PE Week Wire: Friday, January 9, 2009

The sun is shining, the unemployment rate is rising and I’ll never forgive Maria Bartiromo for yesterday bringing David Ortiz and Joba Chamberlain together for a joint interview at CES (unless Ortiz had decked Joba, and ripped off his shirt to reveal a Youk jersey). In other words, it’s time for some Friday Feedback:

*** First up are some emails on yesterday’s column about Sun Capital. Let’s lead with Tim: “You’re an idiot.” Now moving onto Robert: “I think what you might actually be seeing is a reflection of the fact that Sun has strayed far from its mid-cap distressed strategy. It’s gotten involved in a bunch of much larger deals, plus it has that hedge-type vehicle that has gotten killed.”

Andy: “You gave Sun a lot of grief for laying people off, but barely mention when PE firms do big layoffs at their portfolio companies. The laid-off Sun employees will be just fine financially, whereas the same cannot be said of the hundreds – if not thousands — of people Sun has directly or indirectly laid off over the years. Doesn’t this deserve more attention?” Yes Andy, it does. A private equity firm takes on many responsibilities when it buys a company. The first is to the firm’s limited partners, but the second is to the portfolio company’s employees. And the two needn’t be mutually exclusive.

*** Sam on CBS shutting down WallStrip: “To me this is an indication that VCs still holding Web 2.0 content companies must be regretting any acquisition offers that they turned down in 2006 or 2007.”

*** A few emails on Cash4Gold raising over $40m in VC funding. Jared: “You’re missing the long-term macro thesis here. Would Cash4Gold have been a better investment in 2003? Probably so. Gold prices have spiked remarkably since 2002 when the commodities bull market began, after a multi-decade bear market. But does that mean equity in Cash4Gold is a bad investment now? Not at all. There’s a [macro-economic] perfect storm brewing that I would think will provide tailwinds for the company.”

ComBnkr writes: “Another group of competitors to Cash4Gold are the companies that put on the ‘Golddigger’ parties in suburbs around the country. They are like Tupperware parties except women bring all their old/broken/unwanted gold with them to party, get it weighed and go home with a fistful of cash.”

Jennifer: “If I were General Catalyst and Highland I’d be shouting about this deal from the rooftops. Most VCs agree with traditional model is broken, so why do they shy away from publicizing a non-traditional investment?” I agree Jennifer. They should put their mouths were their money is.

*** Andrew Ross Sorkin writes in to say: “Saw your post about the PE section moving lower on DealBook. It’s a computer glitch. We’re using a new system and it keeps moving PE to the bottom. We should have it fixed shortly. It is not a reflection on the state of the industry.” Methinks the computer system might be trying to tell Andrew something…

*** Two dozen emails on Marbury. Five of them placed the blame on Doc giving Scalabrine more PT. Five more came from delighted Kicks fans.

*** Owen: “It’s been nearly two months since the last Shindig. When are you going back out on the road?” Sooner than you might expect Owen, and to far more cities. Just need to get some logistics worked out (plus sign up sponsors – lemme know if you’re interested). Details hopefully in a few weeks.

Top Three

KPS Capital Partners has agreed to acquire Ireland-based fine china maker Waterford Wedgwood, which earlier this week entered administration. No financial terms were disclosed.

JibJab, a Venice, Calif.–based provider of digital greetings and online entertainment, has raised $7.5 million in Series C funding. Overbrook Entertainment and Sony Pictures Entertainment joined return backer Polaris Venture Partners. The company had previously raised around $10 million.

Terra-Gen Power LLC, a portfolio company of ArcLight Capital Partners, has acquired a portfolio of six wind projects from Airstream Energy LLC. No financial terms were disclosed. The projects are expected to generate approximately 2500MW of wind energy, and are based in Wyoming, Nebraska, Colorado, Kansas and New Mexico.

VC Deals

SolFocus Inc., a Palo Alto, Calif.-based developer of solar concentrator photovoltaic systems, has raised $47.5 million in Series C funding. Apex Venture Partners led the round, and was joined by return backers like New Enterprise Associates and NGEN Partners. It had previously raised nearly $100 million. The company also announced tha! t it has named president Mark Crowley as its new CEO.

Kolltan Pharmaceuticals Inc., a New Haven, Conn.-based developer of oncology therapeutics, has raised over $35 million in Series A funding. No investor information was disclosed. The company also named Michael Schmertzler, founder of Morgan Stanley’s biotech I-banking business, as CEO.

Vivaldi Biosciences Inc., a New York-based developer of influenza vaccines, has called down $18.85 million of a $23 million Series A round. Seed backers Bay City Capital and NGN Capital co-led the round, and were joined by New York City Investment Fund and Alexandria Real Estate Equities. The remaining capital can be called once certain milestones are met.

