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Friday Feedback
The sun is shining, Danny Ainge is on the precipice of a giant blunder and I’m about to take my first vacation since last August. In other words, it’s time for some Friday Feedback.
The vast majority of email this week involved Tuesday’s column about the 51% Rule when it comes to awarding SBIR grants. A venture capitalist writes: “Our companies get a lot of SBIRs, and it is highly beneficial to the country that VC backed companies be able to compete for these (and the competition is fierce). As you noted, the research is generally oriented towards applications or extensions of importance to the government that the company would not otherwise pursue. Another critical subtlety is that the award of a phase 2 creates an implicit procurement authority for the government of the SBIR developed technology – this is a big deal.”
Someone affiliated with the SBIR program writes: “Note that the SBIR/VC issue goes way beyond NIH and life sciences alone. To be sure, the ‘ownership thing’ came up as a result of an NIH award that was challenged by a disgruntled grantee. But, if SBA comes down hard in favor of excluding ‘VC-controlled’ companies from the SBIR program, it will impact a significant portion of the American taxpayer’s $2 billion-federal SBIR early-stage investment in IT, Advanced Materials and Biotech (among others).”
Indeed, this is an important point that I neglected to mention. The SBIR program involves 11 different agencies, including NIH, Department of Defense, Department of Energy, National Science Foundation and the Environmental Protection Agency. While all of them technically are supposed to follow the 51% rule, the NIH is the only one known to be actively doing so. As such, life sciences companies are generally the only ones affected right now. The SBA oversees the entire SBIR program and officially endorses the 51% rule, but does not have any enforcement capabilities, which means that plenty of VC-controlled companies have gotten SBIR grants from places like DOD. If the ongoing forums and/or Congressional action lead to greater SBA oversight, however, this rule could begin to impact all sorts of companies. Again, go to the forums if you care about this issue (on either side).
*** Attorney Ken writes in on the issue of divorce affecting private equity partnerships: “Most well-drafted agreements would include a right to buy-out the spouse at a pre-determined price (or a price established via private, binding arbitration).The agreements typically provide that the buyout may be exercised in fairly short order and that the divorced spouse will haveno right to vote on GP or fund matters or inspect GP books and records at any time.”
*** Finally, tons of you wrote in to make light of my Paul Allen/Steve Allen mix-up. The best, however, came from Carlos, who suggested that my mistake may have been based more on looks, than on names. Check it out.
*** Publishing Note: I will be on vacation from next Monday until Monday, June 27. During that time I will not have regular access to email or voice mail (yup – an actual vacation). Please send all questions, compliments, complaints, tips, news items and spam to Adam.Reinebach@thomson.com. We’ll chat again when I return.
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Top Three |
eFunds Corp. (NYSE: EFD) has agreed to acquire WildCard Systems Inc., a Sunrise, Fla.-based provider of prepaid and stored value chain solutions to financial institutions, retailers and other payment issuers. The deal includes an initial payment of $228.8 million in cash (less a $22.8 million hold-back), plus a possible earn-out of up to $58.8 million. WildCard has raised over $75 million in VC funding since its 1995 inception, including a $14.5 million Series E round in 2001 at a post-money valuation of approximately $215 million. Company shareholders include Sutter Hill Ventures, GSC Partners, BA Venture Partners, First Data Corp. and Cleveland Pacific Equity Ventures. www.efunds.com www.wildsystems.com
Warburg Pincus is being sued for $650 million by founding shareholders of Irish telecom company QoS Networks Ltd., which went out of business in 2002. The plaintiffs allege that Warburg – the company’s controlling shareholder — breached its fiduciary duty to QoS, by preventing it from raising additional funding. Warburg told the Financial Times that the suit is “frivolous and without merit,” and also is counter-suing the founders for allegedly misleading the firm about QoS’ financial position. There also is a related $250 million punitive suit filed against Warburg by a group of QoS shareholders, although fellow private equity firm TowerBrook Capital Partners (f.k.a. Soros Private Equity) is not involved. www.warburgpincus.com
Keith Kalmus, a New York-area attorney known for representing cousin Daniel Pelosi in the murder of former KKR partner Ted Ammon, has been arraigned on drunken driven charges, following a deadly automobile accident Sunday afternoon in New York. The Suffolk County D.A. is expected to seek a vehicular manslaughter indictment against Kalmus, as the accident killed Eva Bertuccioli-Krapfenbaur of Belgium, and also seriously injured her sister-in-law Margot Krapfenbaur (on life support). Also injured in the crash were Bertuccioli-Krapfenbaur’s son, Claudio Bertuccioli, and his wife Rebecca McMillin. Claudio Bertuccioli is a principal with Rho Ventures, and already has been released from the hospital! .
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VC Deals |
HyperQuality Inc., a Seattle-based provider of monitoring services for customer care centers, has raised $5.5 million in Series A funding co-led by Miramar Venture Partners and Rustic Canyon Partners. www.hyperquality.com
Right Hemisphere Inc., a Fremont, Calif.-based provider of graphics management solutions, has raised $12 million in Series B funding, according to a regulatory filing. Sutter Hill Ventures was joined on the deal by such return backers as Sequoia Capital. www.righthemisphere.com
Blue Lane Technologies Inc., a Cupertino, Calif.-based network security company focused on fixing the problem of un-patched servers, has raised $13.32 million in Series B funding, according to a regulatory filing. Return backers include Benchmark Capital and Matrix Partners. www.bluelane.com
Nanosolar Inc., a Palo Alto, Calif.-based developer of flexible solar cells, reportedly has raised $20 million. Mohr, Davidow Ventures led the deal, and was joined by Mitsui & Co., OnPoint (VC arm of the U.S. Army) and return backer Benchmark Capital. It is unclear if existing Nanosolar shareholder U.S. Venture Partners also participated. www.nanosolar.com
Miasole, a San Jose, Calif.-based manufacturer of thin-film solar cells, has raised $16 million in Series B funding, according to SiliconBeat.com. Kleiner Perkins Caufield & Byers led the deal, and was joined by unnamed return backers. The company raised $5.4 million in first-round funding in early 2004 from VantagePoint Venture Partners, Firelake Strategic Technology Fund, Garage Technology Ventures and Nippon Kouatsu Electric Company. www.miasole.com
Centive Inc., a Burlington, Mass.-based provider of incentive compensation management solutions, has raised $10 million in new VC funding. Key Venture Partners led the deal, and was joined by return backers Polaris Venture Partners and VSP Capital. www.centive.com
Whale Communications Inc., a Fort Lee, N.J.-based SSL VPN vendor, has raised $6.5 million in new VC funding from return backers Goldman Sachs, Soros Fund Management and BRM Group. The company previously raised $23 million in 2000 at a post-money valuation of approximately $100 million. In other Whale Communications news, the company named Roger Pilc, former COO of software company SMARTS, as its new CEO. He replaces company founder Elad Baron, who will remain on Whale’s board of directors. www.whalecommunications.com
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Buyout Deals |
The Riverside Co. has acquired a 75% stake in Computer Press, a Czech Republic-based publisher of computer books and magazines in the Czech and Slovakian markets. www.cpress.cz
American Capital Strategies has acquired a 57% position in Unwired Technology LLC, a Plainview, N.Y.-based provider of wireless headphones for automotive entertainment systems. The deal is valued at $65 million, which takes the form of equity, a senior term loan, senior subordinated notes and junior subordinated notes. American Capital also is providing a revolving credit facility. Unwired CEO Lawrence Richenstein is rolling over a portion of his equity and will retain a significant ownership interest and continue to manage the company. www.americancapital.com www.unwiredtechnology.com
ABN Amro has received EU approval for its buyout of Denmark-based metal food packaging company Glud & Marstrand Invest AS, from Kirkibi AS, AscelAS and Nordea Pension. No financial terms have been disclosed.
