PE Week Wire — Friday, April 8

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Winner’s Circle

The sun is shining, the grass is growing, and the Red Sox fans are complaining. In other words, its time for Ryan Delaney feedback. I’ve earned the privilege to write in this space for being the best guesser in the basketball pool. Most would advertise their abilities or their firm. I, however, will not talk about how I am a finance and real estate analyst for STAG Capital Partners. I won’t give into the pleas of my boss to advertise that we provide sale-leaseback proceeds for private and sub-investment grade companies looking to monetize their real estate assets. I won’t give into him by providing the details on several transactions we closed with PE portfolio firms that other sale-leaseback providers found too difficult to close. Nor will I focus on the fact that I live in Boston and seek attractive young ladies to wine and dine (email me at Rather, I’d like to use this space to let Dan know what a great job he is doing and give him the top 10 things I’d like to see him write about this year.

Top 10 Things Ryan would like to see Dan write about in 2005:

10. My trusty new Honda (why I finally stopped tree hugging and went foreign).
9. Bain Capital buys the NHL and names Charlie Hipwood (Ryan’s boss) Commissioner
8.  Dan finally takes the train to NYC and swears to never complain about traveling there again
7.  Olympic standard steroid testing for all VCs (were the late 90’s the steroid era?)
6.  Dan replaces his lawn with Astroturf
5.  All Hedge Funds and PE funds merge into one mega fund…Minimum deal size $500 Billion
4.  PE Week Wire hits 50,000 subscribers.  Thomson Financial throws party for subscribers headlined by Van Halen.
3.  Dan Primack wins Pulitzer Prize for Investigative Journalism – Testa Hurwitz: The Inside Truth

2.   Ryan Delaney promoted to Partner and given one-time bonus on par with Harvard fund managers
1.  STAG Capital closes $1 Billion in real estate acquisitions with majority of deals sourced through Private Equity professionals who read PE Week Wire


Menlo Ventures on Tuesday held a first and final closing on its tenth venture capital fund. The vehicle came in at $1.2 billion, which was 20% higher than its $1 billion target. It is not expected to begin deploying capital until the second half of 2005, due to some remaining dry powder in Menlo Ventures IX.

Ambrx Inc., a San Diego biotech company focused on protein-based drugs, has raised $23.4 million in second-round funding. New backers included Maverick Capital, CMEA Ventures, Twilight Venture Partners and Alexandria Real Estate Equities, while participating insiders included Tavistock Life Sciences, 5AM Ventures, Versant Ventures and Aravis Ventures.

California Governor Arnold Schwarzenegger has backed off his plan to overhaul California’s pension system (at least for now). He originally planned to put the issue on this fall’s ballot, but yesterday said that he would wait until at least July 2006. In a formal statement, CalPERS president Rob Feckner applauded the decision.

Applied Microstructures Inc., a San Jose, Calif.-based provider of solutions that enable the vapor deposition of molecular-level films for nanotech applications, has raised $8.5 million in Series B funding. Sierra Ventures led the deal, and was joined by return backers Compass Technology Partners and Horizon Ventures.

Epocal Inc., an Ottawa, Ontario-based developer of enterprise point-of-care blood diagnostic products, has raised Cdn$5 million in Series B funding led by Genesys Capital Partners. This represents a first close for the Series B round, with a final close scheduled to occur in the next several months.

Sasken Communications Technologies Ltd., an India-based provider of telecom R&D outsourcing solutions, has received $10 million in equity funding from existing strategic partner Nortel Networks Ltd. (NYSE: NT).

Sparus Software, a France-based provider of network infrastructure middleware, has raised 1 million euros in startup funding from AXA Private Equity.

TEMA India Ltd., an India-based manufacturer of shell and tube heat exchangers for the energy market, has received $12 million in private equity funding from Actis.

Boots Group PLC has put its healthcare division on the auction block, in an effort to raise approximately Gbp1.25 billion. GlaxoSmithKline has express interest, as have several private equity firms. In related news, the Wall Street Journal is reporting that firms like Blackstone Group, Texas Pacific Group, CVC Capital Partners and Cinven could try to buy out Boots in its entirety, which could require upwards of Gbp4.6 billion ($8.7 billion).

Adelphia Corp. has tentatively agreed to be acquired for nearly $18 billion by Comcast Corp. and Time Warner Inc., according to multiple reports. The apparent agreement signals a loss for Kohlberg Kravis Roberts & Co. and Providence Equity Partners, which had submitted a rival bid.

CapMan Capital Management has completed its acquisition of mechanical power transmission equipment maker Metso Drives from Finland-based Metso Corp. The deal is valued at approximately 98 million euros.

Terra Firma, a UK-based private equity firm, has agreed to acquire publicly-traded water utility East SurreyHoldings PLC. The deal is valued at Gbp453 million.

Yellow Brick Road, a European directories publisher controlled by 3i Group and VSS Communications Partners, reportedly is receiving $2.6 billion buyout interest from unidentified hedge funds. It already has offers on the table from CVC Capital Partners, Blackstone Group, BC Partners and Macquarie Bank.

Falconhead Capital has sold its position in Maritime Telecommunications Network to Perseus LLC. MTN is a Pembroke Pines, Fla.-based provider of global communications to the maritime industry. No terms of the sale were disclosed, although press reports put the price at $110 million.

