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On The Run
No time to chat this morning, as I’ve got to head over to the Wharton Private Equity Conference. Just imagine if you had advertised in this space… you’d be getting all the attention.
Hicks, Muse, Tate & Furst announced that its London office has been legally established as a separate, stand-alone entity from its Dallas office. The buyout firms now will be referred to as HMTF Europe and HMTF North America, respectively.
MCI Inc. (Nasdaq: MCIP) has agreed to acquire Herndon, Va.-based managed security services provider Network Security Technology Inc. (NetSec) for approximately $105 million in cash. NetSec has raised over $35 million in VC funding since its 1998 inception, from groups like ArrowPath Venture Capital and Mobius Venture Capital. www.netsec.com www.mci.com
Celanese Corp., a U.S. holding company for German chemicals maker Celanese AG, has priced 50 million common shares at $16 per share (below its $19-$21 offering range), for a total IPO take of approximately $800 million. It will trade on the NYSE under ticker symbol CE. Celanese also granted underwriters a 30-day option to purchase another 7.5 million common shares to cover any over-allotments, and priced 9.6 million shares of 4.25% convertible perpetual preferred stock with a liquidation preference of $25 per share. Celanese was acquired last year for around 3.2 billion euros by The Blackstone Group. www.celanese.com
Powerlase Ltd., a UK-based developer of industrial solid state laser systems, has raised GBP 7 million in second-round venture funding. Deutsche Venture Capital and MTI Partners co-led the deal, and were joined by fellow new investor Alice Ventures. Return backers included Cazenove Private Equity and FNI Venture Capital. Powerlase was advised by FirstStage Capital. www.powerlase.com
Constella Group LLC, a Durham, N.C.-based provider of outsourced health services and solutions, has raised $61 million in its first institutional round of funding since being founded in 1983. Wachovia Capital Partners led the equity and debt transaction, and was joined by Wakefield Group. www.constellagroup.com
Rostima Ltd., a UK-based provider of enterprise workforce management solutions, has received an undisclosed amount of venture funding from existing investor Oxford Capital Partners. www.rostima.com
Trimaran Capital Partners has agreed to acquire Mountainside, N.J.-based steakhouse chain operator Charlie Brown’s Inc. from Castle Harlan. The deal is valued at $140 million, and is expected to close later this quarter. Castle Harlan originally bought the company in 1997. www.charliebrowns.com
Cinven has entered the bidding for UK port operator Mersey Docks and Harbour Co., according to Reuters. The private equity firm is teaming up with CVC, which already had initiated talks, for the prospective deal, which could value Mersey at upwards of GBP 710 million ($1.33 billion).
Great Hill Partners has led an acquisition of Payroll Associates Inc., a Moorestown, N.J.-based provider of production systems for payroll services bureaus. No financial terms were disclosed for the deal, which also included participation from Baird Venture Partners and North Hill Ventures. The Corum Group advised Payroll Associates on the deal. www.paychoice.com
SeaBright Insurance Holdings Ltd., a Seattle-based provider of worker compensation insurance, priced 7.5 million common shares at $10.50 per share (middle of its $9-$11 range), for a total IPO take of approximately $78.75 million. The company will trade on the Nasdaq under ticker symbol SEAB. Summit Partners held a 98.4% pre-IPO stake in the company, and will maintain a 50.1% post-IPO position. It did not sell any shares during the IPO. www.sbic.com
ViaCell Inc., a Boston-based biotech company focused on cellular therapies for cancer, infertility and certain genetic and cardiac diseases, priced 7.5 million common shares at $7 per share (low end of $7-$9 offering range), for a total IPO take of approximately $52.5 million. It will trade on the Nasdaq under ticker symbol VIAC. ViaCell had raised around $120 million in total VC funding, from groups like MPM Capital, Amgen, Tullis-Dickerson & Co., Zero Stage Capital, DWS Investment, Nomura International and TA Associates. www.viacellinc.com
IP2IPO Ltd. has acquired Techtran Group Ltd., a UK-based provider of outsourced commercialization services for university-founded intellectual property, for GBP 20 million. IP2IPO made a GBP 2 million investment in Techtran last July. www.techtran.co.uk www.ip2ipo.com
Schering-Plough Corp. (NYSE: SGP) has agreed to acquire Cambridge, Mass.-based drug company NeoGenesis Pharmaceuticals Inc. for an undisclosed amount. NeoGenesis has raised VC funding from OrbiMed Advisors, Oxford GlycoSciences, Valentine Partners, Fort Washington Capital Partners and Essex Street Associates.
