PE Week Wire — Friday, April 2

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Random Ramblings

A handful of news notes to carry us into Final Four/Opening Day weekend:

Big win yesterday for life sciences VCs, as the Massachusetts House of Representatives passed a bill that promotes in-state embryonic stem cell research. More importantly, they did it by a veto-proof margin of 117-37 (a similar bill already had passed the State Senate 35-2)

The measure removes the requirement that researchers receive local district attorney approval before conducting stem cell research, although it also will give some oversight authority to the Mass. Department of Public Health. Moreover, it includes language that would permit the process of somatic cell nuclear transfer (this is the part to which Romney objects). The process basically involves the cloning of human cells (take a cell nucleus out of an organ or nerve, and then put it into an egg cell that’s had its own nucleus removed), and has not yet been performed in the United States. Proponents, however, argue that it could lead to the most productive type of stem cell research, because it is the most patient-specific. Opponents, however, argue that it is creating life just to destroy it, even though no actual fertilization occurs. In short, they are worried about the slippery slope that could be created by the promotion of any type of human cell cloning. Mass. Governor (and apparent Presidential candidate) Mitt Romney, for example, called it a “radical cloning bill” in a recent radio ad.

The measure had been strongly backed by the local VC community, including NVCA endorsement and financial support from such firms as MPM Capital, Flagship Ventures and Bessemer Ventures Partners (anyone remember another time when entire firms sent checks to support a policy or political cause?). In short, they basically feel that such research could provide the groundwork for the next generation of life sciences companies. It is important to note, however, that the legislation is not like last year’s bond referendum in California, which pumped money directly into in-state embryonic stem cell research. Instead, it just permits a certain type of research to occur (Harvard, for example, already has a well-funded research program up and running).

Chris Gabrielli, a former VC with Bessemer and a 2002 candidate for lieutenant governor, had been helping to lobby for passage of the bill as chairman of Mass 2020. Prior to yesterday’s House vote, he told me that failure to pass the bill would “threaten the feedstock of life sciences venture firms in Massachusetts.” Presumably, he also meant to include out-of-state firms that also invest here. I also asked him if he thinks the Bay State needs a funding bill similar to that of California, and he didn’t seem terribly interested.

** The private markets group of General Motors Asset Management is spinning out, and taking its private equity co-investment and fund-of-funds with it. GM, of course, will retain a significant ownership position in the newly-independent firm once the deal is sealed in mid-May. Charles Froland, managing director of private markets for GMAM, says that talk of the move began well over a year ago, as a way to: (A) Better incentivize – and therefore maintain – the investment staff; (B) Carve-out better third-party relationships by being independent; and (C) To expand their program. He declined to talk fund-raising (those pesky SEC restrictions again), but LPs should expect to see at least one “Performance Capital Management” offering on their desks shortly, if it hasn’t already arrived.

** Q1 IPO numbers are in, courtesy of Thomson Venture Economics and the National Venture Capital Association. Ten VC-backed companies went public on U.S. exchanges last quarter, for a total take of $720.7 million. That’s the lowest total since Q3 2003, and a significant decline from the 27 VC-backed offerings in Q4 2004, which raised approximately $2.99 billion. It also is worth noting that last night’s $92 million pricing of the FastCLick.com IPO is not included in the Q1 numbers, because it did not begin trading in Q1. As for the entire bailiwick of private equity-backed offerings (LBO-backed and other PE-backed inclusive), 25 companies raised $6.92 billion, which barely tops the $6.8 billion raised by 46 companies in Q4 2004.

** Finally, the Wire’s heartfelt condolences go out to the family of Neil Toth, who passed away earlier this week at the age of 43. Neil was chief investment officer for the Ohio State Employees Retirement System, but had stepped down in late January due to his ongoing battle with cancer. Visitation will be today from 3-8 p.m. at the Underwood Funeral Home in Marysville, Ohio, and a service will be held tomorrow at 11 a.m at St. Paul Lutheran Church in Chuckery, Ohio.

FastClick Inc., a Santa Barbara, Calif.-based provider of online advertising solutions, raised $78 million via an IPO of 6.5 million common shares at $12 per share (low end of $12-$14 range). The offering was co-led by CSFB and Citigroup, with FastClick planning to trade on the Nasdaq under ticker symbol FSTC. It had raised $75 million in Series A funding last September at a post-money valuation of $96.54 million. Round participants included Highland Capital Partners, Oak Investment Partners and Disney corporate venture arm Steamboat Ventures. www.fastlcick.com

Qwest Communications International (NYSE: Q) raised its bid for MCI to $8.9 billion, which works out to $27.50 per share ($13.50 in cash, the rest in Qwest stock). The revised deal also includes the possibility that Qwest would raise $2 billion from third-party private equity firms, which would allow Qwest to substitute $2 billion in cash for $2 billion in stock. Earlier this week, MCI’s board accepted a $7.6 billion offer from Verizon Communications (NYSE: VZ).

Odyssey Investment Partners has closed its third private equity fund with $750 million in limited partner commitments. The vehicle will pursue control investments and management buyout opportunities of mid-market companies in the industrial manufacturing, business services and financial services sectors. www.odysseyinvestment.com

Akustica Inc., a Pittsburgh-based MEMS company, has raised $15 million in funding co-led by Rangos Investments and Mobius Venture Capital, according to the Pittsburgh Post-Gazette. The company now has raised $27.5 million in total VC funding since its 2001 inception. www.akustica.com

SecuriCan General Insurance Co., a Canadian pet insurer, has raised Cdn$7.5 million in mezzanine funding from VenGrowth Private Equity Partners. www.securican.ca

3i Group has led a management buyout of Care Principles Ltd., a UK-based provider of specialist care for adults with learning disabilities. 3i has been a Care Principles shareholder since 1997, at which point it took a 38% stake for Gbp1.5 million. The new deal is valued at Gbp90 million, and gives 3i an 85% position, after buying out the founders. www.3i.com www.careprinciples.com

Falcon Capital has acquired Computer Management Consultants, a Tampa, Fla.-based IT consulting firm, for $25 million. www.cmcits.com

HemoSense Inc., a San Jose, Calif.-based maker of blood coagulation monitoring systems for the management of warfarin medication, has filed to raise $34.5 million via an IPO of common stock on the Nasdaq under proposed ticker symbol HEMO. W.R. Hambrecht & Co. is serving as lead underwriter. HemoSense has raised over $38 million in VC funding since its 1997 inception, and lists significant shareholders like MPM Capital, Vanguard Ventures, W Capital Partners and GC Technology Fund. www.hemosense.com

WhittmanHart Inc., a Chicago-based provider of digital communications and process improvement solutions, has acquired both Infinis Inc. of Columbus, Ohio and Insight Interactive Group Inc. of Philadelphia. Both deals were funded through a $25 million private funding round co-led by Key Venture Partners and Ticonderoga Capital. Also participating was new backer Technology Investment Capital Corp. and existing shareholders Topspin Partners and Wheatley Partners. www.whittmanhart.com

Vernalis PLC (Nasdaq: VNLS) has acquired the IP rights and associates assets related to oncology target Pin1 from Pintex Pharmaceuticals Inc., a Watertown, Mass.-based drug company. The deal involves up to 1.5 million in new ordinary shares, assuming the drug makes it into human clinical trials (not expected until 2008). Including possible milestone payments, the entire transaction is not expected to be worth more that $6.5 million. Pintex has raised over $10 million in total VC funding from Canaan Partners, Zero Stage Capital, BioVentures Investors and POD Holding. www.pintex.com www.vernalis.com

Thomson (NYSE: TMS) has acquired MediaSec Technologies GmbH, a Germany-based developer of digital watermarking and copy detection technologies. No financial terms were disclosed. MediaSec had received VC funding in 2001 from Deutsche Post Ventures. www.mediasec.de www.thomson.net

CRC Health Group, a Greenwich, Conn.-based drug and alcohol treatment company, has agreed to acquire Sierra Tuscan LLC, a Tuscan, Ariz.-based provider of programs and services for the prevention and resolution of addictive disorders and behavioral health issues. No financial terms were disclosed. CRC Health Group is a portfolio company of North Castle Partners. www.crchealth.com

Fiserv Inc. (Nasdaq: FISV) has acquired Del Mar Database, a San Diego-based provider of automation systems for small to mid-sized residential mortgage lenders. No financial terms were disclosed. Del Mar Database has received VC funding from Timeline Ventures, MHT Partners and Titan Investment Partners. www.delmardb.com www.fiserv.com

TeraXion Inc., a Quebec-based provider of optical filters for industrial application in high-speed communications networks, has acquired DiCOS Technologies, a Quebec-based developer of optical frequency control and stabilization solutions. No financial terms were disclosed. TeraXion has raised VC funding from Entrepia Ventures, Innovatech and the Business Development Bank of Canada. www.teraxion.com www.dicostech.com

Sun Capital Partners is raising up to $1.5 billion for its fourth fund, according to a regulatory filing. www.suncappart.com

PAI Partners has raised over 483 million euros (approx. $629 million) for its fourth fund, according to a regulatory filing. No target size is listed for the fund, which is being placed by Credit Suisse First Boston. www.paipartners.com

Saunders Karp & Megrue will move into Apax Partners‘ Park Avenue offices on Monday, pursuant to its previously-announced merger. www.apax.com

Stephan Lobmeyr reportedly has agreed to join Change Capital Partners as a partner, effective in June. He currently serves as a director with Hicks Muse (Europe). www.changecapitalpartners.com

Steve Dempsey has joined Greyrock Capital Group as a managing director. He most recently served as a director in the structured finance division of GMAC Commercial Finance.

Neil Toth, former chief investment officer for the Ohio State Employees Retirement System, has passed away at the age of 43. He had stepped down from his position earlier this year, due to his battle with cancer. He leaves behind wife Suzanne, children Colin and Mitchell, parents James and Marilyn and siblings Donald, Lisa, Nadine and Warren. Visitation will be today from 3-8 p.m. at the Underwood Funeral Home in Marysville, Ohio, and a service will be held tomorrow at 11 a.m at St. Paul Lutheran Church in Chuckery, Ohio.

Thursday, March 31

Random Ramblings

Print deadline pressure continues to mount here at Wire central, so time for just a few quick notes:

** A federal bankruptcy judge yesterday denied an involuntary bankruptcy petition brought by eight former Testa, Hurwitz & Thibeault LLP partners against their old firm. She shot down the suggestion that their stakes converted from equity to debt once they left the partnership (which, theoretically, would have made them senior creditors). She also wrote that THT’s current dissolution plan “is an appropriate, efficient and economical means of concluding the affairs of THT, and that no economic benefit to creditors will accrue by keeping the case in bankruptcy.

The only question remaining, therefore, is whether or not the ex-partners will make their case in front of an arbitration panel, as their original partnership agreements required. During last Monday’s hearing, their attorney suggested that they might instead take their grievance to state court, although I’m not sure if that threat was real, or just a rhetorical bluff. A full rundown will be available in Monday’s print edition of PE Week. More importantly, I hope this is this space’s last mention ever of this messy situation, except perhaps as a case study when something similar happens somewhere else.

