PE Week Wire, Jan. 10, 2007

Golden Gate Capital is running low on dry powder in its $1.8 billion second fund, and is hitting up LPs for a $600 million bridge vehicle (as first reported yesterday by LBO Wire). Why raise a small amount of interim capital instead of just raising Fund III? Because sources say that Golden Gate is going to need some extra time to convince LPs that they should participate in an evergreen fund structure going forward (as not reported yesterday by LBO Wire).

Evergreen structures are highly-unusual in the private equity market, with General Atlantic being the only large firm I know of to employ them. In fact, a number of experienced, non-GGC LPs I spoke with yesterday didn’t even know how they really work. That was too bad, because such an explanation was exactly the reason for my call.

But, thankfully, I was able to secure a quick primer from General Atlantic managing director Tom Tinsley. He explains that limited partners (or “capital partners” in GA parlance) commit to General Atlantic at a time of their choosing, so long as the firm agrees to accept them. Right now, most GA money comes from family offices that have committed a minimum of $100 million. The firm then begins deploying the capital, and goes back to its capital partners for additional capacity when needed. For example, General Atlantic last year raised its capital capacity from just under $4 billion to exactly $5 billion, with a little more than half of the increase coming from existing capital partners.

Each new capital partner is permitted to negotiate its own economic terms. But if a capital partner joins in 2003 at more LP-friendly terms than did an LP who joined in 2001, the revised terms will apply going forward to all LPs on an MFN (more funding needed) basis.

The primary upsides of evergreen funds are firm stability and added flexibility in making forward-looking investments in talent and geography. On the flipside, evergreen funds don’t provide as much standardized accountability as to traditional fund structures, and also can be administrative nightmares for the general partner. For example, imagine having to calculate individual clawbacks for each LP, because each of them bought in at a different time.

Golden Gate did not return a request for comment. Just for clarification, the $1.8 billion vehicle was raised in 2004, and actually is a general fund plus a sidecar fund.

*** Rufus Rivers has left The Carlyle Group, where he had been co-head of the firm’s mezzanine group. He now is with The RLJ Companies, the Carlyle-affiliated financial group run by BET founder Bob Johnson.

*** Yesterday I gave you a sneak peak at the ACG/Thomson DealMakers Survey results. Now you can get both the press release and underlying data.

*** Quiz Time: Can you name the former Pacific Corporate Group pro who just agreed to join Altius Associates? And no, it’s not Mike Russell (we’re looking for an unannounced hire)?

Top Three

Genstar Capital has agreed to acquire International Aluminum Corp. (NYSE: IAL) for $228 million. IAC is a Monterey Park, Calif.-based manufacturer of residential and commercial aluminum building materials. Under terms of the agreement, IAC shareholders will receive $53 per share.

TransDigm Group Inc. (NYSE: TDG) has agreed to acquire Aviation Technologies Inc. from Odyssey Investment Partners for approximately $430 million in cash. ATI is a Seattle-based provider of products to the commercial and military aerospace markets, including flight deck and passenger audio systems, cabin lighting displays and brushless motors.

Quantum Energy Partners, a Houston-based private equity firm focused on the energy sector, has closed its fourth fund with $1.32 billion in capital commitments. Champlain Advisors served as placement agent.

VC Deals

BRA Transporteos Aereos, a Brazilian charter airline, has raised $25.2 million in private equity funding from Darby Overseas.

Althea Technologies Inc., a San Diego-based provider of technologies and services for pharmaceutical development and manufacturing, has raised $23 million in Series C funding from Telegraph Hill Partners.

AsicAhead NV, a Hasselt, Belgium-based provider of mobile RF integrated circuits for the WiMAX market, has raised $10 million in Series B funding. Capital-E led the deal, and was joined by return backers LRM, SHF and Allegro.

Nimsoft, a Redwood City, Calif.-based provider of service-level management solutions, has raised $10.3 million from JMI Equity and Northzone Ventures. It is the company’s first round of institutional funding, despite having been founded in1998.