Pfizer Inc. (NYSE: PFE) confirmed reports that it plans to acquire Angiosyn Inc. for approximately $527 million. Angiosyn, a La Jolla, Calif.-based biotech company focused on angiogenesis, is a portfolio company of Alta Partners. www.angiosyn.com
Dolan Media Co. of Minneapolis has acquired Counsel Press, a New York-based provider of appellate services to the legal market. No financial terms were disclosed. Dolan Media was recapped in 2003, and lists its investors as ABRY Mezzanine Partners, BG Media Partners, Caisse de depot et placement du Quebec, Cherry Tree Investments, MediaPower LLC and Winton Partners. www.dolanmedia.com
Innovation Philadelphia has closed the Mid-Atlantic Angel Group Fund I with $3.3 million. Investors include LORE, Robin Hood Ventures, the Ben Franklin Technology Development Authority, the Science Center and the Delaware Innovation Fund. www.IPphila.com
Cleantech Venture Network, a Howell, Mich.-based group that promotes venture investment in clean technology companies, has named Cheryl Bain as director of business development. The move coincides with the opening of the group’s new satellite office in San Francisco. www.cleantechventure.com
THURSDAY, JANUARY 20
Apprentices, Presidents and More…
Tonight, NBC will begin airing its latest installment of The Apprentice, which is being billed as Book Smarts vs. Street Smarts. Translated, that means high school diplomas vs. college diplomas, although a quick look through the contestant bios indicates that both groups are dominated by yuppie Donald wannabes. What is completely absent from the new candidate pool, however, are venture capitalists. You might remember that David Gould, a senior associate with Merlin BioMed Group, was the first candidate fired on the inaugural season, while former ABS Capital and Advent International associate Ivana Ma got the boot near the end of season number two.
I’ve never spoken with David, but did grab a cup of coffee earlier this month with Ivana (a onetime PE Week Wire reader), for a Q&A that will run in the February issue of Venture Capital Journal. We obviously talked about the infamous skirt-dropping incident, but focused more on why any VC would want to do a reality show in the first place (this is a question that many of you wrote in to ask after I first wrote about Ivana’s participation a few months ago). I also was curious to know if she believed her VC skills would help her compete. The short answer to question one was partially that she wasn’t thrilled with her Advent experience (compared to how much she enjoyed ABS Capital), and partially that the Apprentice auditions took place directly across the street from Advent’s downtown Boston office.
As for VC skills as an Apprentice aid, Ivana said, in part: “I definitely felt like my venture experience would help, because you are exposed to lots of different types of companies, and really learn what makes a business succeed, or what makes a business fail. but most of the tasks were sales, marketing or promotions in entertainment and retail. So that’s completely different from venture, which is more about high-growth industries.”
One of the more interesting tidbits I gleaned from our discussion, however, had to do with why she felt compelled to quit Advent, instead of working out some sort of leave of absence while the show filmed. It seems that Ivana was not allowed to tell anyone she was doing the show, unless they first signed a nondisclosure agreement. In other words, she basically had to tell her boss: “Please sign this NDA, and then I’ll tell you what you’re not allowed to disclose.” Advent, understandably, balked at such a request, at which point she chose the show over her job.
Bogus Buyout Fund: Two weeks ago, I told you that a financial trade pub had written that Austin Ventures was raising an $800 million buyout fund. Remember how I then told you that this information was completely wrong, and apparently rooted in the fact that AV is helping to raise new funds for a pair of later-stage investment groups (Texas Growth Fund with a $300M target and Escalate Capital with a $200M target)? Well, that same publication repeated the news this morning, in a compilation-type article about buyout firm fundraising. This time it’s a different author, but aren’t some of the editors the same?
Next Inauguration: There are some rumblings that Virginia Gov. – and former Columbia Capital partner — Mark Warner might be gearing up for a 2008 Presidential run. You can even buy (unauthorized) bumper stickers and yard signs at this website. Just imagine, for a moment, if Warner gets the Democratic nod, and Mass. Gov. Mitt Romney gets the GOP nod. The former is far more likely than the latter, but we actually have the possibility of a presidential contest between two private equity pros. Gentlemen, start your contributing.
Wharton Conference: Tomorrow, I’ll be moderating a VC Exits panel at the sold-out Wharton Private Equity Conference. I’ve got a list of questions prepared, but could always use some more interesting ones. If there is something a bit offbeat that you think might be relevant and worth discussing, shoot me an email. Also, tomorrow’s Wire will emanate from a friend’s apartment in Philly, so advance apologies for its lack of column.
Mohr, Davidow Ventures has closed its eighth fund with $400 million in limited partner commitments. The firm also has added Michael Goldberg as a general partner. Goldberg most recently served as managing director of Jasper Capital and as co-chair of the California Research & Cures Coalition (i.e., pro-Prop 71 stem cell campaign). Previous roles include being CEO of OnCare and a partner with venture firm Sevin Rosen Funds. www.mdv.com
Patrick Von Bargen has agreed to join the Kauffman Fellows Program as CEO of its Center for Venture Education, effective at the end of February. Von Bargen currently serves as managing executive for policy and staff at the U.S. Securities & Exchange Commission (SEC).