** In early 2003, a Chinese telco named United Platform Technologies raised $50 million in Series A funding. At the time, it was the third-largest deal ever done for a China-based company. More interestingly, however, it also represented the first China-based investment for a number of U.S.-based VC firms, which had been introduced to the deal by China VC evangelist Lip-Bu Tan of Walden International (Walden led the round). Tan’s belief was that UPT not only would eventually provide strong ROI, but also would help certain U.S.-based firms get more comfortable with the Chinese market.

The reason I bring this up is that it has some parallels to the $11.3 billion SunGard buyout, which was announced earlier this week. Specifically, the SunGard deal includes a number of LBO firms that have relatively little experience in the technology space (Silver Lake and Texas Pacific, of course, not included). My sense is that this is a sort of test case for some of them, particularly because tax regulations will compel them to hold onto SunGard for a while (sorry Blackstone, no quick flip here). If successful, the result would be firms like KKR getting more and more comfortable with large tech LBOs and, given the way fund sizes are rising, would lead to more SunGard-type deals. BusinessWeek’s Justin Hibbard has a similar thought on his blog, and I’ll be writing more about this in the next print edition of Buyouts Magazine.

One unrelated thought on SunGard: Isn’t it amazing that news of the deal didn’t leak earlier than it did? Seven buyout firms (including Carlyle and Tom Lee, which dropped out at the last minute, but were replaced), five lenders, sell-side and buy-side advisors and lots of attorneys all participated, yet it didn’t slip until just before the final signature. Just remarkable…

** One quick follow-up to yesterday’s conversation of Tony Abate leaving Ironside Ventures. Actually, it’s a correction. Bill Sheehan, a general partner with Ironside, did not acknowledge that the firm would not have hit its $150 million fund target, had the firm continued fund-raising (he told me this morning that he feels they could have gotten there). That suggestion was provided by others, and was inappropriately attributed to Bill, for which I apologize.

** Finally, please note that the “Top Secret” button is back and working. It is the bottom button ad on the right-hand side, and can be used to send me anonymous tips. Please feel encouraged to use it.

Lenovo Group Ltd. (HKSE: 992), the Chinese personal computer company that recently agreed to buy IBM’s PC business, has agreed to receive a $350 million strategic investment from private equity firms Texas Pacific Group ($200 million), General Atlantic ($100 million) and Newbridge Capital ($50 million). Approximately $150 million of the deal will be used to help finance the IBM PC acquisition ($1.25 billion in cash and stock, plus $500 million in assumed debt), while the remaining $200 million will be used for general working capital and corporate purposes. www.lenovo.com

Confluent Surgical Inc., a Waltham, Mass.-based maker of bio-surgery products, has raised $23 million in Series D funding. Three Arch Partners led the deal, and was joined by Ascension Health Ventures and return backers Essex Woodlands Health Ventures, SV Life Sciences, Cross Atlantic Partners and HLM Venture Partners. The company has raised over $60 million in total VC funding since its 1998 inception, including a $20 million Series C round in 2002 at a post-money valuation of approximately $45 million. www.confluentsurgical.com

Tom Hirschfeld is leaving J. & W. Seligman & Co., where he had served as head of the firm’s venture capital unit, and as chief operating officer of its overall investment department. The move is effective April 8, after which Hirschfeld will become chief operating officer of hedge fund manager Halcyon Asset Management.

iScience Surgical Inc., a Redwood City, Calif.-based medical device maker focused on ocular diseases, has raised $15 million in Series C funding. Three Arch Partners led the deal, and was joined by return backers Prism Venture Partners, De Novo Ventures, Asset Management Partners and Pacific Horizon Ventures. The company has raised over $23 million in total VC funding since its 2000 inception. www.isciencecorp.com

GroundWork Open Source Solutions Inc., an Emeryville, Calif. provider of open source-based IT solutions, has raised $8.5 million in Series B funding. Mayfield led the deal, and was joined by return backer Canaan Partners. www.itgroundwork.com

InStoreCard Inc., a San Francisco-based provider of multi-channel retail loyalty software, has raised $4 million in second-round funding. Return backers include Canaan Partners, Outlook Ventures and Mobius Venture Capital. www.instorecard.com

Agennix Inc., a Houston-based maker of protein and peptide-based drugs, has raised $22 million in new venture funding. The company has raised $86 million in total VC funding since its inception. www.agennix.com

Trapeze Networks Inc., a Pleasanton, Calif.-based provider of WLAN infrastructure solutions, has raised $13.62 million in Series C funding, according to a regulatory filing. The company has raised over $60 million in total VC funding, with backers including Accel Partners, Redpoint Ventures, Oak Investment Partners, Castile Ventures and DAG Ventures. www.trapezenetworks.com

TA Associates has completed an $85 million recapitalization of 2^nd Story Software Inc., a Cedar Rapids, Iowa–based provider of online tax preparation software and electronic filing services. As a result, TA becomes majority shareholder, with existing owners retaining a significant minority interest. www.TaxACT.com www.ta.com

Behrman Capital has agreed to sell portfolio company Esoterix Inc. to Laboratory Corp. of America Holdings (NYSE: LH) for $150 million in cash. Esoterix was founded by Behrman Capital in 1995, and is an Austin, Texas-based provider of laboratory services. www.esoterix.com

Mellon Ventures has sold L.E. Technologies LLC to Dexter Axle Co., a subsidiary of Tompkins PLC (NYSE: TKS). L.E. Technologies is an Elkhart, Ind.-based maker of recreational vehicle frames and fabricated metal components. It was acquired by Mellon Ventures in an August 2003 leveraged buyout. No financial terms of the acquisition were disclosed. www.letechnologies.com

Vestar Capital Partners yesterday completed its acquisition of Italian cured meats producer Cesare Fiorucci SpA from Cavaliere del Lavoro Ferruccio Fiorucci and his family. The deal was being done in concert with company management, which now hold a 25% position. The entire enterprise value of the transaction is EUR 360 million, with J.P. Morgan Chase & Co. providing debt financing. www.vestarcapital.com

Sony Corp. of America (NYSE: SNE) has received European Commission approval for its proposed $4.94 billion (including $2 billion in assumed debt) buyout of film studio Metro-Goldwyn-Mayer (NYSE: MGM). The deal is being done in partnership with Providence Equity Partners, Texas Pacific Group, Comcast Corp. and DLJ Merchant Banking Partners. www.mgm.com

J.C. Penney Co. shares rose 2.6% to $47.90 yesterday, based on rumors that the company could get a buyout offer led by Cerberus Capital Management. The talk appears to have been sparked by news earlier this week that Cerberus had hired Vanessa Castagna, a former J.C. Penney executive who once was believed to be in line for that company’s top job.

The Blackstone Group and Goldman Sachs reportedly will help Miramax founders Bob and Harvey Weinstein secure funding for their new firm studio, following the brothers’ decision to leave The Walt Disney Co. Their business plan is still being formalized, but likely will require up to $1 billion through the sale of $500 million in equity and $500 million in debt.

Editions en Direct, a portfolio company of Montagu Private Equity, has acquired French horse racing newspapers Paris Turf and Week End from French media group Socpresse. No financial terms were disclosed. www.montagucapital.com

Talisma Corp., a Bellevue, Wash.-based provider of multi-channel CRM solutions, has acquired KnowledgeBase.net, a Los Angeles–based provider of knowledge management software for customer support and self-service. No financial terms were disclosed. www.talisma.com

Veronis Suhler Stevenson has raised $221.5 million to date for its VSS Communications Partners IV fund, according to a regulatory filing. www.veronissuhler.com

Charles Stephenson has joined Natural Gas Partners as a venture partners. He began his relationship with NGP in 1996 as chief operating officer of NGP portfolio company Spring Holding Co., and then as head of a second NGP portfolio company Bravo Natural Resources Inc. www.naturalgaspartners.com

Chris Wilson has joined Denver-based mid-market merchant banking firm Headwaters MB as a managing director. He previously served as a senior managing director with Bear, Stearns & Co., and as a managing partner of Bryant Park Capital. www.headwatersmb.com

The Prostate Cancer Foundation has added three new directors: Jeffrey Marcus, a partner with Crestview Capital Partners; Gary Shansby, founder of The Shansby Group; and Lester Smith, CEO of Smith Energy Co. www.prostatecancerfoundation.org

Jerry Kalov, former chairman of the consumer electronics association, passed away earlier this month after a long battle with leukemia. In 1983, he had founded Kalov Associates, a management consultancy focused on the venture capital community. Two years later, he became president and CEO of Cobra Electronics, and later founded another consulting firm named Kay Associates. He is survived by wife Antje, brother Stu, three sons and four grandchildren.

Wednesday, March 30

Moving Around

Two unrelated – and heretofore unreported – personnel notes to share with you this morning:

Tony Abate has stepped down from his general partner role with Ironside Ventures, a Cambridge, Mass.-based firm whose third fund-raising effort is presently in limbo. Word of his possible departure has been circulating through Boston cocktail conversations since early February, although the final decision came quite recently. Why the buzz? First, Abate is one of the folks who left Battery Ventures as part of that firm’s 2002-2003 downsizing, and local VCs and LPs have maintained an unusually high level of interest in the ex-Battery partners’ fates (i.e., Todd Dagres and the phantom fund with CRV’s Santo Politi).

Second, there is a bit of concern that a number of Boston-area firms have struggled to raise their second and third funds, as evidenced by the recent demise of YankeeTek Ventures. Ironside originally launched Fund III with a $150 million target in early 2004, as its first real foray into the outside institutional market (Ironside was founded in 1998 as an affiliate of Canadian insurer Manulife Financial, and then spun out in 2000 with a $25 million fund backed by rich folks, friends and family). Bill Sheahan, a general partner with Ironside, acknowledges that the firm was unable to hit its target, although he adds that it did secure several significant commitments. Rather than taking a reduced amount, however, Ironside has temporarily tabled the fund-raising process. Part of that decision is due to Abate’s departure, since new documents would have to be drawn up, and every prospective LP would have a new set of questions.

Another, perhaps larger, part is that Ironside is looking at a bunch of strategic options that Sheahan wouldn’t specify, except to call them “very interesting.” I’ve got a couple of guesses, but will reserve those until something formal takes shape in the next 30 to 60 days.

** Switching coasts is a strange saga at Pacific Corporate Group, a La Jolla, Calif.-based advisory that does non-discretionary private equity consulting for such clients as The State of Washington, The State of Oregon and the Ohio Public Employees Retirement System. The firm has a history of some major personnel juggling (it even made an LP “watch list” several years ago, from which it since has been removed), including the recent departure of firm president Scott Tuck after less than two years on the job. Moreover, Craig White left just three months after joining from Callan Associates, and since has turned up at a Sacramento advisory called LP Capital Advisors (he declined to comment about his brief PCG experience).

Anyway, PCG has generally managed to survive such turmoil thanks to its retention of a couple key professionals (Tara Blackburn, most notably). And it will continue to survive, although the potential departure of Scott Vollmer makes things a bit more difficult.