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PE-Backed IPOs |
Silicon Motion Technology Corp., a Taiwan-based fabless semiconductor company focused on the multimedia consumer electronics market, has filed to raise $115 million via an IPO of American depository shares (ADS). It plans to trade on the Nasdaq under ticker symbol SIMO, with Deutsche Bank Securities serving as the offering’s lead underwriter. Shareholders include Concord Venture Capital Group, Capital Bright Investments, Smartinvest Consultants and Bewise Investments.
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PE-Backed M&A |
Oracle (Nasdaq: ORCL) Has agreed to acquire TimesTen Performance Software Inc., a Mountain View, Calif.-based provider of real-time data management software. No financial terms were disclosed for the deal, which is expected to close by the end of July. TimesTen has raised over $45 million in VC funding since its 1996 inception, from firms like Mayfield, Sippl Macdonald Ventures, Morgenthaler Ventures, Lightspeed Venture Partners, Intel Capital, Technology Crossover Ventures, ABS Ventures, BEA Systems, Hewlett-Packard and Tamir Fishman Ventures. www.oracle.com www.timesten.com
First Data Corp. (NYSE: FDC) has agreed to acquire EuroProcessing International from Reiten & Co. Capital Partners and Creati AS. No financial terms were disclosed. EuroProcessing International is Norway-based credit and debit card transaction processing company focused on Eastern Europe. www.europrocessing.no
CarsDirect.com Inc., a Culver City, Calif.-based operator of online car shopping services, has acquired 1-800 Communications Inc., a Hicksville, N.Y.-based provider of special finance auto leads to dealers. No financial terms were disclosed. CarsDirect has raised around $320 million of VC funding since its 1998 inception, from firms like MSD Capital, PC Partners, Clearstone Venture Partners, Foundation Capital, Goldman Sachs, TowerBrook Capital Partners, Rustic Canyon Ventures and JPMorgan Partners. www.carsdirect.com www.1800communications.com
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Firm & Fund News |
Oak Hill Capital Partners has closed on $1.9 billion in LP commitments for its second buyout fund, according to a regulatory filing. The Fort Worth, Texas-based firm is looking to raise upwards of $2.5 billion
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Human Resources |
Henry Simon, a special partner with Schroder Ventures Life Sciences, has been appointed non-executive chairman of Eyetech Pharmaceuticals Inc. (Nasdaq: EYET), where he has served as a director since July 2001. He replaces John McLaughlin, who resigned this week after Eyetech shares dipped nearly 50% on the news that a rival wet macular degeneration drug from Genentech had better-than-expected clinical results. www.eyetk.com
Roger Crandall has been named chief investment officer for Massachusetts Mutual Insurance Co., effective immediately. He replaces Stuart Reese, who was named MassMutual’s president and CEO last week. Crandall previously served as vice chairman, managing director and head of corporate securities for Babson Capital Management, a MassMutual investment management subsidiary. www.massmutual.com
John Vancura has been named vice president of business development for the private equity services division of The Bisys Group Inc. It is a newly-created position. www.bisys.com
David House has decided to retire from American Express Co., where he serves as group president of the Global Network and Establishment Services and Travelers Cheque and Prepaid Services Group. The move is effective later this year, at which point House plans to “devote more time to community service, working with venture capital startups and outside board and being with his family.” www.amex.com
THURSDAY, JUNE 9
Random Ramblings
*** In early April, this space reported that Summit Partners has launched simultaneous fund-raising efforts for both a late-stage/LBO fund (up to 50% control deals) and a venture capital fund (more downstream successor to the Summit Accelerator Fund). Specifically, I wrote that while the LBO fund would easily hit its $3 billion target, the VC one was “arguably a bit less certain.” It seems that I hit a bulls-eye in my first prediction, and missed the mark on the second.
Summit is going to easily raise both funds, and actually is more oversubscribed for its VC vehicle than for its LBO one, although the former is, admittedly, just one-tenth as large as the latter. The Boston-based firm held a first close in late May, and is expected to wrap everything up the week of June 20. It isn’t expected to accept more than the target capitalizations for either fund.
*** There are a couple of reports floating around the blogosphere that Mountain View, Calif.-based fuel cell company PolyFuel Inc. plans to price an IPO on London’s AIM exchange. Most of the attention to this deal so far focuses on the geography, but folks should be paying equal attention to the pricing (particularly those who don’t yet “believe” in the ROI potential of cleantech companies).
PolyFuel apparently is going to raise Gbp12 million, which would give it an enterprise value of around Gbp40 million, or approximately $73 million. It’s initial VC funding round provided a post-money valuation of just $13.2 million, while a $15.6 million infusion in 2002 was post-valued at $35 million (according to our VentureXpert database). That’s big money for first-round backer Mayfield, and also not to shabby for later players like Intel Capital and Chrysalix Energy. Not amazing, but better than decent for a company in this unchartered line of work.
*** I got tons of response to Tuesday’s column on SBIR funding regulations, and will run a bunch of them tomorrow. In the meantime, you should know that the SBA is seeking public testimony on the majority-owned issue during several forums, including: Today in Atlanta, June 14 in Denver, June 16 in NYC, June 17 in Washington DC, June 20 in Chicago, June 22 in Dallas, June 28 in San Francisco and June 29 in Los Angeles. Such meetings already have occurred in Seattle, St. Louis and Portland, Maine. More info available at www.sba.gov/size.
*** Two days ago I had lunch with someone who spends a lot of time dealing with troubled private equity firms. Most interesting observation (his, not mine)? That the number one factor in destroying a general partnership is not poor returns, macro economic factors or generational issues. Instead, it’s when one partner gets divorced. Apparently, partner divorce can open up a large can of worms, as the spouse often requests all sorts of sensitive financial info, such as the carrying values of portfolio companies. I wonder how many PE firms inquire about the state of a perspective partners’ marriage? Can you even do that without the candidate walking out? Tricky stuff.