XenoPort Inc., a Santa Clara, Calif.-based biopharmaceutical company focused on drug absorption, has filed to raise $86.25 million via an IPO of common stock on the Nasdaq under proposed ticker symbol XNPT. Significant shareholders include Venrock Associates, Skyline Ventures, ARCH Venture Partners and OrbiMed Advisors. www.xenoport.com
CHF Solutions Inc., a Brooklyn Park, Minn.-based maker of medical devices for cardiac care, has raised $22.9 million in new venture funding. MPM Capital and SV Life Sciences co-led the deal, and were joined by Investor Growth Capital, Kaiser Permanente Ventures, Brightstone Capital and Mason Wells Biomedical. www.chfsolutions.com
OctoPlus, a Netherlands-based drug development and delivery company, has raised $23.85 million in second-round funding. Life Sciences Partners and S.R. One co-led the deal, and was joined by Innoven Partenaires, Fortis Private Equity and SurModics Inc. www.octoplus.nl
AdBrite Inc., a San Francisco-based online advertising company founded by F***kedCompany.com founder Philip Kaplan (a.k.a. Pud), has received $4 million in venture funding from Sequoia Capital, according to the Wall Street Journal.
Enobia Pharma Inc. (a.k.a. BioMep), a Montreal-based biotech company focused on enzyme-replacement therapies for bone diseases, has raised more than Cdn$19 million in third-round funding. Desjardins Venture Capital was joined on the deal by return backers Innovatech Montreal, Fonds de Solidarite FTQ and T2C2/Bio 2000. www.enobia.com
Plasso Technology Ltd., a UK-based surface engineering company, has raised $2.8 million in second-round funding from East Hill Management Co. www.plasso.co.uk
Antenova Ltd., a UK-based integrated RF solutions company, has raised $12 million in Series C funding. Return backers included Quester, Cambridge Gateway Fund, FNI Venture Capital and Nippon Investment Fund. www.antenova.com
Akimbi Systems Inc., a Mountain View, Calif.-based developer of virtual infrastructure management software, has raised $3.3 million in Series A funding at a post-money valuation of approximately $6.3 million. Hummer Winblad Venture Partners and Partech International co-led the deal, and were joined by Stanford University. www.akimbi.com
SolomonEdwardsGroup LLC, a King of Prussia, Pa.-based business consulting and accounting services firm, has raised $3.2 million from Argosy Partners and NewSpring Mezzanine Capital. www.solomonedwards.com
Quadrangle Capital Partners and Citigroup Venture Capital have agreed to acquire Waynesboro, Va.-based telecom company NTelos Inc. in a three-part recapitalization and sale agreement valued at approximately $750 million. The first part of the transaction will have NTelos refinance its existing debt and repurchase up to 75% of its equity in a self-tender offer at $40 per share. Next, Quadrangle and CVC will acquire up to 24.9% of the post-recap equity at $40 per share. Following receipt of regulatory approvals, the two firms will acquire the remaining equity for $40 per share. The two largest Ntelos shareholders – Morgan Stanley and Capital Research & Management Co. – have agreed to the transaction. www.ntelos.com
The Riverside Co. has acquired Connor Sports Flooring Inc., an Arlington Heights, Ill.-based provider of maple hardwood sports flooring solutions. Riverside will add the company to its Salt Lake City-based Sports Court platform company, which was acquired in June 2004. No financial terms were disclosed. www.connorfloor.com www.sportscourt.com
SCF Partners reportedly has acquired Heck’s Trucking & Oilfield Hauling Ltd., an Alberta, Canada-based rig moving company. No financial terms were disclosed. www.heckstrucking.com www.scfpartners.com
AlgoRx Pharmaceuticals Inc., a Secaucus, N.J.-based drug company focused on pain management, has set its proposed IPO terms to 6.8 million common shares to be offered at between $10 and $12 per share. The company has received approximately $97 million in total VC funding since its 2001 inception, with significant shareholders including InterWest Partners, JPMorgan Partners, Sofinnova Ventures, Advent International, Index Ventures and Pacific Rim Ventures. www.algorx.com
Pfizer Inc. is nearing an agreement to acquire Angiosyn Inc. for upwards of $527 million, according to the Wall Street Journal. Angiosyn, a La Jolla, Calif.-based biotech company focused on angiogenesis, is a portfolio company of Alta Partners. www.angiosyn.com
WEDNESDAY, JANUARY 19
There is so much news this morning that my fingers are literally numb, but it’s worth a few more keystrokes to share the following developments:
1. I think it is safe to say that Goodwin Procter has suddenly become Boston’s top private equity law firm, in terms of both size and stature. Not only has it completely raided the remains of Testa, Hurwitz & Thibeault’s group (as reported here last Friday night), but it also has grabbed five more partners from rival firm McDermott, Will & Emery. Most notable among the MDE defectors is John Egan, who actually had been a partner with Goodwin Procter before leaving in 1999 to serve as global head of MDE’s private equity and emerging companies group. Sources say that the Egan move was not directly related to Goodwin Procter’s THT landgrab, but that the total package puts Goodwin Procter approximately five years ahead of schedule in its effort to build a more comprehensive private equity/emerging companies practice. It also was a bit of a coup, since Egan is known to have been speaking with at least one other Boston-area firm.