Vollmer currently runs a special-situations fund-of-funds for PCG, which counts the State of Florida as its largest limited partner ($150 million commitment). Interestingly, Florida was advised to commit to the fund by the aforementioned Craig White (while he was still with Callan), but that’s neither here nor there. The bigger issue is that Vollmer is a key man on the fund, and has told PCG that he no longer wants to be part of the organization.

The following is from a confidential settlement communication from Vollmer’s lawyers to PCG’s lawyers, dated March 9: “You [PCG] have directly stated that your goal is to achieve an outcome in which Scott stays with PCG. That is not possible in my opinion… there are very substantial disagreements over what actually happened in the past. Further, Scott is unwilling to continue to be pressured to invest the Fund’s money in obviously inappropriate investments, both because of his obligation to have ‘freedom of judgment’ in selecting investments and because of the failure to disclose to the client that PCG is benefiting in some material way from some undisclosed material way from the placement.” It goes on to propose a solution whereby Vollmer would continue to manage the fund, but that all related revenue and profits would be shared by both Vollmer and PCG.

I called Vollmer at his Connecticut home to discuss the matter, but he didn’t return my message. His attorney also declined to comment.

Chris Bower, founder and CEO of PCG, said that Vollmer is still a current employee of PCG, and that he expects that to be the case going forward. He suggested that my info is outdated (remember, the letter is from March 9), which might mean that some sort of settlement has, indeed, been reached. On the other hand, such a settlement could be easily confirmed if PCG simply asked Scott to say that he’s a current and future employee. That has not happened, and it doesn’t sound like it will. An interesting situation worth following (more details in Monday’s PE Week print edition), particularly considering the $150 million that Florida could pull if the key-man provision is triggered (which Bower says has not happened). Florida officials declined to comment on the matter.

TolerRx Inc., a Cambridge, Mass.-based drug company focused on immune disorders, has raised $31 million in Series D funding, at a pre-money valuation of approximately $72 million. Bear Stearns Health Innoventures led the deal, alongside NIF Ventures and return backers HealthCare Ventures, Rho Ventures, Skyline Ventures, Vertex Management, Sprout Group, Lehman Brothers Healthcare Group, Genentech, Duke University, Aozora Investment and Yasuda Enterprise Development Corp. The company has raised just under $90 million in total VC funding since its 2000 inception, and withdrew a proposed IPO last summer. www.tolerrx.com

Juniper Networks Inc. (Nasdaq: JNPR) has agreed to acquire Kagoor Networks Inc., a San Mateo, Calif.-based developer of session border control technology for IP communication service delivery. The deal is valued at $67.5 million in cash, plus options, equity compensation and certain other considerations. Kagoor has raised around $40 million in total VC funding since its 2000 inception, even though it generated less than $5 million in 2004 revenue. Backers include ComVentures, Siemens Venture Capital, Accel Partners, Intel Capital and VantagePoint Venture Partners. The acquisition is expected to occur in Q2. www.juniper.net www.kagoor.com

KKR and Providence Equity Partners may be getting a boost in their flagging efforts to acquire Adelphia Communications Corp. The New York Times is reporting that Cablevision Systems Corp. may join the private equity firms’ bid, which currently is viewed as an underdog to a competing offer – said to be worth more than $18 billion in stock — from Time Warner and Comcast.

SiliconStor Inc., a Fremont, Calif.-based provider of silicon solutions for enterprise storage, announced that it has raised $9 million in its first institutional round of funding (dead actually closed in December 2004). VSP Capital led the deal, and was joined by APV Technology Partners. The company previously raised $3 million in seed funding from individuals. www.siliconstor.com

Eonstreams Inc., a Knoxville, Tenn.-based provider of streaming media solutions, has raised an undisclosed amount of venture funding from the Southern Appalachian Fund. www.eonstreams.com

Tangoe Inc., a New Haven, Conn.-based provider of telecom expense management software solutions, has received $1.75 million in follow-on funding from the Edison Venture Fund. Edison is Tangoe’s sole institutional backer, and now has invested a total of $6 million. www.tangoe.com

COLED Technologies Inc., a Longmont, Colo.-based developer of display technologies, has received an undisclosed amount of Series A funding from ITU Ventures. According to an SEC filing from last fall, the company had been looking for just over $2 million. It previously raised seed funding from ITU and HCF Partners.

Citigroup Venture Capital has agreed to sell German electronics and engineering company Flender Holding GmbH to Siemens AG for 1.2 billion euros. www.flender.com

CVC Capital Partners has contacted Spain-based clothing retailer Cortefiel SA about a buyout, according to Dow Jones. The report says that while Cortefiel will look at any offers, it is not actively seeking to be acquired.

Loftware Inc., a York, Maine-based maker of barcode identification solutions (including RFID), has completed a recapitalization led by the Private Capital Group of BNP Paribas. Greyrock Capital Group also participated. www.loftware.com

The Carlyle Group has put The Relizon Co. up for auction, according to The Deal. Relizon is a Dayton, Ohio-based provider of document management services, and was acquired by Carlyle in 2000 for $360 million from Reynolds and Reynolds Co. www.relizon.com

Glencoe Capital LLC has acquired Entertainment Resource Inc. from Palm Beach Capital. No financial terms were disclosed. ERI is a Dania, Fla.-based distributor and merchandiser of family-oriented home entertainment products sold primarily in grocery stores and drug stores. www.entertainmentresource.com

Bridgepoint has sponsored a management buyout of Tilney Group, a UK-based asset management company focused on high-net worth clients. No financial terms were disclosed. www.tilney.com

AirBand Communications Inc., a Dallas-based fixed wireless company, has acquired the fixed wireless assets of Baltimore-based broadband service provider Accelacom LLC. No financial terms were disclosed. AirBand has raised over $56 million in VC funding since its 2000 inception, from Sevin Rosen Funds, Crescendo Ventures, Battery Ventures, CDB Web Tech and PacRim Venture Management. www.airband.com www.accelacom.com

Semotus Solutions Inc. (Amex: DLK) has acquired Expand Beyond Corp., a Chicago-based provider of real-time mobile business software. No financial terms of the stock-for-stock transaction were disclosed. Expand Beyond has raised over $14 million in VC funding since its 2000 inception, from CrossBridge Venture Partners, Menlo Ventures and angel backers. www.semotus.com www.xb.com

Rauch Industries Inc., a Gastonia, N.C.-based portfolio company of Milestone Capital Partners, has acquired Christopher Radko, a provider of luxury Christmas ornaments and decorations. No financial terms were disclosed for the deal, which was originated by RK Capital Partners. www.christopherradko.com

Lincoln Educational Services Corp., a West Orange, N.J.-based for-profit provider of post-secondary education, has filed to raise $143.75 million via an IPO of common stock. It hopes to trade on the Nasdaq under proposed ticker symbol LINC, with Merrill Lynch & Co. serving as lead IPO underwriter. Lincoln Educational has been controlled since 1999 by private equity firm Stonington Partners, while Five Mile River Capital Partners also is a significant shareholder. www.lincolneducationalservices.com

ITC Holdings Corp., a Novi, Mich.-based electricity transmission company, has filed to raise $300 million via an IPO of common stock. It hopes to trade on the NYSE under proposed ticker symbol ITC, with Lehman Brothers, CSFB and Morgan Stanley serving as co-lead underwriters. ITC Holdings originally was the transmission unit of DTE Energy, but was bought out in 2002 for $610 million by Kohlberg Kravis Roberts & Co. and Trimaran Capital Partners. www.itctransco.com

Submarino SA, a Brazil-based online retailer, has raised approximately $175 million via an IPO on the Sao Paulo Stock Exchange’s New Market. CSFB lead managed the deal. Submarino is backed by such private equity firms as TH Lee Putnam Ventures, Goldman Sachs and Warburg Pincus. www.submarino.com

StageOne Ventures is raising its second fund with a $100 million target, according to Israeli press reports. www.stageonevc.com

Jaime Guzman-Fournier was appointed associate administrator for the Small Business Administration’s Office of Investment, where he will oversee a portfolio of 440 active SBIC licensees with total committed capital of approximately $25 billion. He had been serving as acting associate administrator for the program. www.sba.gov/inv

Daniel Levinson has left his partner position with BerchWood Partners to form Pine Ridge Advisors, a Greenwich, Conn.-based advisory firm focused on helping private equity and venture capital firms market new funds. www.pineridgeadvisors.com

Thomas Burchill and William Harrison have joined mid-market M&A boutique The Silverfern Group as managing directors. Burchill most recently served as a general partner with Viridian Capital Partners, while Harrison worked in the New York M&A group of CSFB. www.silverfern.com

Tuesday, March 29

Carlyle Is King (At Least for Now)

In late February, I shared the following email from a pension fund manager: “Can you send a message to the general partner community, and tell them that there is no physical way that they can all close their next fund on March 31?” My understanding is that no one really took that advice, as there a literally dozens of funds closing – or at least trying to close – this week. For example, this space already has mentioned Austin Ventures raising $525 million, while a notable California venture firm should hit $1 billion by Thursday, despite having not allowed repeat participation from public California pension systems, due to disclosure concerns (public pension systems in other states, however, were accepted).

The biggest of this bunch, however, is The Carlyle Group, which has closed on a pair of mega-LBO funds: $7.85 billion for its U.S.-targeted Carlyle Partners IV, and approximately $2.2 billion for its Carlyle Europe Partners II fund (the European vehicle was technically denominated in euros). That’s grand total of $10.05 billion, which pushes Carlyle just past the $10 billion mark that The Blackstone Group is doggedly pursuing for its next global fund. Of course, Carlyle Group originally sent out books with a $5 billion target (later informally upped it to $6.5 billion), and still had to turn down around $2 billion in additional commitments. In other words, Blackstone might certainly be able to hit $10.06 billion or higher, if being the biggest matters as much to them as it seems to.

One quick note, Carlyle Partners IV held a first close on just under $5 billion in late December 2004, but has not yet begun disbursing any of the capital (although it probably would have tapped that well had it participated in the SunGard deal). Instead, Carlyle still has a small bit of dry powder left in the $3.9 billion Carlyle Partners III, which is expected to be used up shortly.

** This space will discuss VC-backed and PE-backed IPO numbers right after the quarter ends, but the underwriter calendars make it look like the current numbers could be the final ones. There is a chance that FastClick will price on Thursday (i.e., 3/31), but that would count in Q2 numbers, since we count IPOs when a company begins trading, not when it prices.

** A few events I want to make you aware of. First, we’re teaming up with Goodwin Procter for a morning forum in Boston called “Alternative Funding for Life Sciences Companies: An In-Depth Look At Public Company Follow-Ons, Converts and PIPEs and Non-Traditional Capital Sources for Private Companies.” The keynote speaker will be former Massachusetts House Speaker Thomas Finneran, who currently serves as president of the Mass Biotech Council. Other speakers include James Frates of Alkermes, Andrew Salzman of Inotek Pharmaceuticals, Jessica Cutler of Morgan Stanley and Mitchell Bloom of Goodwin Procter. It will be held on Thursday, May 19 from 8:30-11am at the Westin Copley Place.