China Techfaith Wireless Communication Technology Ltd., a Beijing, China-based handset design house and mobile terminal design group, has filed to raise $150 million via an IPO of American depository shares. It hopes to trade on the Nasdaq under ticker symbol CNTF, and is using Merrill Lynch & Co. as its lead underwriter. The company is controlled by the family trusts of its four senior officers, but also has received VC funding from such firms as Intel Capital and Qualcomm.

Gala, a UK-based bingo game operator, reportedly is looking at banks to underwrite an IPO that would value the company at around Gbp1.75 billion. The company is majority-owned by private equity firms Candover and Cinven.

Siemens Communications Inc., a unit of Siemens AG (NYSE: SI), has acquired Myrio Corp., a Kirkland, Wash.-based provider of middleware and applications for home entertainment solutions. Siemens originally took a minority stake in Myrio via a venture capital deal in late 2003, but terms of the actual acquisition are not being disclosed. Myrio raised over $45 million in total VC funding since its 1998 inception, from groups like Ridgewood Capital Management, Alexander Hutton Venture Partners, NeoCarta Ventures and Siemens Venture Capital.

Wicks Medical Information LLC has agreed to acquire Jobson Publishing LLC, a Bloomfield, N.J.-based specialty healthcare communications, education and publishing company. No financial terms were disclosed. Jobson Publishing currently is owned by Boston Ventures.

The Firm, a Hollywood talent agency backed by Bain Capital and Thomas H. Lee Partners, is in talks to acquire PAX television network operator Paxon Communications for $2.2 billion, according to the New York Post.

Greenfield Online Inc. (Nasdaq: SRVY) has acquired Ciao AG, a Munich, Germany-based provider of online survey solutions in Europe. The deal is valued at $154 million, including approximately $73.92 million in cash, and the remainder in Greenfield Online common stock (at $20.19 per share). Ciao AG had raised VC funding from Wellington Partners, Apax Partners, Index Ventures and Hubert Burda Media.

Sequoia Capital is raising a later-stage venture capital fund, according to PE Insider. This would be the Menlo Park, Calif.-based firm’s third such effort, and is being marketed with a target capitalization of between $475 million and $525 million.

The Private Equity Industry Guidelines Group (PEIGG) has released its U.S. private equity reporting and performance measurement guidelines. They are available at

Vikram Gandhi is joining Credit Suisse First Boston as head of its Global Financial Institutions Group. He most recently served as co-head of the Financial Institutions Group at Morgan Stanley.

Kathryn Munro, a principal with private equity firm BridgeWest LLC, has joined the board of Knight Transportation Inc. (NYSE: KNX).

Jan Cotta has joined Germany-based fund-of-funds manager VCM Venture Capital Management as a managing director and head of institutional marketing and client relationships, according to PrivateEquityOnline.

Correction: Yesterday’s note on Odyssey Inv*stment Partners’ pending acquisition of Neff Corp. (OTC: NFFCA) should have said that the deal values Neff’s equity at $240.5 million, not that Odyssey itself will provide $240.5 million of equity itself (it will provide a portion, while the rest will include other financing).

Updates: is reporting that Jan Gullett has been named to replace Mark Pincus as CEO of Tribe Networks. Also, the entire value of the Spectrum Equity-led leveraged recap of Classic Media is $175 million, including the reported $75 million in equity from Spectrum.


Thursday, April 7

Random Ramblings

A few quick notes before the trusty Pontiac heads down to Providence Airport, where I’ll catch my plane to Raleigh-Durham for the VCIC event:

** Boston-based Summit Partners is in the fund-raising market with two offerings: One focused on late-stage private equity and LBOs, and the other focused on growth-stage venture capital. Limited partners expect the LBO fund to easily hit its $3 billion target, particularly given its predecessor’s recent run of successful IPOs. The VC fund is arguably a bit less certain with its $250 million to $300 million target, particularly since Summit’s original VC fund was still underwater as of the last time CalPERS updated its performance figures (9/30/04). Moreover, the venture group has lost three general partners since being founded, including founder Kip Sheeline (now with Levensohn Venture Partners) and Marc Friend, whose departure was first reported in yesterday’s PE Week Wire.

There are, however, a few things going for the VC fund-raising effort. First, Summit is raising both funds at the same time, which means that it could apply some not-so-subtle pressure to LPs looking for access to the LBO fund (I’m not saying they’re doing that, just that it’s an available – and not unprecedented — option). Second, much of the original VC fund’s troubles came from its 1999 vintage and early-stage focus. The vintage for Summit VC II is obviously changed, but the focus also has moved a bit later, which is a better fit with the firm’s exhaustive deal-sourcing system. Oh, and they also have dropped the original VC fund’s “Accelerator” tag, which made it sound like what Bill Gross might call his NASCAR team, if he were to buy one.

Finally, a few personnel notes on Summit. Marc Friend says he is leaving on good terms, and that he simply wants to do earlier-stage inv*sting than Summit is pursuing (like what he used to do at USVP). His immediate plans are a trip with his wife to China and India, although he likely will join a West Coast firm upon his return. Also, I made a mistake yesterday in saying that Tom Jennings would be moving from Boston to Palo Alto. He will stay put in Beantown, although the part about his impending promotion from VP to principal was accurate (all apologies Tom).

** Sticking on the personnel tip for a moment, a pair of Silicon Valley happenings to share. First, Intel Capital has lost yet another senior executive. This time it’s Claude Leglise, whose last day will be Friday. You might remember that Intel Capital president John Miner announced his resignation on March 24, which really is a lot of senior-level transition for one firm. even one as large as Intel Capital. Go to for the complete story.