*** Tomorrow we’ll have Friday Feedback, but I’ll be on a two-week break after that. But don’t fret, because your PE Week Wire will continue uninterrupted. The news will be taken care of by our crack staff in New York, while the column will be sometimes written by regular pinch-hitter Adam Reinebach (my boss), and sometimes written by some guest columnists I lined up. For spam purposes, however, it will continue to look like it’s coming from my inbox.
Random Ramblings
*** In early April, this space reported that Summit Partners has launched simultaneous fund-raising efforts for both a late-stage/LBO fund (up to 50% control deals) and a venture capital fund (more downstream successor to the Summit Accelerator Fund). Specifically, I wrote that while the LBO fund would easily hit its $3 billion target, the VC one was “arguably a bit less certain.” It seems that I hit a bulls-eye in my first prediction, and missed the mark on the second.
*** There are a couple of reports floating around the blogosphere that Mountain View, Calif.-based fuel cell company PolyFuel Inc. plans to price an IPO on
PolyFuel apparently is going to raise Gbp12 million, which would give it an enterprise value of around Gbp40 million, or approximately $73 million. It’s initial VC funding round provided a post-money valuation of just $13.2 million, while a $15.6 million infusion in 2002 was post-valued at $35 million (according to our VentureXpert database). That’s big money for first-round backer Mayfield, and also not to shabby for later players like Intel Capital and Chrysalix Energy. Not amazing, but better than decent for a company in this unchartered line of work.
*** I got tons of response to Tuesday’s column on SBIR funding regulations, and will run a bunch of them tomorrow. In the meantime, you should know that the SBA is seeking public testimony on the majority-owned issue during several forums, including: Today in Atlanta, June 14 in Denver, June 16 in NYC, June 17 in Washington DC, June 20 in Chicago, June 22 in Dallas, June 28 in San Francisco and June 29 in Los Angeles. Such meetings already have occurred in
*** Two days ago I had lunch with someone who spends a lot of time dealing with troubled private equity firms. Most interesting observation (his, not mine)? That the number one factor in destroying a general partnership is not poor returns, macro economic factors or generational issues. Instead, it’s when one partner gets divorced. Apparently, partner divorce can open up a large can of worms, as the spouse often requests all sorts of sensitive financial info, such as the carrying values of portfolio companies. I wonder how many PE firms inquire about the state of a perspective partners’ marriage? Can you even do that without the candidate walking out? Tricky stuff.
*** Tomorrow we’ll have Friday Feedback, but I’ll be on a two-week break after that. But don’t fret, because your PE Week Wire will continue uninterrupted. The news will be taken care of by our crack staff in
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Top Three |
Verus Pharmaceuticals Inc., a San Diego-based pediatric drug company, has raised $78 million in Series A funding. Domain Associates and Prospect Venture Partners co-led the deal, and were joined by Paul Royalty Fund, MPM Capital, Montreaux Equity Partners, Athenian Venture Partners and Windamere Venture Partners. In addition, the company received $20 million in product-specific royalty funding from Paul Royalty Fund. www.versuspharm.com
The Neiman Marcus Group Inc. (NYSE: NMG.A, NMG.B) has agreed to sell its private-label credit card accounts and related assets to HSBC Retail Services for approximately $640 million (including approx. $113 million in Neiman Marcus securitization liabilities). Neiman Marcus recently agreed to be acquired for around $5.1 billion by Texas Pacific Group and Warburg Pincus. It is unclear at press-time how the credit card sale will affect the overall buyout price.
Fonds de Reserve pour les Retraites (a.k.a. The French Pensions Reserve Fund), a state-owned system with nearly 20 billion euros under management, has hired London-based
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VC Deals |
PeptImmune Inc., a Cambridge, Mass.-based drug company focused on the rare skin disease pemphigus vulgaris, has raised $18.66 million in Series C funding, according to a regulatory filing. Return backers include New Enterprise Associates, Prism Venture Partners, Vanguard Ventures, and MPM Capital. The company raised $41.2 million in a 2003 funding round at a post-money valuation of approximately $55 million. Genzyme Corp., which spun out PeptImmune in 2003 (after having bought it from Zero Stage Capital in 1999), remains a company shareholder. www.peptimmune.com
Plethora Technology Inc., a Charles Town, West Va.-based provider of secure mobile computing platforms has raised $1 million in Series A funding. Participants include Mountaineer Capital ($500,000), West Virginia Jobs Fund Investment Trust Board ($250,000) and The Calvert Social Investment Funds ($250,000). Calvert had previously provided Plethora Technology with $400,000 in seed capital. www.plethoratech.com
Clear Shape Technologies Inc., a
Osiris Therapeutics Inc., a Baltimore-based biotech company focused on adult stem cell research, has raised $50 million in combined equity and convertible debt financing. According to VentureWire, the equity tranche consists of $10 million. www.osiristx.com
Sky Mobilemedia Inc., a San Diego-based maker of mobile application software platforms for wireless handsets, is raising $15 million in Series B funding, according to a regulatory filing. It already has secured $10.5 million from insiders like Enterprise Partners. www.skymobilemedia.com
Soma Networks Inc., a San Francisco-based provider of last-mile wireless solutions, has raised approximately $23.56 million in Series B preferred equity funding and $21.7 million in convertible note funding, according to a regulatory filing. No additional information was disclosed. www.somanetworks.com
NordNav Technologies, a
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Buyout Deals |
Mersey Docks & Harbour Co., a UK-based port operator, has confirmed that it will be acquired for Gbp771 million by Peel Ports Ltd.
GIMV and Maple Finance Group have agreed to sell Omnister Accessories NV to Sweden-based Thule Group for an undisclosed amount. Omnister is a Belgium-based supplier of European aftermarket accessories for recreational vehicles, was acquired by GIMV and Maple in 2001.