** Also, I hope to see you at the 2^nd Annual MIT Sloan Private Equity Symposium in Friday, April 15. Keynotes will be provided by Dick Boyce of Texas Pacific Group and Phil Cooper of Nantucket Partners (formerly of Goldman Sachs). Finally, I’ll be one of 14 judges at the Venture Capital Investment Competition being held April 8-9 at the university of North Carolina at Chapel Hill’s Kenan-Flagler Business School. More information can be found here.

The Carlyle Group has closed its fourth domestic buyout fund — Carlyle Partners Fund IV — with $7.85 billion in limited partner commitments. It also closed its second Europe-focused vehicle with approximately $2.2 billion. www.carlylegroup.com

NeuStar Inc., a Sterling, Va.-based provider of clearinghouse services to the North American telecom market, has filed to raise $690 million via an IPO of common stock on the Nasdaq, under proposed ticker symbol NSTR. NeuStar was founded in 1996 as an operating division of Lockheed Martin Corp., and was acquired in 1999 in a management buyout lead sponsored by Warburg Pincus. Warburg holds a 71.59% pre-IPO stake, while other significant shareholders include MidOcean Partners (13.95%) and ABS Capital Partners (5.93%). www.neustar.biz

EVDB Inc., a La Jolla, Calif.-based developer of an event and venue information database, has raised $2.1 million in Series A funding. Draper Fisher Jurvetson led the deal, and was joined by the Omidyar Network. The company’s seed funding round had included Esther Dyson of CNET Networks, Half.com founder Joshua Kopelman; Pyra and Odeo co-founder Evan Williams, Tribe Networks CEO and co-founder Mark Pincus, Dan O’Neill, EVP and CTO of Trusonic, Inc. and Thomas Sammon, co-founder of PersonaLogic. www.evdb.com

NewScale Inc., a Foster City, Calif.-based provider of service delivery management software, has raised $15 million in Series C funding. Chess Ventures, Parker Price and Montagu Newhall Associates were joined by return backers Crosslink Capital, Menlo Ventures and New Enterprise Associates. www.newscale.com

B-Bridge International Inc., a Sunnyvale, Calif.-based provider of tools and technology to life-science research laboratories, has raised $4.2 million in venture capital funding. Backers include Bio-Sight Capital Co., Hokkaido Venture Capital and the Marubeni Corp. www.b-bridge.com

Camiant Inc., a Marlborough, Mass.-based provider of policy servers for IP-based multimedia services, has raised $8 million in second-round funding. Return backers included Matrix Partners, North Bridge Venture Partners and Pilot House Ventures. www.camaint.com

Siperian Inc., a San Mateo, Calif.-based provider of customer data integration and management solutions, has raised $10 million in Series D funding led by new backer Constellation Ventures. The company has raised over $28 million in total VC funding since its 2000 inception, including a $7 million Series C infusion last year at a post-money valuation of approximately $16.2 million. www.siperian.com

Kiva Systems Inc. (f.k.a. Distrobot Systems), a Burlington, Mass.-based provider of mobile solutions for inventory storage, movement and sorting, has raised $6.5 million in Series B funding from Bain Capital Ventures. www.kivasystems.com

Brix Networks, a Chelmsford, Mass.-based provider of VoIP performance management solutions, has raised $5 million in fifth-round funding. Castile Ventures led the deal, and was joined by return backers Charles River Ventures, ComVentures, Fidelity Ventures, Partech International and Star Ventures. He company has raised nearly $60 million in total VC funding since its1999 inception. www.brixnet.com

SupplyScape Corp., a Cambridge, Mass.-based provider of pharmaceuytical supply chain software, has raised $7 million in Series A funding. Backers include IDG Ventures, North Bridge Venture Partners and Pilot House Ventures. www.supplyscape.com

Evolution Academy, a Salt Lake City-based youth rehabilitation company, has received an undisclosed amount of funding from private equity firm Peterson Partners. www.petersonpartnerslp.com

Invoke Solutions, a Wellesley, Mass.-based provider of real-ime, interactive research technology, has raised $6.5 million in Series AA recap funding from BEV Capital and return backer Bain Capital Ventures. www.invoke.com

Francisco Partners has agreed to acquire the WebTrends web analytics business of NetIQ Corp. (Nasdaq: NETIQ) for approximately $94 million in cash. Greg Drew, currently the general manager of Webtrends, will continue to lead the business, and will be named president and CEO once the buyout is completed. www.franciscopartners.com www.webtrends.com

Bunker Hill Capital has sponsored a management buyout of Papa Gino’s Holdings Corp., a Dedham, Mass.-based quick-service restaurant operator doing business under the Papa Gino’s and D’Angelo brands. No financial terms were disclosed. Papa Gino’s had raised VC funding from such firms as BancBoston Ventures and The Hale Group. www.bunkerhillcapital.com www.papaginos.com

One Equity Partners has completed its $405 million acquisition of Progress Rail Services Corp. from Progress Energy Inc. (NYSE: PGN). Progress Rail is an Albertville, Ala.-based supplier of products and services to the railroad industry, and currently employs approximately 3,500 people. www.progressrail.com

Goldman Sachs Capital Partners and EQT AB reportedly have bid approximately $3.81 billion in cash for ISS AS, a publicly-traded, Denmark-based facility services provider.

Cinven reportedly has acquired UK-based metal healthcare facility operator Partnerships in Care Ltd. for GBP 552 million. The seller is General Healthcare Group Ltd., a hospital chain that BC Partners bought from Cinven in 2000. www.cinven.com www.partnershipsincare.co.uk

Advent International and Lehman Brothers reportedly are trying to sell portfolio company Cybercity, a Denmark-based broadband services provider. www.cybercity.dk

Oracle Corp. (Nasdaq: ORCL) has acquired Oblix Inc., a Cupertino, Calif.-based provider of security solutions for heterogeneous computing environments. No financial terms were disclosed, although some press reports put the price tag at approximately $100 million. Oblix has raised nearly $100 million in VC funding since its 1996 inception, from groups like Kleiner Perkins, Focus Ventures, Apax Partners, Cisco Systems, Intel Capital, Lehman Brothers, Novell Technology Capital and Winston Partners. www.oracle.com www.oblix.com

Colubris Networks Inc. of Waltham, Mass. has acquired Kiwi Networks Inc., a Campbell, Calif.-based developer of cellular Wi-Fi technologies and automated RF planning and control products. No financial terms were disclosed. Colubris has raised $36 million in total VC funding from such groups as BDC Venture Capital, GrandBanks Capital, DCM-Doll Capital Management, Prism Venture Partners and Telecom Development Fund. www.colubris.com

MagnaChip Semiconductor of South Korea has agreed to acquire IC Media Corp., a San Jose, Calif.-based fabless semiconductor company focused on CMOS image sensors. No deal terms were disclosed. MagnaChip is controlled by Citicorp Venture Capital and Francisco Partners, while IC Media had raised over $34 million in VC funding, from groups like UMC Capital. www.magnachip.com www.icmedia.xcom

ICICI Venture Funds Management Co., an India-based private equity firm, has agreed to provide up to $56 million to India-based drug company Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) for the development and commercialization of abbreviated new drug applications to be filed over the next two years. The deal includes an initial $22.5 million infusion, with an option to provide another $33.5 million in a second phase. www.drreddys.com

Sterling Partners has closed its Sterling Capital Partners II fund with $500 million in limited partner commitments, according to a regulatory filing. www.sterlingpartners.us

Lovell Minnick Partners has held an $80 million first close on its second fund, which is being marketed with a $200 million target capitalization. www.lovellminnick.com

The Central Minnesota Growth & Transition Fund LLC has been formed to participate in LBOs, recaps and growth capital deals for Central Minnesota companies in the manufacturing, assembly and distribution industries. Backers include the Minnesota Investment Netowkr Corp., Kandiyohi Management (affiliate of Quazar Capital Corp.) and various businesspeople in Willmar, Minn. and surrounding communities. It will be managed by Kandiyohi Management.

Vanessa Castagna is joining Cerberus Capital Management, according to The Financial Times. She once served as the second-in-command at retailer J.C. Penney, but left last November after being passed over for the company’s CEO position. She is expected to serve as chairwoman of department store chain Mervyn’s, which Cerberus and Sun Capital Management acquired last September from Target Corp.

Ammar Hanafi has joined Alloy Ventures as a general partner focused on the IT infrastructure and networking markets. He has spent the past eight years with Cisco Systems, and most recently served as vice president of new business ventures. www.alloyventures.com

Javier Ferran and George Sewell have agreed to join Hicks Muse (Europe) as directors, effective in April. Ferran most recently served as president and CEO of Bacardi Ltd., while Sewell served as president of Quaker European Foods from 1995 until 2004.

ABN AMRO Capital has promoted Paul Southwell to deputy chief executive and Paul Moxon to director. Both men work within the firm’s UK business. www.abnamro.com

Cipio Partners, a private equity secondaries firm, has added Roland Dennert and Fabian Ruechardt as principals, and Gerhard Miller as an associate in the firm’s Munich office. Dennert previously has worked with both 3i Group and Atila Ventures, while Ruechardt had been a partner with Infineon Ventures. www.cipiopartners.com

Adam Kalish has joined Lux Capital as a director. He most recently served as a director with Everest Capital, and previously spent more than three years with Quellos Capital Management. www.luxcapital.com

Monday, March 27

SunGard Shines on Second-Largest LBO

We interrupt your regularly-scheduled Monday Mouth-Off to bring news of the largest leveraged buyout since KKR grabbed cracker and ciggie conglomerate RJR Nabisco in 1988. This deal doesn’t quite match up to that one’s $31.4 billion girth (Michael Lewis, you can put your pen down now), but still ranks number two, with a total transaction value of approximately $11.3 billion.

The to-be-acquired company is SunGard Data Systems Inc. (NYSE: SDS), a Wayne, Pa.-based provider of software to the financial services industry. It had 2004 sales revenue of over $3.5 billion, and one-year sales growth of 20.3 percent. If stockholders approve the deal during a July vote, they each will receive $36 per share, which is a 14.1% premium over last Friday’s closing price of $31.55 per share. It is unclear how much leverage is currently included in the $11.3 billion price, although SunGard did say that the final figure includes $500 million (principal amount) of bonds that will remain outstanding.

Leading the buyout consortium is Silver Lake Partners, which contacted CSFB last fall, after the bank was retained to sell off SunGard’s disaster recovery unit. Other equity participants include Bain Capital, The Blackstone Group, Goldman Sachs Capital Partners, KKR, Providence Equity Partners and Texas Pacific Group (a New York Times report says that Carlyle Group and thomas H. Lee Partners dropped out late last week due to pricing concerns). De*t financing will come from JPMorgan Chase, Citigroup Global Markets, Deutsche Bank Securities, Goldman Sachs and Morgan Stanley.

SunGard held a very brief conference call this morning to discuss the deal, during which it didn’t give specifics on the equity-to-de*t ratio, board representation or a bidding timeline. All of that information, said SunGard CEO Cristobal Conde, will be available in a proxy statement to be filed around ten days from now. One worthwhile nugget, however, was Conde’s belief that the buying consortium wants to keep the company in one piece, instead of selling/spinning off several business units (including the aforementioned disaster recovery unit, which was never sold). No word, however, on any eventual exit plan. I’m sure we’ll have more on this in the days and weeks to come.