** In unrelated personnel news, PE Week has learned that Mark Pincus has stepped down as CEO of online classified company Tribe Networks Inc. This is similar to the transition that occurred at Pincus’ previous company, and basically is a case of Pincus being a better software guy than managerial/marketing guy. He plans to stay at the firm on a fulltime basis, and says that the search for a new CEO began late last year. No word yet on the newbie’s identity, but a formal announcement is expected to come by the end of April.

** I never used to care much for The West Wing, but last night’s episode was the single best hour of dramatic television I’ve seen since the pilot for NYPD Blue. Simply amazing.

** Tomorrow’s PE Week Wire column will be written by Ryan Delaney of Stag Capital, who won our 3rd Annual March Madness contest (this is part of his prize). I’ll still be taking care of the news section from down in North Carolina, however, and the email will originate from the regular domain (i.e., no need to change your settings). Have a great weekend.

Elevation Partners has lost out in its efforts to acquire UK-based Eidos PLC, a publicly-traded video game maker known for its “Tomb Raider” series. The Menlo Park, Calif.-based buyout firm agreed last month to buy Eidos for 50 pence per share (approx. $135 million), but one day later was bested by a 72.8 pence per share offer from rival game-maker SCi Entertainment Group PLC. Eidos has now accepted the SCi Entertainment offer, after Elevation failed to increase its bid.

Claude Leglise, a vice president at Intel Capital, will step down this Friday, in the second major departure from the venture unit in less than a month. Two weeks ago, Intel Capital President John Miner announced that his last day would be June 1.

Spectrum Equity Investors reportedly has sponsored a leveraged recap of Classic Media Inc., a New York-based owner of cartoon and television characters like Mr. Magoo and The Lone Ranger. Spectrum’s participation came in at around $75 million, with existing shareholders like Pegasus Capital Advisors and Random House Ventures retaining a minority position. In related news, Classic Media Inc. is considering a bit for children’s television programmer HIT Entertainment PLC, which would be backed by both Spectrum and Thomas H. Lee Partners. Both Apax Partners and Lions Gate Entertainment already have made bits for HIT.

Picolight Inc., a Boulder, Colo.-based maker of optical transceivers and components, has held a $13 million first close on its latest round of VC funding. The company hopes to raise between $4 million and $7 million in additional capital during the second quarter. It now has raised over $100 million in total private funding since its 1996 inception.

Third Brigade Inc., an Ottawa, Ontario-based provider of deep host intrusion prevention solutions, has raised Cdn$6 million in Series A funding. BCE Capital and Celtic House Venture Partners co-led the deal, and were joined by seed-stage backer BDC Venture Capital.

Diagnostic Ultrasound Corp., a Bothell, Wash.-based medical device company, has closed the first tranche of a $34 million capital commitment from DW Healthcare Partners and Rho Private Equity.

EnOcean GmbH, a Germany-based provider of battery-less switches and sensors, has raised 10 million euros in third-round funding. Backers included 3i Group, BayTech Venture Capital, SAM Private Equity, Wellington Partners and Siemens Venture Capital.

Kohlberg, Kravis, Roberts & Co. has completed its acquisition of Toronto-based building products company Masonite International Corp. (NYSE: MHM), at a price of Cdn$42.25 per share.

Barclays Private Equity and 3i Group have sold their ownership position in INBIS Group PLC to AssystemBrime SA for an undisclosed amount. INBIS Group is a UK-based provider of independent design and engineering support services, which was formed via a 1997 management buyout co-sponsored by Barclays and 3i.

Odyssey Inv*stment Partners has agreed to acquire Neff Corp. (OTC: NFFCA), a Miami, Fla.-based construction and industrial equipment rental company. The deal is valued at $510 million, including $240.5 million in equity. Company management will retain a significant ownership position.

ClearLight Partners has led buyout of Switchcraft Holdings Inc., a Chicago-based maker of electronic connectors and cable assemblies. Company management also participated. No financial terms were disclosed for the deal, which also included senior note financing from Antares Capital and subordinated note funding from Black Canyon Capital.

Perry Capital has agreed to acquire mid-market commercial finance companies Capital Factors Inc. and Capital Tempfunds Inc. from the Union Planters Bank, a division of Regions Financial Corp. (NYSE: RF). No financial terms of the acquisition are being disclosed, although Perry Capital has said that it will inv*st up to $100 million to support its new acquisitions.

CVC Europe says that it has given up its battle to buy publicly-traded Swiss flooring company Forbo International SA.

The Carlyle Group has acquired French semiconductor metrology company Cameca from an inv*stor consortium led by Barclays Private Equity, according to Dow Jones.

Accent Equity Partners has agreed to buy the BakeMark Sweden unit of Dutch food conglomerate CSM NV for approximately 8.75 million euros, according to Dutch press reports.

Freightcar America Inc., a Chicago-based maker of railroad freight cars, closed its first day of trading up 10.68% to $21.03 per share. The company traces its roots back to 1901, and was owned by Bethlehem Steep Corp. from 1923 to 1991. It then was purchased by Johnstown America Industries (now known as TTII), and resold in June 1999 to an investor group that included company management, Trimaran Capital Partners and John Hancock Life Insurance Co.

Progress Software Corp. (Nasdaq: PRGS) has acquired Apama Inc., a Cambridge, UK-based provider of event steam processing technology, with a particular focus on the financial services industry. The deal was valued at $25 million, net of cash acquired. Apama was founded in 1999, and had raised VC funding from The Carlyle Group, Anschutz Inv*stment Co. and Providence Inv*stment Company Ltd.

