Last October, BA Capital Partners Europe announced that it had spun out from parent company Bank of America, and renamed itself Argan Capital. Now it’s BA Venture Partners’ turn.
The Foster City, Calif.-based group will announce later today that it has become Scale Venture Partners, and that Bank of America has transitioned into a minority limited partner role on a $400 million fund that closed in 2005 (it previously had been the sole backer). The remaining LP stakes have been purchased by undisclosed institutions, with Probitas Partners serving as placement agent.
None of this is terribly surprising, particularly given that BA Venture Partners did not have any real strategic relationship to the parent bank. It didn’t invest exclusively in financial services-related companies, did not receive exclusive research and worked with a variety of I-banks for its transactional needs (including BA, of course). Moreover, BA has been promoting a synergistic “universal” strategy – so such a split was both inevitable and amicable.
The name Scale Venture Partners was chosen for a few reasons, including the notion that the group searches for markets of scale (i.e., at growth inflection points). But, beyond the name change and LP roster, don’t expect any changes. The same management team is in place, while its investment strategy will continue to focus on “development-stage” technology and healthcare companies.
*** Speaking of captive bank VC groups going independent, Key Venture Partners has added a third managing director. He’s John Ward, who previously had been a partner with M/C Venture Partners. Expect a formal announcement within the next week. Key had begun soliciting third-party commitments last year for a new fund, but temporarily shelved the effort with expectations that it would return to market early this year.
*** On the very day that I began the latest Internship Rodeo, Guy Kawasaki posted a “VC Aptitude Test” to his blog. It’s obviously an interactive test, but the gist is that VC is not for the young and (relatively) inexperienced. In other words, most current MBA candidates need not apply.
The VCAT has sparked lots of blogosphere debate, including a recent post from current Wharton student Greg Neichin: http://perpetualmotion.wordpress.com/2006/12/29/why-guy-is-mostly-right-but-increasingly-wrong/
Greg uses the pageview data from our Internship Rodeo to argue (correctly) that most PE-inclines MBA candidates already are eschewing venture capital for later-stage and/or buyout investing. His concludes: “I see this as good news for the venture capital sector as hopefully it will allow Guy and others to be fielding more higher quality inquiries from job seekers. The faster that these candidates flock away from venture capital, the wronger Guy will become and the less antagonistic he will need to be towards the young people clogging his inbox.”
*** My colleagues at Buyouts Magazine are putting the finishing touches on their latest issue, which will include a vast smorgasbord of 2006 data and analysis. In the meantime, they’ve sent over a few tasty nuggets.
First up is disclosed LBO deal volume, which comes in at $314.78 billion for 316 transactions (including leverage). There also were 691 deals with undisclosed values (both sets of figures only include closed deals with at least one U.S.-based equity sponsor). For comparison, there were 392 buyouts with disclosed values in 2005 — of a total of 852 – for a total of $199.59 billion. Moving on to fund-raising, 334 U.S.-based LBO and mezzanine firms raised around $197.56 billion, which is up slightly from the $183.8 billion raised in 2005.
Charts are available at www.peHUB.com, as are some New Year’s Resolutions from Alexis Lakes, discussion of a new VC round for TechDirt, a new Day at @Ventures and yesterday’s best email. As always, peHUB.com is updated throughout the day with fresh news and analysis.
Top Three
Plastic Logic Ltd., a Cambridge, UK-based plastic electronics manufacturer, has raised $100 million in fourth-round funding. Oak Investment Partners and Tudor Investment Corp. co-led the deal, and was joined by return backers Amadeus, Intel Capital, Bank of America, BASF Venture Capital, Quest for Growth and Merifin Capital. The capital will be used to help build a factory to manufacture plastic electronics on a commercial scale, and the round is likely to be expanded by a small percentage. www.plasticlogic.com
EGL Inc. (Nasdaq: EAGL), a Houston–based freight forwarding company, has received a $36 per share buyout offer from CEO James Crane and private equity firm General Atlantic. The overall transaction would value EGL at approximately $1.2 billion. Crane currently holds an 18% stake, while EGL shares closed trading at $29.78 per share on December 29. www.eaglegl.com
Hank Barry has joined law firm Howard Rice as a director in the Business Department and the IP Counseling & Transactions Group. He previously was a partner with Hummer Winblad Venture Partners and, in behalf of HWVP, served as CEO of Napster Inc. He previously had been a partner with Wilson Sonsini Goodrich & Rosati. www.howardrice.com
VC Deals