Enclarity Inc., an Aliso Viejo, Calif.-based information management and analytic software company focused on the healthcare market, has raised $10 million in Series B funding. Bain Capital Ventures led the deal, and was joined by return backer Ignition Partners.

Camiant Inc., a Marlborough, Mass.-based provider of policy servers for IP-based multimedia services, has raised $8.1 million in Series C funding from return backers like Matrix Partners and North Bridge Venture Partners.

Adventure Central, a Denver-based provider of online booking and travel inventory management services for adventure tour operators, has raised $3.5 million in Series B funding. Allegis Capital led the deal, and was joined by return backers Wolf Ventures and Advantage Capital Partners.

Frantic Films, a Winnipeg, Canada-based visual effects, film and television production company, has raised Cnd$5 million in VC funding from Priveq Capital Funds. The proceeds will be used to fund the growth of all Frantic’s divisions through acquisitions and investment in current operations.

Mobango, a London-based operator of an online and mobile community for cell phone enthusiasts, has raised Euro 2 million in first-round funding from Doughty Hanson Technology Ventures.

RF Nano Corp., an Orange County, Calif.-based developer of radio frequency devices, has raised $1.5 million in Series A funding from Okapi Ventures of Laguna Beach. The company is commercializing technology developed at UC Irvine that is designed to change the way real world signals are manipulated and processed.

BioStorage Technology Inc., an Indianapolis-based provider of biomaterial storage, has received an undisclosed amount of VC funding from Spring Mill Venture Partners. The company previously had raised just over $5 million from Radius Ventures and Twilight Venture Partners.

Targanta Therapeutics Inc. (f.k.a. PhageTech), a Cambridge, Mass.-based developer of antibacterial agents, is nearing a $50 million Series C deal, according to comments made by company CEO Mark Leuchtenberger during this week’s J.P. Morgan Healthcare Conference.

Buyout Deals

Rockwood Holdings Inc. (NYSE: ROC) has completed the sale of its 78.6% position in Groupe Novasep subsidiary to Gilde Buyout Partners, Banexi Capital and Groupe Novasep management (which held the remaining 21.4%). The deal was valued at approximately Euro425 million. Groupe Novasep is a France-based provider of technologies and ingredients to the life sciences and specialty chemical markets.

Onex Healthcare Holdings, a subsidiary of Onex Corp. (TSX: OCX), has agreed to acquire the Health Group of Eastman Kodak Co. (NYSE: EK). The deal includes $2.35 billion in cash at closing, plus up to $200 million in possible milestone payments. Kodak’s Health Group provides molecular imaging systems, medical and dental imaging, including digital x-ray capture, medical printers and x-ray film.

Blue Sage Capital has sponsored a management-led buyout of The Primus Sterilizer Co., an Omaha, Neb.-based maker of steam sterilizing equipment for the healthcare, laboratory, pharmaceutical and animal care markets. No financial terms were disclosed.

ISIS Equity Partners has sponsored a management buyout of Anglo Irish Trust Company Ltd., an Isle of Man-based provider of offshore trust and company administration services to high net worth individuals, from Anglo Irish Bank PLC. The deal valued AITCL at Gbp33 million, and included Gbp13 million from ISIS.

Palladium Equity Partners has completed a $58.3 recapitalization of portfolio company Prince Mineral Holdings Corp., a producer of mineral-based colorants and additives. Patriot Capital Funding provided $23.3 million of junior secured debt and senior subordinated debt. Bank of America and Merrill Lynch Capital each provided $17.5 million of senior debt.

PE-Backed IPOs

GSI Technology Inc., a Santa Clara, Calif.-based provider of static random access memory products for networking and telecom equipment, has filed for a $57.5 million IPO. It plans to trade on the Nasdaq under ticker symbol GSIT, with Needham & Co. and WR Hambrecht & Co. serving as co-lead underwriters. Shareholders include Monet Capital. GSI had filed for a $103.5 million IPO in 2004, but withdrew its registration later that year.