Esmertec AG, a Switzerland-based provider of software for mobile phones and embedded devices, has taken a majority ownership position in eValley Inc., a Japan-based exponent for Java software development. No financial terms were disclosed for the deal. Esmertec took a minority stake in eValley in July 2002, with an option for controlling interest, which now has been exercised. Esmertec has raised VC funding from Credit Lyonnais Private Equity, Partners Group, Sofinnova Partners, Rothschild Ventures, BV Group Ventures, Earlybird Venture Capital and BV Group Ventures.

Inter-Atlantic Group has launched its second private equity fund focused on the financial services industry. It is targeting $150 million, with Bentley Securities and Trinity Group serving as placement agents.

3i Group is considering a sale of up to 800 “legacy portfolio companies” on the secondary market. The news was reported in this morning’s Times of London, and was confirmed by a 3i spokeswoman. The companies likely would be sold either individually or in small groups, and 3i says that there is no sense of urgency.

AXA Private Equity is planning to launch venture capital-focused offices in both London and Singapore. Ivan Bernard-Brunel, a former principal with Crescendo Ventures, will run the office, assisted by former Credit Lyonnias professional Pierre-Emmanuel Boulic. No information was disclosed about Singapore-based personnel.

Bard Capital Partners has launched as a mid-market buyout firms with offices in New York and Denver. It also announced its first acquisition, by buying the Contractor and Industrial Products Group of International Surface Preparation Corp. The deal was valued at $130 million.

The Ontario Teachers’ Pension Plan has promoted Mark Wiseman to vice president of funds and inv*stments. Since joining OTPP in 2002, he has been responsible for all direct and indirect private equity commitments. In other OTPP news, the group also has promoted Rosemarie McClean to vice president of member services and Ron Lepin to vice president of infrastructure.

Rod Paige, former U.S. Secretary of Education, has joined the advisory board of New York-based private equity firm Leeds Weld & Co.

Brown Gibbons Lang & Co. has promoted four managing directors to the position of partner, and said that co-founders Michael Gibbons and Scott Lang have assumed the titles of chairman and CEO, respectively. The new partners are Scott Berlin, James Miller, Stephen Miles and David Sulaski. In other personnel news, the firm has promoted William Watkins to director, Cameron Miele to vice president, Scott Hasley to director and Michael Shaffer to senior associate.

Marilyn Selby Okoshi has joined law firm Katten Muchin Zavis Rosenman as a partner, where she will focus on the organization and representation of hedge funds and private equity funds. She previously served as a partner with Coudert Brothers LLP.

Wednesday, April 6

Wednesday Warblings?

The sun is shining, oil prices are rising and no number of World Series wins will lessen my distain for Derek Jeter. In other words, it’s time for some Friday Feedback (the premature Wednesday edition). We haven’t done this for a while, so advance apologies for the lack of a coherent theme:

A couple of emails on the new Archon Ventures (or perhaps it’s Spark Capital) fund being raised by Todd Dagres and Santo Politi. First up is Tim: “I think that the focus on the media/entertainment/tech intersection is a very real market opportunity, but am not sure that LPs agree enough to commit to such a niche-focused fund. It’s kind of one of those things that LPs hope their tech VCs pay attention to, but not that they pay all of their attention to.” Deb adds: “Great idea for a fund, but a 25% carry for a first-time team? If they pull that off, then it’s just further proof that LPs will do anything to approach their allocations.

Regular respondent James had a quick note about the pending SunGard buyout, and its potential for drawing old-guard LBO shops like KKR and Blackstone further into the tech market: “If you’re right that the big boys will use SunGard as a way to get their toes wet in technology, then Silver Lake may have made a big mistake [in putting together the consortium]. They’ve basically had the tech buyout market to themselves, with just a couple other firms… But if the Old Guard does well enough on SunGard that they are convinced to do other similar deals, then Silver Lake has basically just raised the price for most of the auctions it gets into.” Interesting point James, and I’ve been told that it was briefly considered by both Silver Lake and Texas Pacific Group, although apparently not too seriously…

Patrick writes in to ask the months-old question about why I’m so interested in the Testa Hurwitz saga. More specifically, he asked me to lose that interest. He writes: “I’ve found the PE Week Wire to be very valuable, but why do you talk so much about Testa? I’m a PE professional and I don’t care about some random law firm regardless of how many PE/VC deals they’ve worked on.” The short answer is that THT was essentially the bedrock of Boston’s VC/PE community, in a way that likely will not, or cannot, be duplicated. Nonetheless, I have promised no more significant discussion of that matter, and intend to keep to my word (the preceding paragraph, not included).

Finally, Robert from New York wrote in this morning to ask how I’m feeling about my beloved Red Sox. The short answer is lousy, but mainly because I’m still aghast at how the team again increased ticket prices without significantly increasing payroll. My uncle yesterday compared Red Sox ticket prices to gas prices, in that there is no significant outcry that they keep rising. The difference, I told him, was that high-priced gas still works the same as low-priced gas. If the Sox perform significantly worse than last year, then people will begin to complain.

National Waterworks Holdings Inc., a Waco, Texas-based provider of water and wastewater transmission products in the U.S., has filed to raise $400 million via an IPO of common stock, which would trade on the NYSE under ticker symbol NWW. National Waterworks is controlled by JPMorgan Partners and Thomas H. Lee Partners, each of which holds a 43.1% pre-IPO ownership position.