**  A ruling in the Testa Hurwitz case is scheduled for this Wednesday afternoon. I’ll be front and center in Boston’s U.S. Bankruptcy Court, and will post the result at www.pewnews.com.

**  Finally, we have a solo leader in our March Madness Contest: Ryan Delaney, an analyst with STAG Capital Partners in Boston. Ryan currently has 88 points, which includes three of the Final Four teams (he missed Michigan State), and a final game of Illinois vs. UNC (with UNC winning). Currently in second place with 84 points is Shea Heath of Advanced Micro Devices. Good luck to all with one more weekend to go.

SunGard Data Systems Inc. (NYSE: SDS) has agreed to be acquired by a consortium of seven private equity firms, in a transaction valued at approximately $11.3 billion. Silver Lake Partners is leading the buyout, with equity help from Bain Capital, The Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co., Providence Equity Partners and Texas Pacific Group. SunGard stockholders will receive $36 per share, while the company’s $500 million worth of existing bonds will remain outstanding. CSFB served as financial advisor to SunGard, while d*ebt financing for the deal will come from JPMorgan Chase, Citigroup Global Markets, Deutsche Bank Securities, Goldman Sachs and Morgan Stanley. The entire deal is expected to close in Q3 2005. www.sungard.com

Adams Laboratories Inc., a Chester, N.J.-based drug company focused on respiratory disorders, has filed to raise $125 million via an IPO. Merrill Lynch is lead managing the offering, while Adams hopes to trade on the Nasdaq under proposed ticker symbol ARXT. Adams has raised over $30 million in VC funding, from groups like EGI, Perseus-Soros BioPharmaceutical Fund, Tullis-Dickerson & Co., Talon Opportunity Fund and Marquette Venture Partners. www.adamslaboratories.com

RoundTable Healthcare Partners, a Lake Forrest, Ill.-based private equity firm focused on the healthcare market, has closed its second fund with $500 million in limited partner commitments. www.roundtablehp.com

ReVera Inc., a Sunnyvale, Calif.-based provider of compositional metrology solutions for semiconductor device manufacturing, has raised $11.2 million in Series B funding. ATA Ventures led the deal, and was joined by return backer Crosslink Capital and company management. www.revera.com

Reflect Systems Inc., a Dallas-based provider of IP-based video communications solutions and digital signage software, has raised $9 million in third-round funding. Green Peak Partners led the deal. www.reflectsystems.com

Hotel Booking Solutions Inc., an Atlanta-based travel industry technology and services company, has raised $5 million in venture funding from Crosslink Capital. www.hotelbookingsolutions.com

ExaGrid Systems, a Westborough, Mass.-based provider of storage and data protection services, has raised $13.5 million in Series B funding from return backers Highland Capital Partners and Sigma Partners. www.exagrid.com

CarbonBased Consulting Inc., a New York-based provider of research and advisory services to the investment management market, has raised $400,000 in its firs-torund of outside funding. The deal was from individuals, including former senior management of Yahoo. www.buysidetech.com

LakePointe Capital Partners, a Minneapolis-based private equity firm, has acquired and recapitalized Three D Industries Inc., a Des Moines, Iowa-based manufacturer of concrete mixers. No financial terms were disclosed. As part of the deal, Three D Industries has been renamed Global Mixers.

Accuride Corp., an Evansville, Ind.-based maker of trailer and heavy-duty truck wheels, has set its proposed IPO terms to 13.9 million common shares being offered at between $17 and $19 per share. Citigroup, Deutsche Bank Securities and UBS Investment Bank are co-managing the offering. Accuride is majority-owned by Kohlberg, Kravis, Roberts & Co., while other significant shareholders include Trimaran Capital Partners, RSTW Partners and Albion Alliance. Accuride recently acquired Chicago-based truck component maker Transportation Technologies Inc., which had been controlled by Trimaran. www.accuridecorp.com

Saba (Nasdaq: SABA) has agreed to acquire Thinq Learning Solutions Inc., a Baltimore-based provider of enterprise learning management solutions. No financial terms were disclosed for the deal, which is expected to close within the next 60 days. Thinq has raised over $67 million in total VC funding since its 1999 inception, from firms like Bessemer Venture Partners, Blue Rock Capital, Charles River Ventures, Chicago Growth Ventures, Jeffries Group, Mellon Ventures, CIBC Wood Gundy Capital, BCI Partners and HLM Venture Partners. www.saba.com www.thinq.com

CTC Communications Group Inc. has agreed to merge with Lightship Telecom, creating a Waltham, Mass.-based local exchange carrier company serving the New England region. No financial terms were disclosed. Lightship had been controlled by JPMorgan Partners and Megunticook Management, while CTC continues to be owned by Columbia Ventures Corp. www.lightship.net www.ctcnet.com

WestCom Corp., a New York-based telecom company owned by One Equity Partners, has agreed to acquire the Trader Voice business of Global Crossing for $25 million in cash. www.westcom.com www.globalcrossing.com

ICICI Venture Funds Management Co., an India-based private equity firm, has agreed to provide up to $56 million to India-based drug company Dr. Reddy’s Laboratories Ltd. (NYSE: RDY) for the development and commercialization of abbreviated new drug applications to be filed over the next two years. The deal includes an initial $22.5 million infusion, with an option to provide another $33.5 million in a second phase. www.drreddys.com

Sterling Partners has closed its Sterling Capital Partners II fund with $500 million in limited partner commitments, according to a regulatory filing. www.sterlingpartners.us

Lovell Minnick Partners has held an $80 million first close on its second fund, which is being marketed with a $200 million target capitalization. www.lovellminnick.com

The Central Minnesota Growth & Transition Fund LLC has been formed to participate in LBOs, recaps and growth capital deals for Central Minnesota companies in the manufacturing, assembly and distribution industries. Backers include the Minnesota Investment Netowkr Corp., Kandiyohi Management (affiliate of Quazar Capital Corp.) and various businesspeople in Willmar, Minn. and surrounding communities. It will be managed by Kandiyohi Management.

Jonathan Seelig has joined Globespan Capital Partners as a managing director. He was a co-founder of Akamai Technologies Inc. (Nasdaq: AKAM), and recently served as an executive-in-residence with Polaris Venture Partners. www.globespancapital.com

Ashish Gupta has joined The Woodside Fund as a venture partner. He began his association with the firm as a Kauffman Fellow in July 2002, and has co-founded both Junglee (acquired by Amazon.com) and Tavant Technologies. www.woodsidefund.com

Frank Fanzilli, former CIO for Credit Suisse First Boston, has joined the board of The Open Source Development Labs, a global consortium dedicated to accelerating the adoption of Linux. Fanzilli currently serves as a venture partner with Allegis Capital, and as an advisor to both Focus Ventures and Partech International. www.osdl.org

Thursday, March 24

Random Ramblings

A slow and snowy news day, so just a few quick hits before getting on with the three-day weekend:

** A few of you have written in to ask if Austin Ventures is shutting all public pension systems out of its new fund, or just those based in Texas. The answer is Longhorn Only, as AV will accept fund commitments from public institutions in Washington, Massachusetts, Virginia, Michigan and, most likely, California. Joe Aragona, a general partner with AV since 1982, explains that each of those states has amenable public disclosure policies on the books, which prevent the release of portfolio company-level data. The fund is expected to close next Thursday at $525 million. By the way, pending legislation in Illinois would permit disclosure of top-line data (i.e., fund commitments, IRRs, cash-in/cash-out), but restrict the underlying data that, so far, Texas is refusing to explicitly deem confidential.

** Someone pointed out to me that a number of VC bloggers either are fundraising (Roger McNamee, Bill Burnham), or just closed funds (Fred Wilson). No idea if that is coincidence, or strategy, although my best guess is the former. More importantly, though, I wonder what LPs think of this VC blogger phenomenon. There certainly are some tangible business goals that a blog can help pursue – such as letting serial entrepreneurs know what types of technology you’re interested in – but it also can be a major time drain. If I’m committing capital to a fund, do I want one of its GPs spending an hour, or sometimes more, blogging? Just asking. Also, still looking for a VC blog focused on healthcare.

**  Speaking of blogs, BusinessWeek’s Justin Hibbard writes that broadband phone company Vonage is looking to raise $100 million in new VC funding at a $950 million pre-money valuation. Fascinating to see if anyone bites, particularly with Vonage being sued by Texas for neglecting to tell customers that its service does not include access to traditional 911 service (seems a Vonage subscriber was unable to access 911, during a home invasion. Two people were shot multiple times). This isn’t exactly like Hummer Winblad giving Napster money back in 2001, but I’ll be fascinated to see who commits to a company that (A) Is asking for a massive valuation and (B) That is being sued. That isn’t to say, however, that it won’t happen.

Vonage has raised a over $190 million in total VC funding, including a $105 million Series D round last August.

**  No word yet on a Testa Hurwitz ruling. Could come any time (which essentially means today or sometime next week).

**  The PE Week Wire will not be published tomorrow, in observance of Good Friday. We will be back and kicking next Monday. Have a great weekend…

John Miner has left his position as president of Intel Capital, two years after taking over for group founder Les Vadasz. He has been replaced by Intel vice president and treasurer Arvind Sodhani. A press release only says that Miner will “pursue other interests.” www.intel.com

Altiris Inc. (Nasdaq: ATRS) has agreed to acquire Pedestal Software Inc., a Newton, Mass.-based provider of enterprise vulnerability management solutions. The deal is valued at $65 million in cash, and is expected to close by the end of next week. Pedestal has received venture capital funding from Venrock Associates. www.altiris.com www.pedestalsoftware.com

Global Cash Access Holdings Inc., a Las Vegas-based supplier of cash access, transaction processing and CRM services to the gaming industry, has filed to raise $471.5 million via an IPO of common stock on the NYSE under proposed ticker symbol GCA. The company is controlled by Summit Partners and M&C International, with other significant shareholders including Tudor Investment Corp., HarbourVest Partners, General Motors Investment Management and Bank of America. www.globalcashaccess.com

Delivery Agent Inc., a San Francisco-based provider of interactive commerce services to the entertainment industry, has raised $5.5 million in Series A funding from Worldview Technology Partners and Cardinal Venture Capital. www.deliveryagent.com

Pentadyne Power Corp., a Chatsworth, Calif.-based provider of flywheel power systems, has raised $10 million in additional Series C funding, at a post-money valuation of approximately $29 million. The round now stands at $18 million, including an $8 million first tranche last year from Nth Power, DTE Energy Ventures, Accera Venture Partners and Sempra Energy. Rustic Canyon Venture led the follow-on tranche. www.pentadyne.com

MessageCast Inc., a Redwood City, Calif.-based developer of broadcast messaging systems, has raised $1.5 million in Series A-3, according to a regulatory filing. Company backers include Mobius Venture Capital and Rembrandt Venture Partners. www.messagecast.com

Pathway Medical Technologies Inc., a Redmond, Wash.-based medical device company focused on the treatment of arterial diseases, has raised $10.1 million in new VC funding. Participants included Oxford Biosciences, ABN Amro Capital and Giza Venture Capital. www.pathwaymedical.com

Somerfield PLC, a UK-based grocer, has received a GBP 1.1 billion buyout bid that includes Apax Partners and Barclays Capital, according to various press reports. The offer works out to 205 pence per share, which is better than a 190 pence per share bid from Iceland-based Baugur, which Somerfield rejected last month. Nomura might also be backing an alternate offer.