Leaving with Egan are Robert Bishop, Christopher Brown, Jack Steele and David Powers (both Steel and Powers originally worked at Goodwin Procter, but moved to MDE with Egan in 1999). An MDE spokeswoman declined to comment on the departed partners, except to say that, “The firm wishes them well.”
More on this in the upcoming print edition of PE Week, and the March issue of Venture Capital Journal. Oh, but I’ll add that reports of Goodwin Procter hiring around 60 former THT attorneys seem pretty accurate. It has hired 19 partners so far (a few more are in negotiations), and hopes to add about 2 THT associates per partner.
2. In other personnel news, Merrill Lynch has decided that Michael Ricciardi will replace Kevin Albert as head of the firm’s private equity group, once Albert’s retirement becomes effective at month’s end. He previously served as the group’s head of distribution. In addition, Alan Pardee has officially been given the title of COO after doing the job de facto for a number of years, and Loren Boston has been named head of origination. For those who don’t know, Albert’s original ascension to the head of Merrill’s group was the catalyst for the past decade’s enormous amount of movement among private equity fund-raising pros. For a graphical flow-chart, check out page 5 of: http://www.mvision.com/PDFs/8.pdf (pdf required, you may need to copy and paste the URL into your browser).
3. Thomson Venture Economics and the National Venture Capital Association have released VC fund performance statistics, as of Q3 2004. The full release can be found here.
4. Finally, yes, I recognize that yesterday’s wire was dated Monday. All I can say in my defense was that it felt like a Monday.
Warren Acquisition Ltd. has completed its $3.1 billion acquisition of Rockaway, N.J.-based drug company Warner Chilcott PLC. Warren Acquisition was formed by private equity firms Bain Capital, DLJ Merchant Banking Partners, JPMorgan Partners and Thomas H. Lee Partners. As part of the deal, Warner Chilcott has de-listed its stock from the Nasdaq. www.warnerchilcott.com
Ahura Corp., a Burlington, Mass.-based manufacturer of portable optical instrumentation and subsystems for homeland security and life science applications, has raised $10 million in Series B funding. The Southern Ute Indian Tribe Growth Fund of Durango Colo. led the deal, and was joined by return backers ARCH Venture Partners, Castile Ventures and ComVentures. Ahura has raised $22.5 million in total VC funding since its May 2002 inception, including a $12.5 million Series A round at a post-money valuation of approximately $21 million. www.ahuracorp.com
Ralf Schnell has been named president and CEO of Siemens Venture Capital, effective February 1. He previously served as managing director of Infineon Ventures, which recently disbanded. www.siemensventurecapital.com
Massive Inc., a New York-based developer of an in-game advertising network, has raised $10 million in Series C funding. NeoCarta Ventures led the round, and was joined by return backers DFJ Gotham, DFJ New England, RRE Ventures, Tobat Capital and Newlight Associates. www.massiveincorporated.com
Sulake Corporation Oy, a Finland-based interactive entertainment company that specializes in multiplayer online games, has raised $23.5 million in VC funding. New investor Benchmark Capital was joined by return backers 3i Group and Finnish telecom company Elisa Group. www.sulake.com
Angle Technology Group, an international technology commercialization firm with offices in both the U.S. and UK, has launched a U.S. Ventures business. The effort will focus on building companies by identifying and commercializing university and corporate intellectual property. It will be run by Robert Kornblum, who joins Angle as a managing director after previously serving in executive roles with Manguistics Group Inc. and, before that, as a principal with Austin Ventures. www.angletechnologyventures.com
RewardsPlus of America Corp., a Hunt Valley, Md.-based provider of outsourced benefits management solutions, has raised $10.8 million in Series A recap funding. QuestMark Partners led the round, and was joined by return backers Century Capital, CMSH Ltd., Grotech Partners, Palm Partners and Piper Jaffray Ventures. www.rewardsplus.com
VoluBill, a Paris, France-based provider of mobile data charging solutions, has raised 11 million euros in Series C funding, at a post-money valuation of approximately 27.5 million euros. DVC Deutsche Venture Capital and SPEF Venture (Natexis Private Equity) co-led the deal, and were joined by return backers Sofinnova Ventures, Argo Global Capital and Sofinnova Partners. www.volubill.com
Quick Study Radiology Inc., a St. Louis-based, reportedly has raised $2 million in venture funding led by Advantage Capital Partners. The company has raised over $30 million in total VC funding since its 1997 inception. www.qs-r.com
IZZE Beverage Co., a Boulder, Colo.-based provider of sparkling juices, has raised $6.35 million in private equity funding. Sherbrooke Capital led the deal, and was joined by Tango and Greenmont Capital Partners. www.izze.com