FeedBurner, a Chicago-based provider of RSS/Atom post-processing services for online publishers, has raised $7 million in second-round funding. Mobius Venture Capital led the deal, and was joined by Sutter Hill Ventures and return backers Portage Venture Partners and Draper Fisher Jurvetson.

Marc Friend has left the general partnership of Summit Partners, where he worked on the Summit Accelerator venture capital fund, PE Week has learned. In other Summit Accelerator news, the group will make two promotions, effective July 1: Tom Jennings will be promoted from vice president to principal, while Greg Goldfarb will be promoted from senior associate to vice ! president.

Integrian Inc., a Durham, N.C.-based provider of mobile digital video technology for the public safety, transportation and federal government markets, has raised $13 million in Series B funding. Polaris Venture Partners led the deal, and was joined by Dow Chemical and return backers Intersouth Partners, Motorola Ventures and Wakefield Group.

Elixent Ltd., a UK-based reconfigurable semiconductor company, is looking to raise $15 million in third-round funding. So far, it has closed on an undisclosed amount from Panasonic Digital Concepts Center and Toshiba Corp., while return backers 3i Group, GIMV and NIF Ventures also participated.

SkinMedica Inc., a Carlsbad, Calif.-based drug company focused on dermatological conditions, has raised $15 million in Series E funding. EuclidSR Partners led the deal, and was joined by return backers Apax Partners, Domain Associates, HealthCare Ventures, Montreux Equity Partners, Perseus-Soros BioPharmaceutical Fund and Split Rock Partners. The company has raised over $95 million in total VC funding since its 1999 inception, including a split-tranched $56 million Series D round in 2004.

CorNova Inc., a Burlington, Mass.-based coronary stent maker, has raised $3 million in Series A funding from CardioTech International Inc. and Implant Sciences Corp.

Protonex Technology Corp., a Southborough, Mass.-based maker of fuel cell power systems for portable and remote applications, has raised $9 million in second-round funding. Return backers Conduit Ventures, SAS Investors, Solstice Capital and Commons Capital were joined by new participants Parker Hannifin Corp., Contango Capital Management and the Massachusetts Green Energy Fund.

CVC Capital Partners has completed its sale of Dutch specialty chemicals company Verdugt BV to Kemira Oyj for approximately 148 million euros. Company management also sold its ownership position.

KKR and Providence Equity Partners may not be getting help from Cablevision Systems Corp. after all. Reports last week suggested that the two buyout firms had talked with Cablevision about joining their bid for Adelphia Communications Corp., which also is being sought after by frontrunners Time Warner and Comcast. Today, however, new reports suggest that those talks broke down, and that Cablevision will go it alone with a $16.5 billion offer.

Apax Partners has dropped out of an inv*stment consortium trying to buy Enel SpA’s 62.5% stake in Italy-based telecom company Wind SpA. The move could provide a large boost for Blackstone Group, which is leading the competing consortium. Wind’s overall enterprise value is coming in at around 12 billion euros, including 12 billion in assumed debt.

Hispania Capital Partners has acquired a controlling interest in Eastern Research Services Inc., a Springfield, Penn.–based provider of independent market research and telephone data collection services. No financial terms were disclosed.

GAB Robbins, a portfolio company of Brera Capital Partners, has put its non-U.S. operations on the auction block. According to The Times of London, GAB will be looking for up to Gbp100 million.

CryoCor Inc., a San Diego-based maker of a catheter system for cardiac arrhythmias, has filed to raise $46 million via an IPO of common stock, which would trade on the Nasdaq under proposed ticker symbol CRYO. The offering will be led by W.R. Hambrecht, which will use its Open IPO distribution method. The company has raised $46.5 million in total VC funding since being spun out of CryoGen in 2000, including a $27.5 million Series D round in 2003. Significant shareholders include MPM Capital, Healthcare Equity Partners, OrbiMed Advisors and William Blair Capital Partners.

EV3 Inc. of Plymouth, Minn. has filed to raise $230 million via an IPO of common stock, which would trade on the Nasdaq under proposed ticker symbol EVVV. The company was formed in 2000 as an endovascular device acquisition platform by industry veteran Dale Spencer, private equity firm Warburg Pincus and medical device-focused VC firm The Vertical Group. Warburg Pincus currently holds more than a 90% stake in the company.

Freightcar America Inc., a Chicago-based maker of railroad freight cars, has priced 8.5 million common shares at $19 per share, for a total IPO take of approximately $161.5 million. It originally filed to price 16 million shares at between $16 and $18 per share. Freightcar America traces its roots back to 1901, and was owned by Bethlehem Steep Corp. from 1923 to 1991. It then was purchased by Johnstown America Industries (now known as TTII), and resold in June 1999 to an investor group that included company management, Trimaran Capital Partners and John Hancock Life Insurance Co.

Hardide Ltd., a UK-based provider of tungsten carbide coating solutions, has successfully floated its ordinary shares on the AIM market of the London Stock Exchange. It has received VC funding from Seed Capital Ltd.

Rexnord Corp., a portfolio company of The Carlyle Group, has agreed to buy Falk Corp. from Hamilton Sundstrand for $295 million. The deal is expected to close sometime this quarter. Falk Corp. is a Milwaukee-based maker of gears and couplings with annual revenue of approximately $200 million.

Monitor Clipper Partners is sponsoring the merger of Balanced Scorecard Collaborative Inc., Painted Word Inc. and ThinkFast Consulting. The combined company will be known as Palladium Group Inc., and will focus on global business consulting and corporate performance management. No financial terms of the Monitor Clipper participation were disclosed.