Prince Mineral Company Inc., a portfolio company of Palladium Equity Partners, has acquired American Minerals Inc. No deal terms were disclosed. American Minerals is a King of Prussia, Pa.-based custom processor of ores and minerals. www.americanminerals.net

Dexcom Inc., a San Diego-based developer of implantable glucose sensors for diabetics, has set its proposed IPO terms to 4.7 million common shares being offered at between $12 and $14 per share. The company has raised nearly $75 million in total VC funding since its 1998 inception, including a $22.5 million Series D infusion late last year at a post-money valuation of $107.7 million. Significant shareholders include St. Paul Venture Capital, Canaan Partners, Warburg Pincus, RWI Group and The Kaufman Fund. www.dexcom.com

Novell Inc. (Nasdaq: NOVL) has agreed to acquire Tally Systems Corp., a Lebanon, N.H.-based provider of IT asset management solutions. No terms were disclosed for the transaction, which is expected to close by the middle of next month. Tally Systems has raised over $16 million in VC funding from firms like Commonwealth Capital Ventures and HarbourVest Partners. www.novell.com www.tallysystems.com

BMC Software Inc. (NYSE: BMC) has acquired OpenNetwork, a Clearwater, Fla.-based provider of Web access management and Web single sign-on solutions, for approximately $18 million in cash. OpenNetwork had raised over $25 million in VC funding from groups like GE Equity, Battery Ventures, JPMorgan Partners, MedEquity Investors and SI Ventures. www.bmc.com www.opennetwork.com

Transmode Systems AB and Lumetis AB, both Sweden-based optical networking companies, have agreed to merge. No financial terms were disclosed. The two companies have raised a combined $81 million in VC funding, with Transmode most recently securing $15 million last December, and Lumentis raising $9 million last June. Combined company backers include Amadeus Capital Partners, POD Holding, HarbourVest Partners, European Equity Partners, Chandaria and Santec. www.transmode.com www.lumentis.com

Pathmark Stores Inc. (Nasdaq: PTMK) has agreed to receive a $150 million PIPE infusion from The Yucaipa Cos. Under terms of the deal, Yucaipa will buy 20 million newly-issued Pathmark shares, 10.06 million Series A warrants (3-year, $8.50 per share) and over 15.04 million Series B warrants (10-year, $15 per share). The package represents 40% of Pathmark’s outstanding common stock. www.pathmark.com

Quantum Energy Partners has committed $50 million to form Rockford Energy Partners II LLC, which will acquire, exploit and produce oil and natural gas properties, with a particular focus in Oklahoma and the Texas Panhandle. The effort will be led by Chuck Perrin, who oversaw existing Quantum portfolio company Rockford Energy Partners I. www.quantumep.com

Wednesday, March 26

Disclosure, Disclosure, Disclosure

I spent most of yesterday on the phone with various Texans, discussing the pending state legislation that would set parameters for disclosure of public pension fund investment information. As a quick refresher, the current bill would require that 13 different types of information be disclosed, with the legitimacy of any other Open Records requests to, presumably, be determined by Texas AG Greg Abbott. VCs, of course, are not terribly comfortable with such language, as Abbott has hemmed and hawed on the issue, and his office told me that he supports the disclosure of portfolio company information, including valuations and revenue.

Austin Ventures has even gone so far as to reject state pensions from its new fund, and UTIMCO chief Bob Boldt told a legislative committee that his group has been shut out from follow-on commitments to funds from Prospect Venture Partners, Foundation Capital, Barclays Private Equity and American Securities (not American Capital Strategies, as I erroneously reported yesterday). For a fuller picture, UTIMCO has been able to make three fund commitments so far in 2005, with Pomona Capital, Prism Ventures and OCM/GFI Power Opportunities Fund II. Q4 2004 commitments went to Union Square Ventures, Carlyle Group and Doughty Hanson & Co.

Anyway, the big question here is whether or not the bill will be modified so that certain information is explicitly excluded from Texas’ Open Records law (Before continuing, it is worth noting that the Texas statute basically says that everything is subject to disclosure, unless otherwise specified in law. This is different than many other state statutes, which assume confidentiality unless otherwise specified by law).

To get some answers, I spoke to Rep. Dan Gattis, who is sponsoring the House version of disclosure legislation. Talkative guy, who clearly has a firm grasp of the relevant issues in play. Gattis said that the current legislation likely will be modified in the next two weeks, but that he could not yet provide any specific language. He also said that he believes that private equity investments are vital to the future success of state pension fund programs, and that a delicate balance must be struck so that top-tier firms continue to accept Texas’ money. When asked if he feels that, in general, portfolio company valuations and revenue should be kept confidential, he responded affirmatively

The problem, however, is that he believes that any sort of blanket confidentiality could become problematic if an unanticipated type of Open Records request is made (i.e., perhaps for a new type of information not considered by the legislators or VCs). As such, his leaning was that the final bill should include some sort of provision that would prevent disclosure in cases where such an action was harmful to the fund, violated trade secret, etc. That decision, of course, would be made on a case-by-case basis by AG Abbott. In other words, it’s kind of the status quo, except that Abbott won’t have to deal with requests related to the aforementioned 13 items.

I asked Gattis if this would appease VCs, since Abbott has been a vocal proponent of full-fledged disclosure (top-line and bottom-line). His response was that while he didn’t want to speak for the AG, he believes that Abbott understands the perils of bottom-line disclosure and still has an open mind toward the matter. He added that VCs might be assuaged if Abbott made a few public comments against bottom-line disclosure, in concert with the legislative vote. Moreover, a few other folks I spoke with believe Gattis was being intentionally conservative in his conversation with me, and that the final bill likely will contain at least some specific exclusion language. Again, we’ll keep watching the developments.

All of these complexities, of course, are lost on the Austin-American Statesman, which this morning has another editorial (free sub required) urging Gattis and company to “fiercely resist efforts by Austin Ventures and other private equity firms to force state investment funds to abandon transparency and embrace secrecy.” The piece implies that AV and others are arguing for complete confidentiality, which isn’t even close to accurate. PE and VC firms are generally OK with disclosure of where the state’s money is going (i.e. which fund), how much the commitment is for, the call-down/disbursement data, internal rates of return and, in most cases, management fee data. It simply doesn’t want portfolio company disclosed (which never is mentioned in the Statesman piece). The Statesman also revives an old canard about CalPERS and cronyism, which has previously been debunked in this space.

For full disclosure (not legally mandated), I called Dave Lowery of the Statesman to discuss this morning’s editorial. He refused to comment, saying that he hadn’t liked the tone of what I wrote after a previous discussion. Then he hung up.

Credit Suisse First Boston has confirmed market rumor – and some reports – that its previously-announced spinout of DLJ Merchant Banking will not occur. Instead, the group will raise a new fund (said to be $1 billion or higher), while current managing partner Tom Dean will leave to form a new firm named Avista Capital. Approximately 30 professionals are staying with DLJ MB, which will be run by Steven Rattner. www.csfb.com

TelASIC Communications Inc., an El Segundo, Calif.-based fables semiconductor company, has raised $26 million in Series D funding. ComVentures led the deal, and was joined by fellow return backers Mission Ventures, The IPO Group, Agilent Technologies and Redpoint Ventures. www.telasic.com

Craig White has left Pacific Corporate Group, just three months after joining from the private markets group of Callan Associates. www.pcgfunds.com

E Ink Corp., a Cambridge, Mass.-based provider of electronic paper display technologies, has received an undisclosed amount of venture funding from Intel Capital. The company previously had raised nearly $100 million in total funding since its 1997 inception. www.eink.com

Encentuate Inc., a Foster City, Calif.-based provider of enterprise access security solutions, has raised $16 million in Series B funding. August Capital led the deal, and was joined by VSP Capital. Return backers Gabriel Venture Partners and Peng Ong (company founder and CEO) also participated. www.encentuate.com

Integrated Healthcare Systems Inc., a Kent, Wash.-based pharmacy technology company, has received $9 million in its first round of outside funding. AIG Horizon Partners Fund and another AIG-related fund participated on the deal. Cascadia Capital advised HIS on the deal. www.ihsystems.net

Provigent Inc., a Los Altos, Calif.-based provider of system-on-a-chip solutions for broadband wireless transmissions, has raised $2 million in additional third-round funding. This brings the round total to $10 million, and the company’s total VC take to $21 million. Backers include Sequoia Capital, Pitango Venture Capital, Magnum Communications Fund, Ascend Technology Ventures, Delta Ventures and Qualcomm co-founder Andrew Viterbi. www.provigent.com

Dubai International Capital has agreed to acquire UK-based wax museum operator The Tussauds Group Ltd. for approximately GBP 800 million. The selling party is Charterhouse Group, which in late 2003 rejected a GBP 750 million bid from BC Partners and PAI Partners. At the time, Charterhouse was looking for upwards of GBP 900 million.

Texas Pacific Group, General Atlantic and Newbridge Capital reportedly are planning to offer $350 million for a stake in Lenovo Group Ltd., the China-based computer maker that recently acquired IBM’s personal computer business for $1.25 billion, according to The Wall Street Journal.

General Motors Corp. (NYSE: GM) may sell up to a 50% stake in its GMAC commercial mortgage subsidiary for around $1 billion, according to The Wall Street Journal. Several private equity firms reportedly have expressed interest. www.gmac.com

Granville Baird Capital Partners and 3i Group have received European Commission approval for their proposed buyout of Berkenhoff GmbH, a subsidiary of ThuyssenKrupp Steel AG that manufactures nonferrous metal wire. www.thyssenkrupp.com

Industri Kaptial has agreed to sell Laho Equipment to Barclays Private Equity for GBP 110 million. Laho is a France-based construction equipment rental group that IK acquired in June 2000. www.laho.com

Citigroup Venture Capital is shopping portfolio company Euramax International Inc. for approximately $1 billion, according to The Deal. Euramax is a Norcross, Ga.-based maker of aluminum products, and reportedly has received interest from Apollo Advisors, Bain Capital, Caxton-Iseman Capital, Goldman Sachs and Warburg Pincus. CSFB is running the auction. www.euramax.com

GMT Communications Partners has acquired three companies that will help it grow the business of portfolio company Docu Group AG, a Switzerland-based provider of B2B publishing services. The acquisitions are: DBI, a publisher of news information for the German construction market; Pisa, also a news provider to the German construction market; and a 51% interest in InfoBau, which publishes information for the civil engineering sector. www.gmtpartners.com www.docugroup.info

Close Brothers Private Equity has agreed to sell its 35% position in Network Disaster Recovery Ltd. (NDR) to Phoenix IT Group PLC for GBP 37.2 million, including around GBP 8.4 million of debt. Close Brothers acquired its NDR stake in December 2000 from 3i Group for GBP 25 million. NDR is a UK-based provider of business continuity and disaster recovery services. www.ndr.co.uk

