboration software, has raised $15 million in Series B recap funding from Insight Venture Capital.

Dow Jones & Co. has agreed to acquire Technologic Partners for an undisclosed amount. Technologic Partners produces tech and financial industry conferences, and publishes e-newsletters like VentureWire.
Bloomberg is reporting that Soros Fund Management plans to launch a new lending business that will include mezzanine, convertible, asset-based and real estate loans. Steven Mnuchin, former chief information officer at Goldman Sachs, will head up the effort.

The Yorkshire Post is reporting that Tim Simpson will leave his director post at 3i Group, and become a partner with Ingram Forrest Corporate Finance.


Venture Law Group has agreed to merge with Heller Ehrman White & McAuliffe LLP. The combined firm will continue to be known as Heller Ehrman White & McAuliffe, although it will use the Venture Law Group brand name for its global emerging-growth company practice. The merger agreement is subject to a final vote of Heller Ehrman and VLG shareholders, which is expected to conclude by Sept. 9. Once complete, Heller Ehrman will feature 720 attorneys and professionals.

BioMedicines Inc., an Emeryville, Calif.-based biopharmaceuticals company that generates new uses for clinical-stage drugs purchased or licensed from major pharma companies, has raised $43 million in Series D funding. The deal closed in late June and represents a down-round, with its $73 million post-money mark being significantly lower than the $118 million post-money valuation BioMedicines received after its $38 million Series C funding in late 2000. New investors on the most recent deal include Adams Street Partners, New Enterprise Associates, Venrock Associates and Sectoral Asset Management, while return backers include Brentwood Venture Capital, Alta Partners, Bay City Capital, InterWest Partners and JPMorgan Partners. BioMedicines filed to go public back in 2000, but later pulled its registration papers.

The Republic Group of Insurance Cos. has completed its $127 million buyout from Winterthur US Holdings Inc., with principal investors including Banc of America Capital Investors, Greenhill Capital Partners, Brazos Private Equity Partners, 21st Century Group, LLC and Norwest Equity Partners. Wand Partners organized the acquisition in support of Republic’s current management. In sad and related news, Republic CEO Bruce Milligan passed away unexpectedly in his home this past Saturday. Bruce Schnitzer, chairman of Wand Partners, will serve as Republic’s interim CEO.

Donald MacKenzie has been named chief operating officer and administrative principal at Atlas Venture. He will be based in the firm’s Waltham, Mass. office, and comes to Atlas following a vice presidential and CFO stint with Weigh-Tronix LLC. In other Atlas personnel news, the firm has promoted Eric Hjerpe to the position of principal and named Ahmet Ozalp as an associate. Hjerpe has joined the firm earlier this year as a venture principal from Siebel Systems, while Ozalp most recently served as vice president of marketing at Narad Networks Inc.

Myogen Inc., a Denver-based biopharmaceutical company focused on cardiovascular diseases, last Thursday filed for a $75 million initial public offering on the Nasdaq. The move comes just one day after Myogen announced that it had raised $40 million in Series D funding (see PE Week Wire 8/28). The company has raised a total of $127.3 million in venture capital financing (plus $5.3 million worth of term loans), most of which came from New Enterprise Associates (28.5% pre-IPO ownership), JPMorgan Partners (20.4%), InterWest Partners (13%), Perseus-Soros Biopharmaceutical Fund (8.1%) and Sequel Venture Partners (6.3%).

Etrials Worldwide Inc., a Morrisville, N.C.-based provider of software that aids in clinical trials, has raised $2.5 million in Series A funding. Prodea led the deal, and was joined by Infologix (BVI) Ltd. and Fred Nazem, managing partner of Nazem and Co.

Mobixell Networks Inc., a New York-based provider of multimedia processing and delivery solutions for mobile systems, has raised $5 million in new venture capital funding. Apax Partners led the deal, and was joined by fellow return backers Comverse Technology Inc. (Nasdaq: CMVT) and Optibase Ltd. (Nasdaq: OBAS), plus new investor Siemens Mobile Acceleration.

Avihu Bergman has been named executive vice president of sales with Gilat Satellite Networks Ltd. (Nasdaq: GILTF). He most recently served as a vice president with Ascend Technology Ventures.

Cyveillance Inc., an Arlington, Va.-based provider of software that monitors intellectual property rights on the Internet, has received an undisclosed strategic investment from Merrill Lynch Investment Managers, Private Equity Partners.

Hershey Foods Corp. (NYSE: HSY) has agreed to sell its gum brands to Farley’s & Sathers Candy Co. Inc., a portfolio company of private equity firm Catterton Partners. The brands include Fruit Stripe chewing gum, Rain-Blo gum balls and Super Bubble bubble gum. No deal terms were disclosed.

Mark Cohen has been named a managing director with Ryan Beck & Co., where he will work within the firm’s financial institutions group. Cohen most recently served as a partner with Adams Cohen Venture Capital LLC. The Pittsburgh Post-Gazette is reporting that bankrupt Internet service provider Stargate Inc. has agreed to sell its assets for $10 million to various buyers. The report says that the deal – which is subject to bankruptcy court approval – includes a $2.9 million sale of Stargate’s commercial unit to E-xpedient Inc., a $6.5 million sale of its residential business to EarthLink and $750,000 for its consulting unit. Stargate had received private equity backing from Alta Communications and RRZ Capital Markets.

The Korea Economics Daily is reporting that memory chip maker Hynix Semiconductor Inc. is nearing an agreement to sell its non-monmory chip assets for $500 million to Citigroup Venture Capital.

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