IRise Inc., an El Segundo, Calif.-based provider of application definition software and services, has raised $15.8 million in third-round funding led by Morgan Stanley Venture Partners. The company has raised $28 million in total VC funding to date. In other iRise news, the company announced that Brooke Seawell, who recently joined New Enterprise Associates after five years with Technology Crossover Ventures, has joined its board of directors. www.irise.com
Interlink Networks Inc., an Ann Arbor, Mich.-based provider of wireless network security for small and mid-sized businesses, announced that it has raised $2.85 million in Series AA funding. Investors include Arbor Partners, Duchossois Technology Partners, Intel Capital and M-Group. The company has raised over $20 million in venture funding since its 2000 inception, with the $2.85 million deal closing last September. www.interlinknetworks.com
Fieldglass Inc., a Chicago-based provider of vendor-neutral procurement solutions, has raised $11 million in new venture capital funding. Grotech Capital Group led the deal, and was joined by return backers BlueStream Ventures, StarVest Partners and HLM Venture Partners. The company has raised approximately $40 million in total VC funding since its 1999 inception. www.fieldglass.com
Intelsat Ltd. reportedly is renegotiating its buyout by Zerus Holdings Ltd., after one of its satellites failed over the weekend. The deal is currently valued at $5 billion, including $3 billion in cash, or $18.75 per ordinary share, and the assumption of around $2 billion in Intelsat debt. Zeus is comprised of Apax Partners, Apollo Management, Madison Dearborn Partners and Permira. www.intelsat.com
GTCR Golder-Rauner has formed an acquisition platform named H-Cube Inc., which will focus on businesses in the technology-based outsourcing space. The effort is being done in partnership with Henry Hortenstine, a firmer executive vice president with Affiliated Computer Services Inc. (NYSE: ACS), who will serve as Dallas-based H-Cube’s CEO. GTCR plans to invest up to $100 million into H-Cube. www.H-CubeInc.com www.gtcr.com
Saratoga Partners has agreed to sell specialty printing inks company Sericol to Fuji Photo Film Co. Ltd. (NasdaqSC: FUJIY) for approximately $230 million. Saratoga acquired Sericol in February 2003 from British Petroleum subsidiary Burmah Castrol PLC.
Advent International has confirmed that it is considering a buyout bid of Spain-based airport retailer Aldeasa SA. An existing bid of 609 million euros already is on the table from a consortium that includes Corporacion Financiera Alba SA, Omega Capital and Mercapital.
Providence Equity Partners has received authorization from the Israeli government to bid for a controlling stake in phone company Bezeq Israel Telecom.
The Carlyle Group has increased its buyout bid for Dutch oil refinery PetroPlus International NV, according to The Deal. Carlyle, in partnership with its Carlyle-Riverstone Energy affiliate, now values PetroPlus at 522.6 million euros, following an original valuation of approximately 472 million euros. www.petroplus.com
Synta Pharmaceuticals Corp., a Lexington, Mass.-based drug company focused on cancer, diabetes and inflammatory diseases, has filed to raise $115 million via an IPO of common stock on the Nasdaq under proposed ticker symbol SNTA. It is raised over $196 million in venture capital funding from firms like Caxton Group, Galleon Group, AIG SunAmerica, Wyandanch Partners and Aperture Partners. www.syntapharma.com
GeoLogistics Corp., a Santa Ana, Calif.-based international freight forwarder, has filed to raise $175 million via an IPO of common stock on the Nasdaq under proposed ticker symbol GEOL. The company is majority-owned by Questor Partners, and also lists Oaktree Capital Management and Trust Company of the West as shareholders. www.geo-logistics.com
Interactive Health Inc., a Long Beach, Calif.-based provider of robotic massage chairs and zero-gravity chairs, has set its proposed IPO terms to over 4.93 million shares to be offered at between $15 and $17 per share. The company is majority owned by private equity firm Whitney & Co. www.interhealth.com
Eastman Kodak Co. (NYSE: EK) has agreed to acquire OREX Computed Radiography Ltd., an Israel-based provider of computed radiography systems that enable medical practitioners to acquire patient x-ray images digitally. The deal is valued at approximately $50.5 million in cash, and is expected to close later this quarter. OREX had received venture funding in 2001 from firms like Medica Venture Partners. Dor Venture Management, Divine InterVentures and Reico Ventures. www.orex-cr.com www.kodak.com
PacketExchange Inc., a UK-based Internet peering company, has acquired XchangePoint, a UK-based provider of metro area interconnectivity, for an undisclosed amount. The deal comes just two months after PacketExchange received $3 million in venture funding from Bank of Scotland Equity. ExchangePoint has received VC funding from GMT Communications Partners, Nexus Group, PolyTechnos Venture Partners and Clairsholme Investment. www.packetexchange.net www.xchangepoint.com