Wind Point Partners has acquired Waterbury Companies Inc., a Waterbury, Conn.-based maker of hygiene and pest control products. The seller was Mezzanine Management, which sponsored a management buyout of Waterbury in August 1998 from Carpenter Technology Corp. No financial terms were disclosed. www.watco.com

WHI Capital Partners of Chicago has led the buyout of AddisonMckee, a manufacturer of metal tube bending machines, end forming machines and precision tooling. Mercantile Capital Partners provided a minority co-investment, while LaSalle Business Credit provided a senior credit facility and Albion Investors provided mezzanine financing. www.addisonmckee.com www.whicapital.com

Nexsan Technologies, a Woodlands Hills, Calif.-based provider of ATA/SATA-based storage systems, has agreed to acquire AESign Evertrust, a lifecycle management software provider. No deal terms were disclosed. Nexsan has raised VC funding from firms like RRE Ventures, VantagePoint Venture Partners and Beechtree Capital. www.nexsan.com www.evertrust.net

Matrix Telecom, a portfolio company of Platinum Equity, has agreed to acquire Global Crossing Ltd.‘s (Nasdaq: GLBC) small business group, which provides switched and dedicated voice services and data applications to an estimated 30,000 small- to medium-sized businesses. The deal is valued at approximately $40.5 million in cash. In related news, Global Crossing and Matrix Telecom have entered into a long-term carrier services agreement, under which Global Crossing will provide Matrix wholesale voice, data and IP services. Proceeds from the carrier services agreement are not included in the aforementioned $40.5 million sale price. www.platinumequity.com www.globalcrossing.com

Biovitrum AB, a Stockholm-based drug company discovery and development company, has agreed to acquire Cambridge Biotechnology Ltd., a UK-based drug discovery company focused on obesity, pain and inflammation. No financial terms were disclosed. Biovitrum’s principal shareholders are MPM Capital and Nordic Capital (22% each), while Pfizer owns a 19% stake. Cambridge Biotechnology has raised VC funding from Merlin Biosciences, NW Brown Capital Partners, Northern Venture Managers, Johnson & Johnson Development Corp., HarbourVest Partners and Avlar BioVentures Ltd. www.biovitrum.com www.camb-biotech.com

Ikano Communications Inc., a Salt Lake City-based portfolio company of Insight Venture Partners, has acquired the subscriber base and certain related assets of Amerion LLC, a Pasco, Wash.-based ISP for customers in the western U.S. No financial terms were disclosed. www.ikano.com www.amerion.com

W.P. Carey & Co. announced that company president Gordon DuGan has been elected CEO. He originally joined the firm in May 1988 as assistant to the chairman, and later was senior vice president in the firm’s acquisitions department. He later left W.P. Carey to take a CFO job in Colorado, but rejoined in 1997. www.wpcarey.com

Marc Raciot, former governor of Montana, has joined the board of Allied Capital (NYSE: ALD). He currently is a partner with law firm Bracewell & Patterson, and served as chairman of President George W. Bush’s re-election campaign. www.alliedcapital.com

Jeb Miller has joined ComVentures as a partner. He previously was with Worldview Technology Partners, which late last year promoted him to the position of principal. www.comventures.com

Annette Grimaldi has joined Jeffries & Co. as a managing director and head of the firm’s I-banking efforts in the life sciences sector. She previously was with SG Cowen, where she led the firm’s I-banking activities in the biotech and emerging pharmaceuticals markets. www.jefco.com

David Halbert, founder and CEO of AdvancePCS (Nasdaq: ADVP), has launched a private equity partnership named Caris Ltd. The Irving, Texas-based group currently has $350 million under management, and will make strategic investments of between $10 million and $100 million in both private and public service industry-oriented companies (i.e., healthcare, energy, financial services). Halbert will serve as a managing director, alongside former AdvancePCS executives Laurie Johansen and Leslie Simmons Brille. www.caristd.com

MFC Capital Funding Inc. has launched as a new leveraged lending firm focused on the lower, middle markets. The Chicago-based shop is being done in partnership with Minneapolis-based Marquette Financial Cos., and is being headed up by Joseph Gaffigan and Christopher Randall, both of whom previously served as senior executives of Fifth Third Bank. Edward Ryczek, a former director of One Mezzanine Capital Corp., also has joined MFC Capital Funding as a managing director. www.mfccapitalfunding.com

Multiple Capital has been formed by Coller Capital, to handle the recently-acquired venture capital portfolio of Societe Innovatech du Grand Montreal. It will be run by former Innovatech CEO Hubert Manseau, along with former Innovatech vice presidents Michel Lagueux and Andre Vaillant. www.multiplecapital.com www.collercapital.com

The Illinois Technology Development Fund has committed a total of $7.5 million to three venture capital firms: MK Capital and Beecken Petty O’Keefe & Co. each received $3 million, while Illinois Ventures received $1.5 million. The ITDF is a new effort funded by the Illinois State Treasury, and is expected to disburse up to $18 million by year end.

Tuesday, March 26

Testa and Texas…

Lots going on this morning, so here goes:

** I expected two things during yesterday’s U.S. Bankruptcy Court hearing on an involuntary bankruptcy petition filed by eight former partners of defunct law firm Testa, Hurwitz & Thibeault. First, I expected it only would take about 45 minutes. Second, I expected a ruling that either would, or wouldn’t, plunge THT into Chapter 11 bankruptcy protection. If this were baseball, I’d be Michael Jordan.

The case dragged on for over six hours, including one leg-numbing break so that Judge Joan Feeney could hear an alternate case (she said both sides needed to cool off). On the other hand, it did give me a chance to have the following exchange with George Thibeault, who is notoriously inaccessible to the media: Dan: “I know you don’t like talking to folks like me, but I just wanted to introduce myself.” Thibeault: “Good to meet you.” Then he walked away. We later exchanged a brief comment about how the Judge would probably call a lunch break before resuming (she didn’t). That’s right, it was simply an exhilarating day.

As for the substance, each side argued what you would have expected them to argue. THT said that it had enough money to pay off all its creditors, and that it then expected to have a $7.1 million surplus to pay off a certain percentage of $29 million of capital account monies owned to former partners (both those who left before, and because of, the dissolution). It also suggested that the “alleged creditors” (a.k.a. the THT Eight) should have taken the matter to arbitration, per their original partnership agreements, and that the installment of a bankruptcy trustee would only further delay payments to credits. Finally, it offered to put the $1.9 million owed to the THT Eight aside in an escrow account, until an arbiter makes his final ruling on whether or not the THT Eight have priority over other partners. Oh, and a lawyer for THT’s landlord said that a bankruptcy would certainly cause the landlord to ask for 100% of what it was owned, rather than the lower percentage it already had accepted as part of a settlement.

An attorney for the THT Eight argued that various exit agreements had removed his clients from the partnership, and therefore that they should be considered creditors (he also said it converted their equity stakes into debt). Moreover, he disputed the idea that Thibeault & Co. would run the liquidation better than would a bankruptcy trustee, and suggested that the lack of such a trustee could lead to dozens of lawsuits in state and district courts (other former partners, former employees, THT against delinquent clients, etc.).

There obviously was more to both sides (again, more than six hours), but I think that’s a good summary. For a quick bit of analysis, four quick thoughts: (1) Judge Feeney seemed to have absolutely no idea how a business law firm partnership worked, even though she used to be a partner with Hanify & King (which happens to be representing THT in this case). I understand asking questions to get things on the record, but regular repetition of questions was frustrating. There was a blackboard in the courtroom, and I wish one side had used it to create a flow chart of sorts. (2) Some bizarre cross-examination of Thibeault, who originally said that every THT employee laid off last week had received a final check, including unpaid and accrued vacation time. Petitioner counsel asked if he could personally verify that every individual had received their check, and Thibeault replied that of course he couldn’t, but that they relied on payroll processing software that showed an appropriate debit. This apparently was supposed to mean that Thibeault was not telling the truth in his original testimony, which was ridiculous.

(3) Each side in this case came to court partially unprepared. First, neither had copies of all eight exit agreements (one was actually oral, which is bizarre practice for a law firm). Instead, they only had one or two samples. Judge Feeney said she would not rule without them all. Ditto for amended partnership agreements, of which the lawyers only had one. Finally, THT did not have a complete – or even partial — list of all its creditors. Instead, it just threw out estimates without anything backing them up (save for the landlord). Judge Feeney didn’t care about that last one, but it seemed odd to me. (4) A final ruling is expected for Friday. Burden of proof here is certainly on the petitioner, although both sides made compelling cases (legally, not morally, as the petitioners continue to exercise little more than greed). I’ll let you know when I know.

** Austin Ventures has announced that it will not accept Texas pension system capital (i.e., from UTIMCO, TRS, Houston Firefighters, etc.) in its next fund, which is scheduled to close on March 31 with $525 million. Why? Because of public disclosure concerns.

You might remember that Texas originally insisted on disclosure of top-line data when John Conryn was its Attorney General (he’s now a U.S. Senator), but that it drew a bright line at underlying asset info. Greg Abbott continued this policy when he took over as AG, but then reversed course, suggesting that everything from portfolio company valuations to revenue streams should be publicly disclosed, if the relevant VC or private equity firm took capital from public institutions based in Texas. He then seemed to reverse course again last December, when he said he’d sponsor a bill specifically related to disclosure issues. Most folks -myself included – assumed that the bill would include that original bright line, as has similar legislation in Colorado and pending legislation in California.

But it doesn’t. You can find the specific language here, and pay specific attention to the “C” clause. The bill first discussing all the things that can be legally disclosed without asking for an AG’s ruling (mostly top-line, plus some management fee info). But this does not mean that underlying info is deemed confidential. Instead, Clause C states that “The list. does not affect the confidentiality of any type of investment information not listed therein.” In other words, we’re back to square one (of perhaps square two), with AG Abbott deciding on all FOIA requests for underlying asset info. Since he is still on-the-record as supporting full disclosure, only the most desperate GPs right now would accept UTIMCO as a limited partner. Among those already to have said “no thanks” are Foundation Capital, American Capital Strategies and Barclays Private Equity. More on this tomorrow, which hopefully will include explanatory statements from the bill’s sponsor and AG Abbott.