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PE-Backed IPOs |
NeuStar Inc., a Sterling, Va.-based provider of clearinghouse services to the North American telecom market, has set its proposed IPO terms to 25 million common shares being offered at between $18 and $20 per share. It plans to trade on the Nasdaq under ticker symbol NSTR, with Morgan Stanley, CSFB and JPMorgan serving as co-lead underwriters. NeuStar was founded in 1996 as an operating division of Lockheed Martin Corp., and was acquired in 1999 in a management buyout lead sponsored by Warburg Pincus. Warburg holds a 71.59% pre-IPO stake, while other significant shareholders include MidOcean Partners (13.95%) and ABS Capital Partners (5.93%). www.neustar.biz
KKR Financial Corp., a San Francisco-based real estate investment trust (REIT) managed by buyout firm Kohlberg Kravis Roberts & Co., has set its proposed IPO terms to around 29.17 common shares being offered at between $23 and $25 per share. The REIT had raised $780 million last year via a Rule 144A offering. www.kkr.com
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PE-Backed M&A |
Raritan Computer Inc., a Somerset, N.J.-based provider of products for managing IT infrastructure, has acquired defunct Oculan Systems Inc., a Raleigh, N.C.-based provider of server, network and desktop system health and security monitoring and management solutions for mid-sized enterprises. Oculan had raised $43 million in venture capital funding from TowerBrook Capital Partners (f.k.a. Soros Private Equity), TA Associates and W.R. Hambrecht & Co. www.raritan.com www.oculan.com
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Firm & Fund News |
Birch Hill Equity Partners, a standalone successor to TD Capital Canadian Private Equity Partners, is planning to close its latest fund at the end of this month with Cdn$750 million, according to The National Post. The vehicle will target middle-market companies based in
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Human Resources |
Marc Daniel has joined RBC Capital Markets as the senior New York-based managing director of mergers and acquisitions. He most recently served as a senior managing director with Bear Stearns & Co. www.rbccm.com
Larry Weeks has joined law firm Heller Ehrman White & McAuliffe as Of Counsel in the firm’s corporate securities, M&A and venture law group. He previously was a partner with Bingham McCutchen, and has brought with him clients like Redpoint Ventures, LoopNet Inc., Aprriso Corp. and Sabeus Inc. www.hellerehrman.com
WEDNESDAY, JUNE 8
Just Linking Around
A few links of note as I run downtown for a meeting:
*** There has been a lot of talk lately about the way that certain buyout firms share – or, in some cases, don’t share – certain transactional and monitoring fees. A big part of this focus was prompted by the excessive fees that TH Lee, Bain Capital and Providence Equity Partners took from the Warner Music piggybank, and how limited partners in Bain got less pro rata pop than did LPs in the other two funds. My take from this week’s edition of Buyouts.
*** More on VSP Capital, as firm founder Joanna Rees-Gallanter has confirmed the imminent shutdown of Fund III. It is worth pointing out, however, that this is far from the end of this ongoing saga. Next up? The possible battle for control of Fund II.
*** Paul Kedrosky takes on the wisdom of geography-focused shotgun investing. As a quick follow-on, it is worth noting that Paul’s criticism can be extended from the GP community into the LP community. It’s not a perfect translation, but a recent study by Harvard Business School Prof. Josh Lerner (the one discussed earlier in this space) points out that LPs with the most geographic focus have lower returns than do LPs with greater geographic diversity. His study doesn’t specify whether or not those LPs were using shotgun strategies, but there certainly are many examples of LPs who feel it’s wise – or at least good PR — to make lots of small bets in lots of local funds.
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Top Three |
Benchmark Capital Europe has agreed to acquire a 50% position in the North American Sports Network, a UK-based European television channel that broadcasts North American sporting events. No financial terms were disclosed for the deal, which follows a shareholder restructuring whereby Setanta Sport acquired co-founding investor Vulcan European Media Holdings’ 70% stake in NASN. Following the sale to Benchmark, Setanta Sport now holds a 50% stake. The transaction is subject to approval by the Irish Competition Authority. www.nasn.com
Atlantic Express Inc. (a.k.a. Eos Airlines), a Purchase, N.Y.-based airline startup serving transatlantic business travelers, has raised $85 million in total private equity funding. Golden Gate Capital led the deal, and was joined by Sutter Hill Ventures and Maveron. Eos also secured $100 million in lease financing, and plans to launch round-trip service from New York to London in the third quarter of this year. www.eosairlines.com
Semaphore, a Boston-based private equity management and business advisory, will announce tomorrow that it has been appointed to manage both the New York Community Investment Co. (NYCIC) and, in collaboration with the New York City Investment Fund (NYCIF), the New York State Business Venture Fund (NYSBVF). No financial terms have been disclosed. www.sema4usa.com www.nycic.com
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VC Deals |
Clovis Solutions Inc., a Petaluma, Calif.-based provider of system infrastructure software to the communications industry, has raised $11 million in Series B funding. New backers included Intel Capital, American River Ventures and Walden International, while return backer Sevin Rosen Funds also participated. Clovis previously raised $6 million in Series A funding at a pre-money valuation of approximately $4.6 million. www.clovissolutions.com
Pegasus Biologics Inc., an Irvine, Calif.-based medical device company focused on the repair of soft-tissue defects in orthopedic, spine and neurosurgery, has raised $10 million in Series B funding. Three Arch Partners and Frazier Healthcare Ventures co-led the deal, and were joined by Life Science Angel Investors. www.pegasusbiologics.com
Sports Potential Inc., a Menlo Park, Calif.-based sports sciences and educational services company, has raised $3.25 million in Series B funding. As with the company’s $1.2 million Series A round in November 2003, all participants were individual angel investors, including folks from Allen & Co., Hellman & Friedman LLC, Clayton, Dubillier & Rice, Thomas Weisel Partners, Oak Hill Venture Partners, DND Capital Partners, Three Arch Partners, TA Associates, Edgewater Funds, Idealab, Gilbert Global Equity Partners, Needham & Co., Bridger Capital, the Orlando Magic, Fair Isaac, 1-800-flowers.com, Capital Research, Spencer Stuart, CNET Networks, Siebel Systems, Electronic Arts, Giro, PalmOne and Mariner System Inc.’s Marsys. www.sportspotential.com
Metconnex Inc., an Ontario, Canada-based provider of wavelength selective switch modules for use in reconfigurable optical add/drop multiplexers, has raised Cdn$7.5 million in new private equity and debt funding. Return backers include Skypoint Capital, Vesbridge Partners, Innovacom and BDC Venture Capital, while Comerica also signed on as a new participant. www.metconnex.com
Pitronix Inc., a Wellesley, Mass.-based maker of optical displays for handheld devices, is raising $9 million in Series A funding, according to a regulatory filing. It already has secured at least $3 million, from backers like Kleiner Perkins Caufield & Byers and Atlas Ventures.
Crossbow Technology Inc., a San Jose, Calif.-based supplier of wireless sensor networks and inertial systems, has raised $12 million in new VC funding. Participants included Paladin Capital Group, Cisco Systems and return backer Intel Capital. www.xbow.com
IntelliVid Corp., a Cambridge, Mass.-based provider of video analysis solutions for retail loss prevention, has raised $4 million in new VC funding from Flagship Ventures, Egan-Managed Capital and DFJ New England. www.intellivid.com
AgraQuest Inc., a Davis, Calif.-based biotech company focused on natural pest management products, has raised $14.35 million in new VC funding. Texas Pacific Group and Halcyon Capital and return backer Otter Capital co-led the deal.