Digital Entertainment Corp. of America has raised $10 million in Series B funding, according to a regulatory filing. Rustic Canyon was joined by return backers Atomico, General Catalyst Partners and Mayfield. The Santa Monica, Calif.-based company was founded to actively identify, develop, finance, market, and distribute interactive entertainment concepts and properties across the Internet.

Ping Identity Corp., a Denver-based provider of Internet identity technology for enabling secure business collaboration, has raised $8 million in Series D funding, according to a regulatory filing. Listed backers include Draper Fisher Jurvetson, General Catalyst Partners and Fidelity Ventures. It had previously raised around $30 million, from the aforementioned firms, plus Appian Ventures, SAP Ventures and I-Vent.

Superprotonic, a Pasadena, Calif.-based marketer and commercializer of solid acid fuel cell technology developed by the company’s founders at CalTech, has raised over $8 million in Series C-1 funding, according to a regulatory filing. Backers include CMEA Ventures, OnPoint Technologies, Nth Power, StatoilHydro Ventures and U.S. Venture Partners.

Orth-Align, a Laguna Beach, Calif.-based developer of computer-assisted surgical tools, has raised $7.2 million in Series A funding co-led by Research Corp. Technologies and Okapi Venture Capital.

EverNote Corp., a Sunnyvale, Calif.-based provider of information capturing technologies, has raised $4.5 million in second-round funding from Troika Dialog. It had previously raised $6 million.

TestPlant, a UK-based maker of an automation and testing software product called Eggplant, has raised new funding from existing shareholder Seraphim Capital. It has now raised £1.5 million since last September.

Buyout Deals

Apollo Management, CVC Capital and First Reserve reportedly are among the possible bidders for Rio Tinto’s borates and talc units. Strategic buyers also are interested in the deal, which could be worth over $1 billion.

Industrial Growth Partners nearing a deal to buy O’Brien Corp., a St. Louis-based maker of heavy duty tubes and other heat exchange equipment used in the energy industry, according to a government filing.

Triton Pacific Capital Partners has acquired a majority interest in Dick’s Last Resort, a branded restaurant chain headquartered in Nashville, Tennessee. No financial terms were disclosed.

Abry Partners has acquired a minority stake in Gateway EDI Inc., a St. Louis-based provider of healthcare billing services to healthcare companies, according to LBO Wire. No financial terms were reported.

Arsenal Capital Partners has received EU regulatory approval for its acquisition of the special products business of Dutch chemicals company Royal DSM.

PE Exits

Coghead Inc., a Mountain View, Calif.-based provider of a Web-based application creation and delivery platform, is in talks to sell itself to an unidentified buyer, according to VentureWire. The move comes after Coghead failed to secu! re Series C funding. The company had previously raised capital from American Capital Strategies and El Dorado Ventures.

Novator has engaged Merrill Lynch to auction off Actavis, an Irish maker of generic drugs. The process could produce bids in the range of $6 billion.

Paymetric Inc., a Houston-based provider of payment card solutions, has sold its XiBuy solution to BizAps for an undisclosed amount. XiBuy is an SAP add-on solution for integrating and managing purchasing card transactions in SAP. Paymetric has raised over $11 million from Austin Ventures.

PE-Backed M&A

Author Solutions, a Bloomington, Ind.-based self-publishing company, has acquired Xlibris, a provider of print-on-demand self-publishing services. No financial terms were disclosed. Author Solutions is a portfolio company of Bertram Capital.

Oliver Medical LLC, a portfolio company of Mason Wells, has acquired TOLAS Healthcare Packaging, a maker of sterile-grade packaging. No financial terms were disclosed.

Sunquest Information Systems Inc., a Tucson, Ariz.-based provider of laboratory and diagnostic information systems, has acquired the Outreach Advantage unit of Pathology Associates Medical Laboratories. No financial terms were disclosed. Sunquest is a portfolio company of Vista Equity Partners.

Firms & Funds

Hispania Capital Partners has held a first close on over $105 million for its second fund, which is targeting between $150 million and $200 million. The Chicago-based firm focuses on lower-middle-market companies that provide goods and services to the Hispanic demographic in the U.S. and Puerto Rico.

Human Resources

BC Partners announced that chairman Jens Reidel has retired, effective immediately. He will be succeeded by Francesco Loredan and Raymond Svider, who will serve as co-chairman. In other BC Partners news, the firm said that it has hired Jonathan Hosgood away from Barclays Capital, in order to pursue debt market opportunities.

KPMG has named Honson To as regional head of private equity for the Asia-Pacific region. He has been a partner with KPMG China since 2003.

Trivest Partners has promoted Jorge Gross Jr. to principal. He had joined the firm as a vice president in 2006.