PE-Backed M&A

Corrigo Inc., a Wilsonville, Ore.-based provider of on-demand service management solutions, has acquired Aligo Inc., a San Francisco–based provider of mobile field service and service management solutions. No financial terms were disclosed. Corrigo has raised over $41 million in VC funding since its 1999 inception, from firms like Asset Management Co., Sierra Ventures, Sycamore Ventures and Staenberg Venture Partners. has raised over $30 million in VC funding since its 1999 inception, from firms like Dolphin Equity Partners, Motorola Ventures, RBC Capital Partners and Thomas Weisel Venture Partners.

The Qualicaps Group, a global supplier of capsules and capsule filling and sealing equipment, has agreed to acquire Pharmaphil Inc., an Ontario, Canada-based manufacturer of empty gelatin capsules. No financial terms were disclosed. Qualicaps is a portfolio company of The Carlyle Group.

PE Exits

3i Group has agreed to sell Nordic Modular, a Swedish maker of modules for temporary buildings, to Kungsleden AB for approximately Euro 100 million.

AmbironTrustWave, a Chicago-based provider of data security and compliance management solutions for the payment card industry, has acquired SecurePipe, a Lincolnshire, Ill.-based managed security provider. No financial terms were disclosed. SecurePipe had raised nearly $14 million in VC funding from firms like The Argentum Group, First Analysis Corp. and Prism Capital.

Volution Holdings Ltd., a UK-based portfolio company of ABN Amro Capital, has sold its Cable Management Group to Lloyds TSB Development Capital for an undisclosed amount.

PIPE Deals

WisdomTree Investments Inc. (Pink Sheets: WSDT.PK), a New York-based developer of weighted indexes and ETFs, has raised $56 million in PIPE funding led by Atlantic Pacific Capital and AIG Global Investment Group.

Firms & Funds

Monomoy Capital Partners has closed its inaugural turnaround fund with $280 million in capital commitments. Limited partners include Drum Capital, Bear Stearns Asset Management, Horizon 21 (formerly Swiss Re), Oppenheimer & Co., St. Paul-Travelers, and Morgan Creek Capital. MVision Private Equity Advisors served as placement agent.

Access Capital Partners of Paris has closed its third European mid-market buyouts fund-of-funds with Euro 307 million in capital commitments.

Adams Capital Management of Sewickley, Pa. is raising $300 million for its fourth early-stage VC fund, according to VentureWire. Fund-raising is expected to wrap up by early summer.

CMEA Ventures is targeting $400 million for its seventh fund, according to Private Equity Insider.

Dawntreader Ventures (f.k.a. Soundview Ventures) is targeting $250 million for its third early-stage fund, according to Private Equity Insider.

Robert W. Baird & Co. has launched a corporate restructuring I-banking group that will provide equity and debt financing and M&A advisory services to financially-distressed mid-market companies, as they seek to reorganize. It will be led by William Welnhofer, formerly a principal with Starshak Welnhofer & Co.

Human Resources

Mark Austin has joined Piper Jaffray as a managing director of the firm’s Private Capital team. He previously was a managing director with FAF Advisors.

Tamara Elias has joined Essex Woodlands Health Ventures as a New York-based principal. She previously focused on the pharmaceuticals market at McKinsey & Co., and received her M.D. from Johns Hopkins.

TA Associates has promoted five principals to managing director. They are: Jeffrey Barber, Michael Berk, Todd Crockett, Jonathan Meeks and Ajit Nedungadi. The firm also has promoted: CFO Thomas Alter from director to principal, Christian Grüenwald from vice president to principal, Jon Kossow from vice president to principal, Jennifer McAuliffe Mulloy from vice president to principal, Vivian Wu from vice president to principal, Harry Taylor from vice president to senior vice president and Roberto Ramirez from controller to vice president of finance.

RedShift Ventures has promoted Srinivas Mirmira from associate to principal. He joined the firm in March 2005, before which he spent time with Boeing, Applied Materials and Intel.