Dipsie Inc., a Chicago-based Internet search company, is raising $4 million in Series A funding, according to a regulatory filing. It already has secured $2 million, with Silicon Valley Innovation Co. listed as a beneficial owner. www.dipsie.com
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Buyout Deals |
Third Avenue Management had offered to buy the brokerage business of Instinet Group Inc. (Nasdaq: INGP) for $307 million, according to The Wall Street Journal. The price is nearly 50% higher than an already-agreed upon $207 million sale of the brokerage unit to Silver Lake Partners, which is slated to occur after The Nasdaq Stock Market completes its $1.9 buyout of Instinet from Reuters Group PLC. No word yet on Instinet’s response. www.instinet.com
Goldman Sachs Capital Partners has agreed to lead a consortium that will acquire a 55% stake in Japanese construction company Fujita Corp. The deal is valued at 41 billion yen (approx. $385 million), with Mori Trust also participating.
Meridian Venture Partners and Winston Partners have co-sponsored a recapitalization of Northern Contours Inc., a Fergus Falls, Minn.-based manufacturer of decorative laminate and veneer components for the home improvement market. No financial terms were disclosed. Goldsmith Agio Helms served as financial advisor to Northern Contours. www.northerncontours.com
CVC Capital Partners has acquired a 22% stake in postal service Post Danmark from the Danish government. The deal was valued at 1.27 billion Danish crowns, or approximately $210 million.
Apax Partners reportedly sold its 12% position in publicly-trade Italian fund management company Azimut Holding for approximately 86 million euros. www.azimut.it
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PE-Backed IPOs |
DSW Inc., a Columbus, Ohio-based discount shoe retailer, has set its proposed IPO terms to around 14.06 million common shares being offered at between $15 and $17 per share. The company plans to trade on the NYSE under ticker symbol DSW, with Lehman Brothers serving as lead underwriter. DSW is backed by both Cerberus and Back Bay Capital Funding. www.dswshoe.com
Lincoln Educational Services Corp., a N.J.-based provider of career-oriented, post-secondary education, has set its proposed IPO terms to four million common shares being offered at between $19 and $21 per share. It plans to trade on the Nasdaq under ticker symbol LINC, with Merrill Lynch serving as lead underwriter. Stonington Partners holds a 79.1% pre-IPO position in Lincoln Educational. www.lincolntech.com
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PE-Backed M&A |
IMS Health (NYSE: RX) has agreed to acquire PharMetrics Inc., a Watertown, Mass.-based provider of healthcare market insights. No financial terms were disclosed. PharMetrics has raised over $30 million in VC funding since its 1998 inception from firms like North Bridge Venture Partners, Mediphase Venture Partners and 3i Group. www.pharmetrics.com www.imshealth.com
FaceTime Communications Inc., a Foster City, Calif.-based provider of security solutions for the management and control of greynet applications, has acquired anti-sp*ware companies XBlock Systems LLC and Sp*wareGuide.com. No financial terms were disclosed. FacETime has raised over $75 million in total VC funding since its 1997 inception, from firms like TH Lee Putnam Ventures, Sutter Hill Ventures, BA Venture Partners and Mohr, Davidow Ventures. www.facetime.com
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Firm & Fund News |
The Washington StateInvestment Board (WSIB) next week will vote to appoint a new private equity consultant. The system’s Private Markets Group last week recommended that Capital Dynamics get the post, even through WSIB has used Pacific Corporate Group for the past five years. WSIB has made $15.27 billion in total private equity commitments (including a whopping $4.2 billion to KKR and KKR-related entities), and plans to commit another $6.5 billion over the next five years. www.sib.wa.gov
Greenhill & Co. (NYSE: GHL) has held an $875 million final close on its second private equity fund, Greenhill Capital Partners II. Approximately 26% of the commitments came from Greenhill employees, while the remainder came from institutional backers. The fund will focus on middle-market opportunities in the energy, financial services and telecom sectors. www.greenhill-co.com
Charlesbank Capital Partners has closed its sixth fund with $900 million in limited partner commitments. The Boston-based firm will continue to focus on middle-market management buyouts and growth capital financings in a variety of industry sectors. www.charlesbank.com
TUESDAY, JUNE 7
Federal Money for VC-Owned Companies?
A few weeks back, I attended the “Alternative Funding for Life Sciences” event co-sponsored by law firm Goodwin Procter and my corporate overlords at Thomson Financial. Lots of issues raised, but one in particular caught my attention: The debate over whether or not VC-controlled life sciences companies should be eligible for Small Business Innovation Research (SBIR) grants.
A bit of background for the uninitiated: SBIR grants are awarded by the National Institutes of Health, although the actual program is under the regulatory auspices of the Small Business Administration. As of the most recent documentation I can find, the awards for Phase I grants are up to $100,000 for six months of research, while awards for Phase II grants are up to $750,000 for two years of research. Historically, any life sciences company could apply for these grants, so long as they met certain size restrictions. For example, companies with more than 500 employees are ineligible, given the “small business” part of SBIR.
One other notable restriction was that a company must be majority-owned (>50%) by “individuals,” so as to avoid the unseemly prospect of big pharma creating subsidiaries that would artificially qualify as “small.” VC-owned firms had been considered “individuals” until a January 2001 ruling by an Administrative Law Judge that “individuals” must mean “natural persons.” In other words, VC firm-controlled companies no longer could get SBIR awards, so long as the VC funds are majority-backed by institutional investors (portfolio companies of Steve Allen’s Vulcan Ventures, however, would probably be eligible).
The SBA last year requested comment on this re-definition, and the majority of respondents opposed it. Legislators, however, failed to act (despite some rumblings that they would), and the SBA is once again requesting comment, and legislators like Brian Baird (D-WA) once again are talking about action (which the NVCA says might be more likely to actually transpire in a non-election year).
My initial reaction to the redefinition was to pull out my second-grade violin and begin playing the introduction to Twinkle Twinkle Little Star (the only song I ever learned). After all, why does a life sciences company need non-dilutive government funding if it already has majority ownership – and millions of dollars — from one or more venture capital firms? After a day of talking to various VCs, I’ve been spun around a bit. Here’s why:
SBIR grants, VCs say, are often awarded to companies for research efforts outside the scope of the actual venture capital funding. In other words, more experimental – or off-platform – stuff that certainly falls into the SBIR mission of stimulating technological innovation and using small businesses to both meet federal R&D needs and to help commercialize existing federal research. Fewer grants, less experimentation. This might not be a good argument for federal funding if we were discussing widgets – or even social networking companies – but we’re talking about innovations that could save people’s lives. We in America might not be able to figure out how to make drugs affordable like they have in Europe, or achieve universal healthcare like they have in Canada, but we’re pretty darn good at saving the lives of those who can afford it. And innovation is an essential part of maintaining that leadership.