Brainhunter Inc. of Toronto has acquired Vision2Hire Solutions, a Vancouver-based provider of job applicant tracking systems. The deal included an undisclosed amount of cash, and a zero-interest note payable of Cdn$446,054 convertible for a term of 3 years to Brainhunter shares at an exercise price of Cdn$2 per share. Vision2Solutions had received VC funding from Discovery Capital. www.brainhunter.com www.vision2hire.com
Motorola Inc. (NYSE: MOT) has acquired Ucentric Systems Inc., a Maynard, Mass.-based provider of media networking software for the connected home. No financial terms were disclosed. Ucentric Systems had raised over $35 million in venture funding from groups like Polaris Venture Partners and Pilot House Ventures. www.motorola.com www.ucentric.com
Graver Technologies, a subsidiary of the Marmon Group of Cos., has acquired HydroGlobe Inc., a Hoboken, N.J.-based provider of water purification technologies. No financial terms were disclosed. HydroGlobe had raised $1.1 million in Series A funding from SAS Investors, the New Product Development Consortium (NPDC) and angel investors. www.hydroglobe.com
BioBase GmbH, a Germany-based commercial developer of biological databases, has acquired Beverley, Mass.-based Proteome Inc., a wholly-owned subsidiary of Incye Corp. No financial terms were disclosed for the deal, which was financed by existing BioBase investor AVIDA. www.biobase.de
Aligo Inc., a San Francisco-based provider of mobile field force software solutions, has acquired H2 Technologies, a Stone Mountain, Ga.-based developer of service management, dispatching and mobile field service software. Aligo has raised over $22 million in VC funding from firms like Motorola Ventures, Dolphin Equity Partners, RBC Capital Partners and Thomas Weisel Partners. www.aligo.com www.h2tech.com
Mark Canha has joined Prism Venture Partners as a venture partner. He has served as an executive consultant to Prism for the past year, and most recently served as president of broadband services for Broadwing Corp. (Nasdaq: BWNG). In other Prism news, the firm has promoted senior associates Brendan O’Leary and William Kohler to the position of principal. www.prismventure.com
Miller Buckfire Ying & Co. has promoted both Mark Hootnick and Durc Savini to the position of managing director, while also promoting both John Bosacco and Jeffrey Finger to the position of principal. All three men originally worked at the financial restructuring group of Dresdner Kleinwort Wasserstein, which was spun off into the independent Miller Buckfire entity in July 2002. www.mbyco.com
Innovation Advisors, a New York-based investment bank focused on middle-market technology companies, has promoted Niraj Gupta to the position of vice president. It also has added George Stephen (formerly with Kruse Investment Co.) as an associate, and Raphael Garfield (formerly with CSFB) as a senior analyst. www.innovationadvisors.com
Steve Mercil, CEO of the Minnesota Investment Network Corp., has been appointed to the board of the National Association of Seed and Venture Funds (NASVF). www.mincorp.org
Scorpion Capital Partners has closed its inaugural fund with $120 million. The New York-based firm will participate in both buyouts and growth capital deals for small-to-middle market companies. It also announced that it has been awarded an SBIC license, with the SBA providing approximately $80 million of the $120 million total. www.scorpioncap.com
Indiana Governor Mitch Daniels said during his annual State of the State address, that he would propose “existing local economic development funds be freed to establish new venture capital funds in each region of [Texas].”
TUESDAY, JANUARY 18
20,000 and Counting.
Every time the PE Week Wire adds another thousand subscribers (we hit the 20,000 mark over the weekend), I like to remind you that this free service is just a tiny speck on the universe that it Private Equity Week. To get access to the entire information cosmos, however, you need to become a paid subscriber. So whip out that corporate credit card (or “borrow” one from your boss), and sign up today. Paid subscribers get a weekly print publication and unlimited access to the our website’s protected sections, within which you’ll find in-depth deal news, fund news, market analysis and proprietary data. Today, for example, paid PE Week readers can learn about how a company called Adteractive is following the playbook of online marketing peer FastClick (even down to the $75 million Series A round), or how Shasta Ventures is nearing a final close on its inaugural fund. So just click the “Subscribe” button at the right-hand side of this email, or call Rob Mills at 917-408-5254.
Rescheduled: The Testa Hurwitz events of Friday and the Monday holiday kind of messed up our schedule, so here’s a brief bit of reader feedback on Jack Meyers’ impending departure from the Harvard Management Co. Specifically, readers were interested in my support of the current HMC compensation structure, despite criticism from certain alums that the system is far too lucrative for a non-profit university. It’s worth noting that I’m not a Harvard alum, although Haverford kind of sounds like Harvard, and I rarely correct people who mistake the two.