Plantronics Inc. (NYSE: PLT) has acquired Octiv Inc., a Berkeley, Calif.-based provider of audio signal processing technology. No financial terms were disclosed. Octiv has raised VC funding from Novus Ventures, 3i group, FG Ventures and Intel Capital.

Evogenix Pty Ltd. of Australia has merged with technology partner Absalus Inc. of Mountain View, Calif. in an all-stock transaction valued at $8 million. The combined company will focus on developing new antibody-based drugs. Evogenix has raised VC funding from firms like Start-up Australia Pty Ltd. and BioFusion Capital Pty Ltd.

Tom Lee yesterday confirmed earlier reports — including one here — that buyout firm Thomas H. Lee Partners will seek $7.5 billion for its next fund.

Jonathan Chait has joined Boston-based private equity firm Pod Holding as a principal. He previously served as a venture advisor to several area startups and VC firms, and before that was a managing director of Garage Technology Ventures.

Peter Levine has resigned from his managing director position at VC firm Mayfield, as first reported by VentureWire.

Stephen Hines has joined Boston-based Lane, Berry & Co. International as managing director of the I-banking services firm’s recently-established New York office. He has previous experience at such places as Goldman Sachs, DLJ, the Beacon Group and J.H. Whitney & Co.

Jon David Friedland has joined Rothschild North America as a managing director focused on the life sciences market. He previously served as a managing director with Rinaldini & Co. LLC.

Tuesday, April 5

Tar Heels Go STAG

Ryan Delaney, an analyst with STAG Capital Partners of Boston, is the winner of our Third Annual March Madness Contest. Ryan has basically been leading since the Sweet Sixteen got halved, and correctly picked three of the four final four teams (not to mention the UNC vs. Illinois final). In return for besting over 340 other PE Week Wire readers, Ryan receives a complimentary one-year subscription to Venture Capital Journal, and the opportunity to “own” this space someday in the very near future (I’m hoping it’s this Friday, since I’ need to be in Chapel Hill for the VCIC competition). Including Ryan, the top five were as follows:

1.      Ryan Delaney, Stag Capital Partners (160 points)

2.      Matthew Coyne, Bank of America (152 points)

3.      Mark Evans, Transitions Capital (147 points)

4.      Team name 50970 (146 points)

5.      Matthew Cook, Yale University (145 points)

Thanks to everyone who participated…

Hellman & Friedman has agreed to acquire Universal Underwriters Group from Zurich Financial Services Group for approximately $1.1 billion. Universal Underwriters is an Overland Park, Kansas–based provider of property and casualty insurance to U.S. franchised automotive dealerships. Joining H&F on the deal are Farallon Capital Management, GIC Special Inv*stments and Universal Underwriter management. The deal is expected to close in Q3 2005.

Eagle Bulk Shipping Inc., a New York-based owner of dry bulk vessels, has filed to raise $250 million via an IPO of common stock on the Nasdaq, under proposed ticker symbol EGLE. UBS and Bear Stearns are co-managing the deal. Eagle Bulk Shipping is controlled by private equity firm Kelso & Co.

Greenhill & Co. (NYSE: GHL) has held a $558 million initial closing on its second private equity fund, named Greenhill Capital Partners II LP. Greenhill & Co. provided $85 million, while fund managers committed an additional $135 million. The overall fund target is $700 million.

Bluestreak Network Inc., a Dallas-based developer of presentation software for digital TV and wireless personal media devices, has raised $6 million in second-round funding. Solidarity Fund QFL and BDC Venture Capital were joined on the deal by return backer First Capital Group.

Applimation Inc., a New York-based provider of application and information lifecycle management solutions, has raised $4 million in Series C funding. Battery Ventures and JMI Equity Fund co-led the deal, and were joined by fellow return backer Waypoint Ventures.

Ventaira Pharmaceuticals (f.k.a. BattellePharma), a Columbus, Ohio-based drug company focused on a next-generation inhalation device, has raised $13.5 million in new venture capital funding. TL Ventures led the deal, and was joined by return backers Battelle Ventures, Safeguard Scientific, PA Early Stage Partners, Fletcher Spaght Ventures, Reservoir Venture Partners and James Richardson & Sons Ltd.

Ipsat Therapies Oy, a Helsinki-based drug company focused on hospital-acquired infections and antibiotic resistance, has raised seven million euros in new venture capital funding. Bio Fund Management Oy led the deal, and was joined by Finnish Industry Investment Ltd, the Varma Mutual Pension Insurance Co. and Sitra. The company has raised more than 19 million euros in total VC funding.

Avinti Inc., an Orem, Utah-based provider of email security solutions, has raised $7.2 million in Series B funding. Sequel Venture Partners led the deal, and was joined by new backer Staley Capital advisors, and existing shareholders vSpring Capital and Wilson Sonsini Inv*stments.

Mirabel Medical Systems Inc., an Austin, Texas-based maker of a breast cancer screening system, has raised $9 million in second-round funding led by Stockton Partners.

Appfluent Technologies Inc., a Bethesda, Md.-based provider of server-based database performance software, has raised $3.1 million in Series A-1 and Series A-2 recap funding, according to a regulatory filing. Backers included Carlyle Venture Partners, DynaFund Ventures, New Markets Growth Fund and Updata Venture Partners.

ReachLocal Inc., an Encino, Calif.-based provider of online advertising solutions for local businesses, has raised $7.75 million in a venture capital funding round led by VantagePoint Venture Partners.