It is, indeed, true that certain SBIR grants – were the rules relaxed – would end up helping certain VC firms make extra money. But that is the micro view. The macro view is that many SBIR-funded successes probably would prompt a flood of extra VC money into that space, thus creating a ripple effect. Again, added ultimate benefit to patients.
As such, I agree with groups like the NVCA that the SBIR grant eligibility regulations should be reinterpreted (again). It is worth noting, however, that I probably also would support a couple of caveats not endorsed by the NVCA. First, there probably should be some sort of means-testing for SBIR applicants. Rod Ferguson of JPMorgan Partners suggests it be a total VC funding cap, whereby a company that has raised more than $40 million or $50 million is ineligible. Arthur Klausner of A.M. Pappas & Associates also could support means-testing, although he feels it should be tied to cash on-hand. I’m not sure which is better – or perhaps a third way – but very rich companies simply don’t need non-dilutive government help to experiment.
Also, there is the issue of what to do with companies backed by corporate VC arms of big pharma companies like J&J and GlaxoSmithKline. These groups generally don’t have majority stakes on their own (usually part of a consortium), but the idea of SBIR money going to a portfolio company of S.R. One just seems kind of wrong, no matter how VC-focused the group may be. I don’t quite have an answer for this one yet, but am open to any and all suggestions.
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Top Three |
E.W. Scripps Co. (NYSE: SSP) has agreed to acquire Shopzilla Inc., a Los Angeles-based operator of an online comparison shopping search engine. The deal is valued at $525 million in cash, while existing Shopzilla shareholders also will receive the company’s net working capital at the time of closing, which is expected to be around $35 million. Shopzilla has raised approximately $75 million in venture capital funding since its 1996 inception, from firms like Allegis Capital, Attractor Investment Management, JPMorgan Partners, Mission Ventures, Harbourvest Partners, Westway Capital and Vignette Inc. www.scripps.com www.shopzilla.com
KRG Capital Partners has acquired Varel International, a Carrollton, Texas-based supplier of drill bits for the oil, gas and mining industries. The deal included $450 million in equity from KRG, plus an undisclosed amount of debt from Royal Bank of Scotland, Freeport Financial and Ares Capital Management. Sellers included 3i Group and the Universityof Texas Investment Management Co., while Simmons & Co. advised Varel on the deal. www.varelintl.com
FdG Associates, a New York-based private equity firm focused on the middle market, has closed its second fund with $310 million. Limited partners include JP Morgan Asset Management, the Ohio School Employees’ Retirement System and Mass Mutual Life Insurance Co. It had held a first close on $108.5 million in January 2004, and had been pitching the fund with a $300 million target. CSFB served as placement agent. www.fdgassociates.com
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VC Deals |
PC Guardian Technologies Inc., a San Rafael, Calif.-based provider of enterprise encryption software, has raised $6 million in Series A funding from Altos Ventures and Cardinal Venture Capital. SVB Alliant served as placement agent for the deal. www.pcguardiantechnologies.com
Approva Corp., a Vienna, Va.-based provider of enterprise controls management software, has received an undisclosed amount of Series C funding from Hyperion Solutions Corp. (Nasdaq: HYSL). www.approva.net
SiBeam Inc., a Danville, Calif.-based developer of RF CMOS semiconductors for the wireless industry, has raised $15 million in VC funding, according to a regulatory filing. Backers include Foundation Capital, New Enterprise Associates and U.S. Venture Partners. www.sibeam.com
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Buyout Deals |
Advent International has agreed to acquire the Boart Longyear Group from Anglo American PLC for approximately $545 million in cash. Boart Longyear is a South Africa-based supplier of drilling services, tools and equipment to the natural resource industry. www.boartlongyear.com
Goldman Sachs Capital Partners has received EU approval for its proposed acquisition of Euramax International Inc. from Citigroup Venture Capital. Euramax is a Norcross, Ga.-based maker of aluminum products. No financial terms have been disclosed, although the purchase price has been reported to be around $1 billion. www.euramax.com
Texas Pacific Group has received EU approval for its proposed Gbp668 million buyout of publicly-traded British Vita PLC, a UK-based furniture foam manufacturer. www.britishvita.com
Fortress Capital Group has completed its acquisition of Northbrook, Ill.-based newspaper publisher Liberty Group Publishing Inc. from Leonard Green & Partners for approximately $530 million. As part of the deal, Liberty CEO Ken Serota has stepped down, but will continue to serve as an occasional advisor. Also, Scott Champion and Randy Cope have been promoted to co-presidents and co-chief operating officers. www.liberty-group.com
ABN AMRO Capital has agreed to acquire a majority stake in Dutch textile services company Fortex BV from Industri Kapital and company management. Fortex will be combined with Netherlands-based Clean Lease Randstad, which ABN AMRO acquired in June 2004. No financial terms of either transaction has been disclosed. www.fortex.nl www.clr.nl
TSF Capital has sponsored a buyout of Geophysical Research Corp., a Tulsa, Okla.-based manufacturer of down-hole pressure and temperature gauges for the global oil and gas industry. Joining TSF on the deal are Council Oak (private equity arm of BancFirst) and MetaFund (Oklahoma City-based community development VC fund) and certain members of company management. No financial terms were disclosed,except that JPMorgan Chase provided a working capital facility. www.tsfcapital.com www.grcamerada.com
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PE-Backed IPOs |
Eagle Bulk Shipping Inc., a New York-based owner of dry bulk vessels, has set its proposed IPO terms to 13.25 million common shares being offered at between $16 and $18 per share. The company plans to trade on the Nasdaq under ticker symbol EGLE, with UBS and Bear Stearns lead underwriting the offering. Eagle Bulk Shipping is controlled by private equity firm Kelso & Co.
Kenexa Corp., a Wayne, Pa.-based provider of human capital recruitment and retention solutions, has set its proposed IPO terms to five million common shares being offered at between $14 and $16 per share. It plans to trade on the Nasdaq under ticker symbol KNXA, with SG Cowen serving as lead underwriter. Significant shareholders include Parthenon Capital (40% pre-IPO position), Wafra Partners (13.6%) and Westbury Partners (5.1%). www.kenexa.com
Novadaq Technologies Inc., an Ontario, Canada-based developer of a medical imaging system for the diagnosis and treatment of vascular and ophthalmic diseases, has filed to raise Cdn$25.175 million via an IPO of common stock at Cdn$9.50 per share. The company plans to trade on the Toronto Stock Exchange under ticker symbol NDQ. It has raised VC funding from such firms as Ventures West, H.I.G. Ventures and Lawrence & Co. www.novadaq.com
Bango.net Ltd., a UK-based developer of mobile infrastructure platforms, is planning to raise Gbp5 million via a flotation on the AIM. Current shareholders include Close Brothers Private Equity, Herald Ventures and ET Capital. www.bango.net
Deccan Aviation Ltd., an India-based discount airline operator, reportedly is considering a $300 million IPO that would value the company at between $1 billion and $1.2 billion. The company raised $40 million in a private equity funding round late last year led by ICICI Venture Funds Management, and may try pricing on both a New York and Bombay-based stock exchange within the next year.