VC John was one of the few correspondents to agree with my assessment, writing: “I went to Harvard, and am extremely pleased with the way that HMC has helped grow the school’s endowment. Does it pay its money managers more than other universities? Sure, but it also has some of the best returns, which means it can build more buildings, hire better professors and provide more financial aid. The idea that there is this huge pool of fellow alumni willing to work at HMC on a quasi-volunteer basis is suspect. Where are they? Would HMC really turn them down, if they exist?”
On the other side is Michael: “I am one of those alums that finds the HMC compensation structure obscene. My main objection is that the HMC managers are being paid as if they are on Wall Street, but do not have the same demands placed upon them that a Wall Street manager would have: They do not have to raise a dime of money. They do not have to worry about the tax consequences of their decisions. They do not have to worry about sudden redemptions wreaking havoc on their investment plans. They do not have to reassure concerned LPs during market downturns. They do not have to worry about the multitude of regulations that govern Wall Street money managers.
I also don’t believe, with all of the thousands of money managers in the U.S. – a good number of whom have net worths in the hundreds of millions (or close to it) – that there are not some very good ones out there who are ready to retire, avoid the hassles listed above and go work at HMC for a measly million dollars per year, while living well on their accumulated wealth. It is outright laziness (and greed) that [HMC] has not found these managers.”
Event: Paid subscribers to Buyouts Magazine probably have noticed that the print publication has a new look. It also will have a gala magazine re-launch party, on Wednesday, Feb. 16 at the Manhattan Penthouse in New York. Go here for more information.
MeadWestvasco Corp. (NYSE: MWV) has agreed to sell its paper business and associated assets for $2.3 billion to a newly-formed company controlled by Cerberus Capital Management. The acquiring company will be based in Dayton, Ohio, and be overseen by the current MeadWestvasco Papers management team, including president Peter Vogel Jr. www.meadwestvaco.com
Jobster Inc., a Seattle-based provider of online recruiting services that leverage social networking technology, has raised $8 million in Series A funding from Trinity Ventures and Ignition Partners. The company raised a seed round led by Ignition last June, and has now raised $10.5 million in total. It expects to launch its services later this spring. www.jobster.com
Bill Joy, co-founder and chief scientist of Sun Microsystems Inc. (Nasdaq: SUNW), has joined Kleiner, Perkins, Caufield & Byers as a partner. Prior to co-founding Sun, Joy designed and wrote Berkeley UNIX, the first open source operating system with built-in TCP/IP. www.kpcb.com
Chelsio Communications Inc., a Sunnyvale, Calif.-based provider of protocol acceleration technology, has raised $25 million in Series C funding. Invesco Private Capital led the deal, and was joined by fellow new investor Hotung Capital Management. Return backers included Sequoia Capital, New Enterprise Associates, Global Catalyst Partners, Pacesetter Capital Group, Horizon Ventures and Abacus Capital. Chelsio has raised $55 million in total VC funding. www.chelsio.com
Unitrends Software Corp., a Columbia, S.C.-based provider of enterprise data production products and services, has raised $8.1 million in Series B funding. The aurora Funds led the deal, and was joined by fellow new investors Harbert Venture Partners and eCentury Capital. Return backer The Trelys Funds also participated. www.unitrends.com
Vocent Solutions Inc., a Menlo Park, Calif.-based provider of voice security solutions, has raised $6.4 million in Series C funding led by Menlo Ventures. In other Vocent news, the company has named former Siebel Systems Inc. executive Jeffrey Schneel as its new president and CEO. www.vocent.com
Zilliant Inc., an Austin, Texas-based provider of strategic pricing applications, has raised $12 million in new venture funding. Cardinal Venture Capital led the deal, and was joined by return backers JPMorgan Partners, Austin Ventures and Trellis Partners. The company has raised approximately $45 million in total VC funding since its 1998 inception. www.zilliant.com
Compound Therapeutics Inc., a Waltham, Mass.-based biotech company focused on oncology, has raised $15.5 million in an expansion of its Series A funding round. The round now totals $28 million, with the most recent tranche including return participation from Atlas Venture, Flagship Ventures and Polaris Venture Partners. www.compoundtherapeutics.com
SchemaLogic Inc., a Redmond, Wash.-based provider of enterprise metadata and taxonomy management software, has raised $4.6 million in second-round funding. Madrona Venture Group led the deal, and was joined by return backers The Phoenix Partners and company co-founder Trevor Traina. www.schemalogic.com
BlueSocket Inc., a Burlington, Mass.-based provider of WLAN security and management systems, has raised $10 million in fourth-round funding (Series B). Return backers included Vesbridge Partners, Menlo Ventures, Boulder Ventures, Ascent Venture Partners, Ridgewood Capital and Ironside Ventures. The company has raised $42 million in total VC funding since its 1999 inception. www.bluesocket.com