Riverlake Partners has acquired SP Industries Inc., a Warminster, Penn.-based manufacturer of specialty glassware and equipment for the pharmaceutical, biotech, educational, industrial and OEM markets. No deal terms were disclosed, except that the buyout was financed through $10.5 million in senior note ($4m) and mezzanine funding ($6.5m) from MVC Capital (NYSE: MVC).

Valor Equity Partners of Chicago has acquired Rocky Mountain Forest Products Corp., a Laramie, Wyoming-based maker of small-pattern, solid-pine wood moldings. No financial terms were disclosed. Prestwick Partners advised RMFP on the deal.

The Riverside Co. has sponsored a management buyout of Water-Jel Technologies, a Carlstadt, N.J.–based provider of emergency burn care and other first-aid products to the industrial, military and consumer markets. No pricing terms were disclosed for the deal, which includes senior financing from GE Commercial Finance and subordinated notes from New Canaan Funding.

BC Partners is considering a bid for 75 department stores from troubled German retailer KarstadtQuelle AG, according to Reuters. The deal would be valued at more than 400 million euros.

General Motors Corp. (NYSE: GM) has completed the sale of its Electro-Motive Division to an investor consortium led by Greenbriar Equity Group and Berkshire Partners. No financial terms were disclosed. The company will be renamed Electro-Motive Diesel Inc., with John Hamilton being named president and CEO.

Advanced Analogic Technologies Inc., a Sunnyvale, Calif.-based provider of power management semiconductors for mobile consumer electronic devices, has filed to raise $172.5 million via an IPO of common stock on the Nasdaq, under proposed ticker symbol AATI. Morgan Stanley and Merrill Lynch are sharing lead underwriter duties on the offering. Advanced Analogic has raised VC funding from such firms as Battery Ventures, Sunsino Ventures, Maton Fund and Vision 2000 Venture Ltd.

TolerRx Inc., a Cambridge, Mass.-based drug company focused on immune disorders, has acquired certain intellectual property and material assets from Diabetogen Biosciences Inc. Specifically, TolerRx has acquired access to technology under a patent application and a licensing agreement between Diabetogen and The L’Institut National de La Santé et de La Recherche Medicale (INSERM) relating to the therapeutic use of anti-CD3 antibodies in autoimmune diseases. No financial terms were disclosed. TolerRx has raised nearly $90 million in total VC funding from Bear Stearns Health Innoventures, NIF Ventures, HealthCare Ventures, Rho Ventures, Skyline Ventures, Vertex Management, Sprout Group, Lehman Brothers Healthcare Group, Genentech, Duke University, Aozora Investment and Yasuda Enterprise Development Corp. Diabetogen has raised VC funding from BDC Venture Capital, Safeguard Scien! tifics and VentureLink Holdings.

The Active Network Inc., a San Diego-based provider of application and marketing services for community service organizations, has acquired the Public Enterprise Group, a Huntington Beach, Calif.-based developer of municipal marketing partnerships and revenue-generating programs. No financial terms were disclosed. The Active Network has raised over $70 million in VC funding from Austin Ventures, ABS Ventures, Kettle Partners, Ticketmaster, North Bridge Venture Partners, Enterprise Partners Venture Capital, Canaan Partners and Dominion Ventures.

Advent International has raised 330 million euros for its third private equity fund focused on Central Europe. Limited partners included Teachers’ Private Capital, AlpInv*st and the European Bank for Reconstruction and Development.

Catamount Ventures has closed its second fund with $24.3 million in limited partner commitments. The San Francisco-based firm provides seed-stage and early-stage capital to technology companies.

MPM Capital has promoted William Greene to the position of general partner. Greene joined the San Francisco office of MPM Capital in 2002, after having previously served as senior clinical scientist and epidemiologist with Genentech.

Avondale Partners of Nashville, Tenn. has added Michael “Trey” Crabb as a healthcare-focused director of I-banking, and Matt Wiltshire as an I-banking vice president focused on the consumer, restaurant and transportation sectors. Crabb previously served as a vice president with Merrill Lynch & Co., while Wiltshire had been a principal with Compass Advisors.

Michael Levitan has joined Global Markets Capital Group LLC (GMCG) as a New York-based principal focused on the firm’s life sciences advisory and M&A activities. He has previously worked at both Bear Stearns & Co. and Lehman Brothers.

Thomas Widmann and Erich Schlick have joined Wellington Partners as general partners focused on the life sciences sector. Widmann is the founder of Actelion, while Schlick has spent the past four years as director of 3i Group’s German healthcare division.

Bruce Evans, a managing partner of Summit Partners, has been named one of three new independent directors at OptionsXpress Holdings Inc. (Nasdaq: OXPS). Summit had backed OptionsXpress prior to its IPO earlier this year.

Monday, April 4

Materialization of the “Phantom Fund”

It seems that I’ve been had.

Last month, I mentioned a rumor that former Battery Ventures pro (and part-time film producer) Todd Dagres had returned to Boston to launch a new VC firm focused on the digital media and entertainment sectors. The item also included talk that Santo Politi, a partner with Charles River Ventures, would co-lead the effort.

Politi wouldn’t return my calls, but Dagres insisted that any such talk was mere gossip, and that he had no interest in launching any sort of formal firm or fund. He said it would be “much too organized,” and added that the rumor might have sprung from some angel inv*sting he was doing with Politi and a handful of operating folks. I took Dagres’ denial at face value, and even referred to the effort as a “phantom fund” in last Wednesday’s column.