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PE-Backed M&A |
THP Capstar Inc. has acquired DMX Music Inc., a Los Angeles-based provider of digital music and visual programming, from Liberty Media Corp. (NYSE: L) for $75 million. Earlier this year THP Capstar and DMX Music signed an asset purchase agreement for the sale of DMX MUSIC’s U.S. operations subject to a court-approved sale process. THP Capstar was the successful bidder in a Delaware auction conducted on May 9, and is an affiliate of Capstar Partners and Trinity Hunt Partners. Silver Point Finance provided an undisclosed amount of debt financing for the acquisition. www.dmxmusic.com www.capstarpartners.com
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Firm & Fund News |
Contango Capital Management, a Houston, Texas-based VC firm focused on alternative energy technologies, is raising its second fund with a $50 million target. Its inaugural vehicle closed this past January with $8.25 million. In other Contango Capital news, the firm has opened an office in Summit, N.J., and has added Rogers Herndon as a managing partner. Herndon previously was a managing director with Bank of America, where he helped launch the bank’s energy power trading business. He also was worked for PSEG Energy Resource & Trade, Enron Corp., Transcontinental Gas Pipe Line and Dynegy Inc. www.contangocapital.com
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Human Resources |
Kenny O’Keefe has joined Vestar Capital Partners as a senior advisor. He most recently served as president and chief operating officer of Clear Channel Communications Inc.‘s (NYSE: CCU) Radio division, and previously served as executive vice president and CFO of Vestar portfolio company Pyramid Communications Inc. (acquired by Evergreen Media in 1996). www.vestarcapital.com
Kim Clark has resigned from his position of dean of HarvardBusinessSchool, effective July 31. His new job will be as president of Brigham Young University-Idaho. HBS reportedly plans to name an interim dean, and then launch a search to find a permanent replacement. www.hbs.edu
Peter Stein has been named chief investment officer of the Universityof Chicago‘s $3.8 billion endowment, effective July 11. He currently serves as a managing director with Princeton University Investment Co., and replaces Phil Halpern resigned from the University of Chicago CIO spot last June. www.uchicago.edu
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Correction: Intel Capital should have been included as a participant in Black Duck Software’s $12 million Series B funding round.
MONDAY, JUNE 6
Monday Mouth-Off
The sky is gray, job growth is sluggish and I’m less than a week away from a much-needed (albeit perhaps not much-deserved) vacation. In other words, it’s time for some Monday Mouth-Off:
Jennifer writes in about VSP Capital: “As a woman who has been doing… venture capital since 1989, I am saddened by this event. We need great women VC role models. How is your readership reacting to this news? Apathy or concern?” The answer, Jennifer, is apathy and snickering (so many people rejoice in others’ failure), but you are not alone in pointing out how disappointing VSP Capital’s fate is from a gender representation perspective. VSP Capital was a real shining light in that regard, but its implosion and the reasons for it will only hurt a worthy cause.
A couple comments about whether or not the 11.65 billion euros acquisition of Italian telecom company Wind SpA should count as an LBO. As you might remember, Blackstone Group had been in the running, but lost out to a consortium led by Egyptian businessman Naguib Sawiris. Larry writes: “In my opinion, the determining factor is not whether the purchaser is a private equity fund. They key factors are: (1) Is the deal leveraged? (2) Is the acquirer a company, which would make it more of a merger than an LBO? Since the deal seems to be a leveraged acquisition by a consortium of individuals, in my opinion it would qualify as an LBO.” Jason adds: “I think that the semantic differences between LBOs and M&A are getting more and more blurred, and may not even exist in a few years time… particularly as the public and private markets continue to coalesce.” Then there is Sam, who simply says: “Private equity out (i.e. LBO) first requires private equity in (i.e. LP commitments). The Wind deal doesn’t qualify.
Finally, Glen writes: “Sweet note to the wife. If she is like mine, she finds what we do interminably boring.” Yes Glen, she does. So do almost all of my friends and family. This is why I follow sports and politics so closely, because I need some small talk that doesn’t begin with, “Today at work…
Oh, and one final Survey Reminder: Today is the last day to complete our bi-annual ACG/Thomson DealMakers Survey. It only takes a few minutes to fill out, and all respondents will be entered in a drawing to win incentives including an iPod, a Buyouts subscription, a pass to Buyouts Symposium West (Nov. 1-2 in San Francisco) and a subscription to Pratt’s Guide. Make sure you enter your PE Week Wire email account to take the survey, which you can find here.