Elevation Partners may have been bested in its efforts to acquire UK-based Eidos PLC, a publicly-trade video game maker known for its “Tomb Raider” series. The Menlo Park, Calif.-based buyout firm yesterday reached an agreement to buy the company for 50 pence per share (approx. $135 million), but rival game-maker SCi Entertainment Group PLC now has offered 53.6 pence per share. www.eidos.com www.elevation.com

British Vita PLC, a publicly-traded furniture foam manufacturer, reportedly has accepted a GBP 668 million ($1.27 billion) buyout offer from Texas Pacific Group. The UK-based company had rejected three earlier bids from Texas Pacific. www.britishvita.com

Nominum Inc., a Redwood City, Calif.-based provider of IP address management solutions, has raised $16 million in new venture capital funding. Advanced Technology Ventures led the deal, and was joined by return backers Bessemer Venture Partners, Morthenthaler Ventures, Globespan Capital Partners, Presidio Venture Partners and Silicon Valley Bank. Nominium has raised approximately $45 million in total VC funding since its 2000 inception, including a $10 million Series C deal in early 2003 at a post-money valuation of approximately $32 million. www.nominum.com

NanoOpto Corp., a Somerset, N.J.-based developer of nano-fabrication technologies for optical component manufacturing, has raised $12 million in Series C funding. First Analysis led the deal, and was joined by return backers Morgenthaler Ventures, DFJ Gotham Ventures, DFJ New England Ventures, Harris & Harris Group and U.S. Trust. The company has raised $42.3 million in total VC funding since its 2000 inception. www.nanoopto.com

4Info Inc., a San Mateo, Calif.-based provider of mobile search solutions, has raised $8 million. U.S. Venture Partners led the deal, and was joined by Draper Fisher Jurvetson. www.4info.net

Newport Media Inc., an Irvine, Calif.-based developer of systems solutions for audio and video broadcasting, has raised $11 million in Series A funding, according to a regulatory filing. Backers include Global Catalyst Partners, Benchmark Capital and Venrock Associates.

Octagon Research Solutions Inc., a Wayne, Pa.-based provider of R&D process management solutions for the pharmaceutical industry, has raised $3 million in second-round funding from return backers Edison Venture Fund and Milestone Venture Partners. www.octagonresearch.com

Teneros Inc., a Mountain View, Calif.-based maker of an application continuity appliance, has raised $17.5 million in second-round funding. Star Ventures led the deal, and was joined by return backers New Enterprise Associates and Sevin Rosen Funds. The company had raised $7 million in Series A funding last July. www.teneros.com

TopoTarget AS, a Danish drug company focused on oncology, has raised 15 million euros in Series C funding. Deutsche Venture Capital was joined on the deal by return backers BankInvest and HealthCap. www.topotarget.com

UDEX Ltd., a Redwood City, Calif.-based provider of product data quality management software and services, has raised $5 million in new VC funding. 3i Group led the deal, and was joined by return backers Montagu Private Equity and Northbridge Ventures. Most of the capital will be used for U.S. expansion. www.udex.com

Summit Partners has acquired a majority stake in Actix Ltd., a UK-based provider of wireless performance engineering solutions, for GBP 40.6 million (approx. $76.1 million). Company management will retain a “sizable” minority position. www.actix.com www.summitpartners.com

FDN Communications Inc. and H.I.G. Capital have teamed up to acquire Supra Telecom, a Miramar, Fla.-based telephone company serving over 250,000 residential customers in Southern Florida. As part of the deal, Supra will emerge from Chapter 11 bankruptcy protection. No financial terms were disclosed. www.supratelecom.com

Smiths Medical, a division of Smiths Group PLC, has completed its acquisition of medical device company Medex Inc. from One Equity Partners. The deal is valued at $925 million, including $625 million in cash and $300 million in assumed debt. Carlsbad, Calif.-based Medex remains in registration for a $345 million IPO, although that presumably will be withdrawn. www.medex.com www.smiths-group.com

Goldman Sachs has agreed to acquire Zilkha Renewable Energy, a Houston, Texas-based wind energy development company. No financial terms were disclosed for the deal, which is expected to close sometime next quarter. The sellers were Selim and Michael Zilkha. www.zilkha.com www.goldmansachs.com

VF Corp. (NYSE: VFC) has agreed to acquire Reef Holdings Corp. from a shareholder group led by Swander Pace Capital. No financial terms were disclosed. Reef is a San Diego-based maker of surf-inspired footwear and apparel, and was acquired by Swander Pace in 2002. www.reefbrazil.com www.vfc.com

Steve Sommer has joined Advanced Technology Ventures as an entrepreneur-in-residence focused on the software and IT infrastructure industries. He most recently served as president and CEO of Airprism Inc., which was acquired last October by WaveLink Corp. www.atvcapital.com

David Halbert, founder and CEO of AdvancePCS (Nasdaq: ADVP), has launched a private equity partnership named Caris Ltd. The Irving, Texas-based group currently has $350 million under management, and will make strategic investments of between $10 million and $100 million in both private and public service industry-oriented companies (i.e., healthcare, energy, financial services). Halbert will serve as a managing director, alongside former AdvancePCS executives Laurie Johansen and Leslie Simmons Brille. www.caristd.com

MFC Capital Funding Inc. has launched as a new leveraged lending firm focused on the lower, middle markets. The Chicago-based shop is being done in partnership with Minneapolis-based Marquette Financial Cos., and is being headed up by Joseph Gaffigan and Christopher Randall, both of whom previously served as senior executives of Fifth Third Bank. Edward Ryczek, a former director of One Mezzanine Capital Corp., also has joined MFC Capital Funding as a managing director. www.mfccapitalfunding.com

Multiple Capital has been formed by Coller Capital, to handle the recently-acquired venture capital portfolio of Societe Innovatech du Grand Montreal. It will be run by former Innovatech CEO Hubert Manseau, along with former Innovatech vice presidents Michel Lagueux and Andre Vaillant. www.multiplecapital.com www.collercapital.com

The Illinois Technology Development Fund has committed a total of $7.5 million to three venture capital firms: MK Capital and Beecken Petty O’Keefe & Co. each received $3 million, while Illinois Ventures received $1.5 million. The ITDF is a new effort funded by the Illinois State Treasury, and is expected to disburse up to $18 million by year end.

Monday, March 25

No time to chat this morning, as the involuntary bankruptcy petition against Testa Hurwitz is being heard at 10am. For those of you who are interested, I’ll post an update at www.PrivateEquityWeek early this afternoon, or you can just wait for tomorrow’s Wire.

In the meantime, we have a trio of co-leaders in the March Madness contest (each has 48 games picked correctly). They are: Hunter McCrossin of Duke Management Co.; Ryan Delaney, an analyst with Stag Capital Partners; and whoever is behind a team named the Berkley Bombers (don’t seem to have received an email from them).

Silver Lake Partners is leading a buyout consortium that could acquire Sunguard Data Systems Inc. (NYSE: SDS) for upwards of $10 billion, according to the NY Post. The group also includes Texas Pacific Group and Thomas H. Lee Partners. The report suggests that the equity tranche could be between $3 billion and $4 billion, which likely would require the existing consortium to find a few more buyers.

Dilithium Networks, a Petaluma, Calif.-based provider of wireless multimedia solutions, has raised $18 million in Series C funding. U.S. Venture Partners led the deal, and was joined by Infocomm Investments Pte Ltd. (subsidiary of Singapore’s Infocom Development Authority), and return backers Motorola Ventures, Jafco, Deutsche Bank Capital Partners and CM Capital. www.dilithiumnetworks.com

Procuri Inc., an Atlanta-based provider of on-demand strategic sourcing solutions, has raised $12.5 million in Series B funding. Return backer Insight Venture Partners led the deal, and was joined by Advent International. In other company news, Procuri announced that it has acquired Contract Management Solutions Inc. of Winter Park, Fla. for an undisclosed amount. www.procuri.com www.cmsi.com

CloakWare Inc., a Vienna, Va.-based provider of anti-piracy solutions, has raised $10 million in Series B funding. Globespan Capital Partners led the round, and was joined by return backers Covington Capital, Intel Capital and TD Capital Technology Ventures. www.cloakware.com

Contact Networks Corp., a Boston-based social networking and enterprise search company founded in 2001, has raised $1.6 million in Series A funding. Participants included founders and management of search technology companies TripAdvisor.com Inc. (acquired by Interactive Corp.) and Direct Hit Technologies Inc. (acquired by AskJeeves). www.contactnetworks.com

Phoseon Technology Inc., a Beaverton, Ore.-based maker of high-powered light sources and light-powered equipment for industrial processes, has raised $6.4 million in Series B funding. Fluke Venture Partners and SmartForest Ventures co-led the deal, and were joined by PacRim Ventures, Capybara Ventures and Japan-based Moritex. The company raised its Series A round in early 2003 from a handful of senior executives in the semiconductor and equipment industries. www.phoseon.com

Pintail Technologies, a Plano, Texas-based provider of semiconductor test improvement solutions, has raised $7 million in Series B funding. Backers include Austin Ventures, Duchossois Technology Partners, IVF Ventures and StarTech Early Ventures. www.pintail.com

Champlain Capital Partners has acquired Bandaco Enterprises Inc., a Totowa, N.J.-based manufacturer and distributor of luggage under licensed labels like Ralph Lauren and Liz Claiborne. The deal included approximately $10 million in equity from Champlain (in exchange for 100% control of the company from individual shareholders), plus an undisclosed amount of senior notes from RoyNat Capital and Gladstone Capital. www.ChamplainCapital.com www.badanco.com

JH Partners has sponsored a recapitalization of AmeriMark Direct LLC, a Cleveland-based direct marketer of women’s apparel, cosmetics, jewelry and health-related products. Memebers of AmeriMark’s senior management also participated, with former controlling shareholder Gary Giesler staying on board as chairman and CEO. No financial terms were disclosed. www.amerimark.com

Hanover Direct Inc. (OTC BB: HNVD) has completed its $8.5 million sale of San Francisco-based retailer Gump’s Corp. to WaldenVC, Stone Canyon Ventures and San Spring Holdings. The deal also includes Gump’s By Mail Inc. www.gumps.com

HIT Entertainment PLC, a publicly-traded UK producer of children’s television programming like Bob the Builder, has received a 476 million takeover bid from Apax Partners. Various press reports suggest that Apax is the only bidder to have emerged, and that the HIT Entertainment board is expected to recommend the offer. www.hitentertainment.biz

HealthPoint Capital Partners has acquired Alphatec Manufacturing Inc., a Carlsbad, Calif.-based maker of spinal fusion products. No deal terms were disclosed. www.alphatecmfg.com www.healthpointcapital.com

HgCapital has retained NM Rothschild to review strategic options – including a possible sale worth around GBP 100 million – of portfolio company Castlebeck Care Ltd., according to The Financial Times. Castlebeck is a UK-based operator of psychiatric hospitals, and was acquired by HGCapital from 3i Group in July 2002 for an undisclosed amount. www.castlebeck-care.co.uk

Unica Corp., a Waltham, Mass.-based provider of enterprise marketing management software, has set its proposed IPO terms to 4.8 million common shares to be offered at between $9.50 and $11.50 per share. The company has raised over $10 million in total VC funding since its 1992 inception, with investors including Summit Partners and JMI Equity. Deutsche Bank Securities is serving as lead underwriter for the IPO. www.unicacorp.com

WebMD Corp. (Nasdaq: HLTH) has acquired HealthShare Technology Inc., an Acton, Mass.-based provider of healthcare decision support and Web-based hospital quality comparison tools. The deal was valued at $31 million in cash, plus the possibility of an additional $5 million if certain 2005 financial milestones are met. HealthShare had received VC funding from Flagship Ventures, Advanced Technology Ventures, Grotech Capital Group and Accel Partners. www.healthshare.com

David Milne has joined SV Life Sciences as a general partner, according to The Boston Globe. He previously served as vice president of corporate business development for Boston Scientific Corp. (NYSE: BSX).

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