AlterPoint Inc., an Austin, Texas-based provider of enterprise network change and configuration management solutions, has raised $12 million in Series C funding. JK&B Capital led the deal with a $7 million investment, and was joined by return backers Austin Ventures and Palomar Ventures. The company has raised $26.8 million in total VC funding since its 2001 inception. www.alterpoint.com
Friction Control Solutions Ltd., an Israel-based developer of technology to significantly reduce friction of moving parts, has received a $1.1 million in venture funding from Aviv Venture Capital. FriCSo previously had raised $850,000 from angel investors and Israeli technology incubator LN Innovative Technologies Ltd. www.avivvc.com
Teavana Holdings Inc., an Atlanta, Ga.-based specialty retailer of loose teas and related merchandise, has received an undisclosed amount of growth capital funding from GKM Growth Investors. www.teavana.com
Advanced Cell Technology Inc., a Worcester, Mass.-based biotech company known for its use of embryonic stem cells, this week plans to complete and $8 million venture capital round with unnamed investors, according to The Boston Globe. The report adds that ACT is planning to go public via a reverse merger into the shell of Native American figurine maker Two Moons Kachinas Corp. www.advancedcell.com
CacheLogic, a UK-based, has raised $5.6 million in a Series B funding round. 3i Group led the deal, and was joined by return backers Pentech Ventures and the Cambridge Gateway Fund. www.cachelogic.com
Quadrangle Capital Partners and Citigroup Venture Capital are nearing a deal to acquire Waynesboro, Va.-based telecom company NTelos Inc. for approximately $750 million, according to the Wall Street Journal. www.ntelos.com
ECI Partners has sold UK restaurant chain operator Tragus Holdings Ltd. to L&G Ventures for an undisclosed amount. ECI had sponsored a GPB 25 million management buyout of Tragus in May 2002, and reports that it will receive a 5.3x return on its original investment. www.tragusholdings.com
FairPoint Communications Inc., a Charlotte, N.C.-based provider of telecom services, has set its IPO terms to 25 million common shares being offered at between $18 and $20 per share. Controlling shareholders are listed as buyout firms Thomas H. Lee Partners and Kelso Equity Partners. www.fairpoint.com
Builders FirstSource, a Dallas-based provider of building products to professional homebuilders, said that it plans to file IPO registration papers with the SEC next month. The company currently is controlled by private equity firm JLL Partners. www.buildersfirstsource.com
Troux Technologies Inc., an Austin, Texas-based provider of IT governance software, has acquired Norwegian enterprise architecture modeling company Computas Technology, a subsidiary of ComputasAS. No financial terms were disclosed. In related news, Troux has raised $16 million in venture funding led by Computas AS backers Four Seasons Ventures, Eqvitec Technology and IT Provider. Troux shareholders Austin Ventures and Greylock Partners also participated. www.troux.com www.computas.no
Corporate Project Resources Inc., a Chicago-based provider of interim marketing services to Fortune 500 companies, has acquired Hire Intellect, an Atlanta-based marketing and communications staffing company. No financial terms were disclosed. CPRi counts William Blair Capital Partners as a minority shareholder. www.cpri.com
Morgenthaler Partners has led a merger of portfolio companies Fortran Communications Systems and Mahon Communications Corp. with Comm-Works Inc., a Minneapolis-based integrator of voice and data solutions. Morgenthaler led the merger, and was joined by Comm-Works cofounders Alan Lampe and Todd Eberhardt. Debt financing was led by Capital Source, and also included J.P. Morgan Chase. No pricing details were disclosed. www.comm-works.com
Erez Ofer and Yoram Snir have joined Greylock Partners as venture partners focused on the Israeli market. Ofer previously served as vice president of technology strategy for EMC Corp., while Snir led Cisco Systems Inc.‘s Israeli, Asia-Pacific, European and China M&A and investment activities. Ofer will work out of Israel. office, while Snir will work from Greylock’s San Mateo, Calif. www.greylock.com
Warburg Pincus is being investigated by South Korean regulators for possible illegal trading of shares in South Korean credit card issuer LG Card Co. The U.S.-based private equity firm acquired a minority position in LG Card in 2000, and sold off its position via a series of transactions following LG Card’s 2002 IPO. The investigation was launched around a year ago, with results expected to be disclosed next month. Warburg Pincus has denied any wrongdoing, including the possible accusation that it used insider information when making its trades.
The Flemish government reportedly is considering a further privatization of GIMVNV, a Belgium-based private equity firm in which it holds a 70% ownership position.
SunBridge Corp., a Japan-based provider of venture capital investment and professional services, has formed SunBridge Partners, a Palo Alto, Calif.-based venture arm that will invest in U.S. technology companies. The new group’s principals include SunBridge CEO Allen Miner, and Equitek Capital directors Ken Ehrhart, Paul Grim and John Gannon. www.sunbridgepartners.com
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