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Top Three |
Somaxon Pharmaceuticals Inc., a San Diego-based drug company focused on insomnia and other neuro-psychiatric disorders, has raised $65 million in Series C funding. MPM Capital led the deal, and was joined by Prospect Ventures and return backers BA Venture Partners, Domain Associates, CDIB BioScience Ventures and Montreaux Equity Partners. The company now has raised approximately $90 million in total VC funding. www.somaxon.com
Adelphia Communications Corp. and ML Media Partners have agreed to sell their jointly-owned cable operations in San Juan, Puerto Rico to MidOcean Partners and Crestview Partners for $520 million. The system serves 137,000 customers. www.midoceanpartners.com
Berry Plastics Corp. of Evansville, Ind. has completed its acquisition of Kerr Group Inc., a Lancaster, Pa.-based maker of molded plastic packaging, for $445 million (including the repayment of existing indebtedness). Berry Plastics is controlled by Goldman Sachs Capital Partners and JPMorgan Partners, while Kerr Group had been owned by Fremont Partners since 1997. www.berryplastics.com www.kerrgroup.com
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VC Deals |
ZioPharm Inc., a Charlestown, Mass.-based drug company focused on oncology, has raised $18.1 million in Series A funding. No further information was disclosed, except that the deal was placed by Paramount BioCapital. www.ziopharm.com
Voltaire Inc., a Billerica, Mass.-based provider of inter-connect solutions for grid computing, has raised $15 million. New backers included Baker Capital, Pitango Venture Capital, Vertex Venture Capital and Brocade co-founder Paul Bonderson, while return backers included Platinum Venture Capital, Tamir Fishman Ventures and The Challenge Fund. www.voltaire.com
PortAuthority Technologies Inc. (f.k.a. Vidius), a Palo Alto, Calif.-based provider of enterprise security software, has raised $13.4 million in Series C funding. Greylock and Sequoia Capital co-led the deal, and were joined by Lexington Ventures. www.vidius.com
Black Duck Software Inc., a Waltham, Mass.-based provider of software compliance management solutions, has raised $12 million in Series B funding. Fidelity Ventures led the round, and was joined by SAP Ventures and return backers Flagship Ventures, General Catalyst Partners and Red Hat. Dave Power, a general partner with Fidelity Ventures, will join the Black Duck board of directors. www.blackducksoftware.com
SentitO Networks Inc., a Rockville, Md.-based provider of VoIP switching equipment and service delivery solutions, has raised approximately $10 million in Series D funding. Backers include Mid-Atlantic Venture Capital Funds, Core Capital Partners, Kodiak Venture Partners, Columbus Nova Investments and Technology Venture Partners. www.sentito.com
Metagenics Inc., a San Clemente, Calif.-based provider of medical foods and nutra-cueticals to healthcare professionals, has received $11 million in private funding from Bison Capital Structured Equity Partners. www.metagenics.com
SocialText Inc., a Palo Alto, Calif.-based developer of wiki-based social networking software, has raised $3.1 million in VC funding. Draper Fisher Jurvetson led the deal, and was joined by the Omidyar Network. Socialtext previously raised approximately $600,000 in seed-stage funding. www.socialtext.com
Leverage Software Inc., a San Francisco-based provider of solutions to improve customer acquisition and loyalty, has raised $2.1 million in Series A funding. Backers include Halsey Minor and his OnDemand Venture Capital Fund, plus financial services entrepreneur John Stanton. www.leveragesoftware.com
Zenprise Inc., a Fremont, Calif.-based provider of enterprise service management software, has raised $11 million in Series B funding. Shasta Ventures led the deal, and was joined by return backers Bay Partners and Mayfield. The company has raised $17 million in total VC funding, including a $6 million Series A round in early 2004 at a post-money valuation of approximately $11.7 million. www.zenprise.com
Tehuti Networks Ltd., an Israel-based semiconductor company focused on TCP/IP acceleration processing for enterprise IT environments, has raised $4.2 million in Series A funding. Alice Ventures led the deal, and was joined by return backers Alice Lab and ProSeed Venture Capital Fund. www.tehutinetworks.com
VXL Instruments Ltd., a UK-based maker of Windows-based terminals and thin client devices, has raised just under $2 million in VC funding from Indian computer and chemical distribution company Priya Ltd. www.vxl.net
Optosecurity Inc., a Quebec City-based developer of security products for the automated detection of weapons or explosives in airline cargo or luggage, has raised Cdn$2.4 million in first-round funding. The Business Development Bank of Canada led the deal, and was joined by Innovatech Quebec and several unnamed individuals. www.optosecurity.com
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Buyout Deals |
CVC Capital Partners has agreed to sell Hong Kong-based Asia Printing Holdings Ltd. to R.R. Donnelley & Sons. Co.(NYSE: RRD) for approximately $95 million in cash. The deal is expected to close later this summer.
The Boss Group has sponsored a recapitalization of H.D. Griffin Construction Company Inc., a Carrollton, Mo.-based builder of pipelines for natural gas and other petroleum products. No financial terms were disclosed. RSM EquiCo Capital Markets served as financial advisor to H.D. Griffin. www.bossgroup.com
Montagu Private Equity reportedly has agreed to sell Marlow Foods Ltd. to publicly-traded Premier Foods for Gbp172 million. Marlow is a UK-based maker of the Quorn brand of food products. www.marlowfoods.com
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PE-Backed IPOs |
VistaPrint Ltd., a Bermuda-based holding company for Lexington, Mass.-based graphic design and printing services provider VistaPrint USA Inc., has filed to raise $120 million via an IPO of common stock. It plans to trade on the Nasdaq under ticker symbol VPRT, with Goldman Sachs and Bear Stearns serving as lead underwriters. The company has raised around $76 million in total VC funding since its 1995 inception, with significant shareholders including Highland Capital Partners, HarbourVest Partners, SPEF Ventures, Sofinnova Partners and Window to Wall Street Inc. www.vistaprint.com
Texas Genco Inc., a Houston, Texas-based wholesale electric power generation company, has filed to raise $600 million via an IPO of common stock. Goldman Sachs will serve as lead underwriter. Texas Genco is controlled by Blackstone Group, Hellman & Friedman, Kohlberg, Kravis Roberts & Co. and Texas Pacific Group. Each of those firms holds a 24.8% pre-IPO position. www.txgenco.com
Simmons Co., an Atlanta-based maker of branded bedding products, has withdrawn its registration for a $345 million IPO, due to “market conditions” and “strategic reasons.” It had originally filed in June 2004, and was acquired in November 2003 by Thomas H. Lee Partners from Fenway Partners for approximately $1.1 billion. Fenway is still listed as a significant shareholder. www.simmons.com
Builders FirstSource Inc., a Dallas-based provider of building products to professional homebuilders, has set its IPO terms at 11.25 million shares being offered at between $15 and $17 per share. The company is controlled by private equity firm JLL Partners, which plans to sell approximately 3.69 million shares during the IPO. www.buildersfirstsource.com
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PE-Backed M&A |
Swisscom Solutions AG has agreed to acquire Celeris AG, a Switzerland-based provider of secure Internet communication solutions. No financial terms were disclosed. Celeris has received VC funding from Armada Venture Group, BCAP AG and Innoventure Capital (an affiliate of CSFB). www.celeris.ch
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Firm & Fund News |
Global Vision AG Private Equity Partners of Germany is one month away from holding a final close on its sixth fund-of-funds, but already has made commitments to the following vehicles: Wellington Partners Ventures III, TVM Life Science Venture VI and Grainville Baird Capital Partners Fund VII. www.globalvision-ag.com
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Human Resources |
MPM Capital has promoted principals Ashley Dombkowski, Steven St. Peter and Ilan Zipkin to the position of general partner. Dombrowski joined MPM in 2000 from Tiger Management LLC, St. Peter joined in 2003 after spending time with both Apax Partners and The Carlyle Group and Zipkin came to MPM in 2000 from BioCentury Publications, where he served as science editor. www.mpmcapital.com
Stephen Ko, an associate with The Blackstone Group, has been elected to the board of Foundation Coal Holdings Inc. (NYSE: FCL). He replaces Blackstone’s Joshua Astrof, who resigned. www.foundationcoal.com
Nick Morrill and Paul Cartwright have been appointed managing partners of Rutland Partners, a UK-based turnaround firm. They replace Chris Dowling, who is reducing his time to future Rutland fund activities in order to pursue other, unspecified, interests. www.rutlandpartners.com
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Correction: The auction for South Korean distillery Jinro Ltd. was run by Merrill Lynch, not Goldman Sachs.
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