But it turns out that there is nothing phantom about the fund offering, which is being taken on the road to perspective LPs this week. Maybe Dagres simply wanted to maintain some stealth secrecy, or perhaps wasn’t even yet sure if the thing would come together. Either way, the Boston-based firm is being called either Spark Capital or Archon Ventures (I’ve seen/heard both names), and will look to raise $200 million for its inaugural fund, with a 25% carry and a 2.5% annual management fee. Its inv*stment strategy will be to back companies at the intersection of media, entertainment and technology.

The two principals are Dagres and Politi (who will leave CRV at the end of June), although former CRV chief financial officer Paul Conway also has come aboard. Expect some additional hires in the upcoming weeks and months, plus the formation of a seven-person advisory board…

** Seems that not everyone likes Microsoft Corp.’s $120 million acquisition of Groove Networks.

** A pair of notes from the new print version of PE Week: Symphony Capital Partners is looking to raise its next Asian mid-market fund with a target of $350 million to $500 million, while Edison Venture Fund is looking to raise at least $200 million for its sixth fund. Also in this issue: A final write-up of the Testa Hurwitz saga, more info on John Miner leaving Intel Capital and a cautionary tale of inv*sting in China from H&Q Asia Pacific. Subscribers should go to Weekly Headlines.

Texas Pacific Group and Apax Partners have agreed to acquire Telecom Italia‘s 80.87% stake in TIM Hellas Telecommunications SA (Nasdaq: TIMHY), a Greece-based wireless telecom operator. The deal is valued at just over 1.11 billion euros, or approximately 16.43 euros per share, and is expected to close by July. D*bt financing will be provided by J.P. Morgan and Deutsche Bank.

Siano Mobile Silicon, an Israel-based fables semiconductor company focused on mobile digital television receiver solutions, has raised $11.5 million in Series A funding. JVP led the deal, and was joined by Walden International and Star Ventures. Siano was founded in June 2004 by company CEO Alon Ironi, former CEO of Emblaze Semiconductor, and Adam Fisher, a JVP general partner. Ironi serves as the company’s CEO, while Fisher is company chairman.

Storm Ventures has closed its third fund with $200 million, according to a regulatory filing. Limited partners include the National Railroad Retirement Inv*stment Trust.

Blue Security Inc., a Menlo Park, Calif.-based developer of anti-sp*m and anti-sp*ware solutions, has raised $3 million in first-round funding from Benchmark Capital.

eASIC Corp., a San Jose, Calif.-based provider of configurable logic and ASIC products, has raised $7.5 million in second-round funding from Kleiner Perkins Caufield & Byers and Vinod Khosla, a KPCB partner. The company previously raised $5 million in May 2004.

Tideline Capital, a San Francisco-based provider of outsourced vendor services for the software industry, has raised more than $10 million in Series A funding. Voyager Capital and Odin Capital group co-led the deal, and were joined by Windingo Partners. The company also secured $105 million in d*bt funding, which will be used to underwrite installment payment agreements for the software purchases made by the customers of Tideline’s clients. Wachovia Securities provided $100 million of the instrument, with Comerica Bank providing the other $5 million.

Valen Technologies Inc., a Denver, Colo.-based provider of predictive modeling and decision-enabling software for the insurance industry, has raised $2.94 million in Series B funding led by Appian Ventures. It is the company’s first round of institutional funding.

Hycrete Technologies Inc., a Jersey City, N.J.-based maker of a water-based corrosion inhibitor, has raised an undisclosed amount of Series A funding led by NJTC Venture Fund.

Rave Wireless Inc., a New York-based wireless startup, has secured over $2.1 million in Series A funding from Sigma Partners and Bain Capital Ventures, according to a regulatory filing.

Benchmark Capital Europe has acquired a 40% stake in Codemasters Software Co. Ltd., a UK-based maker of computer and video games like Colin McRae Rally and Brian Lara Cricket. No financial terms were disclosed.

Lions Gate Entertainment Corp. (NYSE: LGF) reportedly has expressed interest in acquiring HIT Entertainment PLC, a publicly-traded UK producer of children’s television programming that already has accepted a takeover bid from Apax Partners.

International Coal Group Inc. is planning to file for an IPO this month, with the actual pricing expected to occur during the second quarter. The coal conglomerate also announced that it has agreed to acquire Anker Coal Group Inc. and CoalQuest Development LLC for a combined $275 million in stock ($173.25m for Anker, $101.75m for CoalQuest), and the assumption of $25 million in funded ind*tedness. W.L. Ross & Co. currently owns 9.2% of ICG, 43% of Anker and 51% of CoalQuest.

The Cloud Ltd., a UK-based Wi-Fi company controlled by 3i Group, has expanded into Germany with the acquisition of Airnyx AG. No financial terms were disclosed.

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

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.

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

Stanley Mayromates has been named CIO of the Massachusetts Pension Reserves Inv*stment Management Board (MassPRIM), after having served in a deputy CIO role. He replaces Jerrold Mitchell, who announced his intention to retire late last year. In other MassPRIM news, the system has named Cliffwater LLC as its new inv*stment consultant, after having retained Wilshire Associates for the past two decades.

Jonathan Lazarus, former vice president of Microsoft Corp., is considering the creation of a venture capital firm, according to the Seattle Post-Intelligencer. He told the paper that he is considering the idea, but that he has not yet made any formal plans. Lazarus served as editor of PC Magazine before joining Microsoft in 1986, and is a well-known angel inv*stor in the Northwestern U.S.

Get last week’s complete PE Week Wire here.