Apriori Technologies Inc., a Concord, Mass.-based provider of cost management software for the discrete manufacturing industry, has raised $11.18 million in Series B funding, according to a regulatory filing. Return backers include Bain Capital Ventures and Sigma Partners. www.apriori.com
TutorVista, a San Francisaco-based provider of online tutoring and test preparation, has raised $10.75 million in Series B funding. Lightspeed Venture Partners led the deal with a $7 million contribution, while return backers included Sequoia Capital India and Silicon Valley Bank. www.tutorvista.com
Amazon.com has invested $10 million into Wikia Inc., the for-profit wiki site founded by Wikipedia founder Jimmy Wales. News of the deal was first reported last month, but the actual dollar amount had been kept confidential. Wikia previously had raised $4 million in Series A funding earlier from Bessemer Venture Partners, Omidyar Network and individual investors like Marc Andreessen, Josh Kopelman, Joichi Ito, Mitch Kapor and Ron Conway. www.amazon.com www.wikia.com
Newmerix Corp., a Superior, Colo.-based provider of automated testing and change management software for packaged applications, has raised $7 million in third-round funding. Return backers include Mobius Venture Capital, Siemens Venture Capital and IDG Ventures. www.newmerix.com
Chipidea, a Lisbon, Portugal-based provider of analog and mixed-signal semiconductor solutions, has raised Euro 5 million in Series C funding from Espirito Santo Ventures. www.chipidea.com
DefenSoft Planning Systems, an Israel-based developer of software solutions for planning defense and security systems, has sold a 15% ownership stake to private equity firm Athlone Global Security Inc. The deal also includes an option whereby Athlone could acquire an additional 5 percent. www.defensoft.com www.athloneglobalsecurity.com
Buyout Deals
PNC Equity Partners has acquired Hilsinger Holdings Inc. from ICV Capital Partners and Palladium Equity Partners. No financial terms were disclosed. Hilsinger Holdings is a Plainville, Mass.-based provider of eyewear and eye care accessory products and supplies in the U.S. and U.K. It was advised on the sale by Harris Williams & Co. www.hilco.com
3i Group has agreed to acquire Dockwise Transport NV, a Dutch heavy transportation company, from Dutch offshore services company Heerema Group and Norwegian maritime group Wilh Wilhelmsen. The deal is valued at over $700 million. www.3i.com www.dockwise.com
Avista Capital Partners has agreed to acquire the assets of Phillips Investment Resources LLC, a Rockville, Md.-based provider of subscription-based investment advice, from Phillips International Inc. No financial terms were disclosed. www.avistacap.com www.phillips.com
Deutsche Post AG has agreed to sell its waste disposal unit Vfw AG to Monitor Clipper Partners for an undisclosed amount. www.monitorclipper.com
Lone Star Funds has agreed to sell restaurant chain Shoney’s to Royal Capital for an undisclosed amount. Lone Star had agreed to sell Shoney’s last year to Centrum Properties, but the deal later fell through and got mired in litigation.
Apple Hospitality Two Inc., a REIT focused on the upscale, extended-stay suite segment of the hotel industry, has entered into an exclusive talks to be acquired by ING Clarion Partners. The exclusivity period will last until February 2. www.applehospitality.com www.ingclarion.com
Pyramid Breweries Inc. (Nasdaq: PMID) has sold the Thomas Kemper Soda brand to Adventure Funds of Portland, Oregon. The deal includes a $3.1 million cash payment, plus a five-year agreement under which Pyramid will continue to manufacture Thomas Kemper Soda at its breweries. www.pyramidbrew.com
Beecken Petty O’Keefe & Co. has acquired Tidi Products from Fidelity Capital Investors, according to LBOWire. Tidi Products is a Neenah, Wis.-based maker of disposable dental and medical products. www.tidiproducts.com
Oak Hill Capital Partners has agreed to buy Radiotherapy Clinics of Georgia from company founder Frank Critz, according to LBOWire. RCG operates seven outpatient radiotherapy centers for the treatment of prostate cancer. www.prostrcision.com
PE-Backed M&A
Swett & Crawford, an Atlanta-based wholesale insurance broker, has acquired the assets of Oxbridge Insurance Associates Inc., a Morristown, N.J.-based property and casualty wholesale broker and managing general agent. Swett & Crawford is owned by its employees, HM Capital Partners and Banc of America Capital Investors. www.swett.com
DTN Information Services, an Omaha, Neb.-based provider of information services for the agricultural and energy markets, has acquired The Progressive Farmer magazine from Time Inc. No financial terms were disclosed. DTN is a portfolio company of Veronis Suhler Stevenson. www.dtn.com
Healthy Foods Holdings, a portfolio company of Catterton Partners, has agreed to acquire CoolBrands Dairy Inc., maker of yogurt products under the Breyers and Creme Savers brands, from CoolBrands International Inc. (TSX: COB.A). No financial terms were disclosed. www.cpequity.com
Hanley Wood Inc., a Washington, D.C.–based B2B media company serving the residential and commercial construction markets, has acquired PRO AV magazine from Ascend Media. No financial terms were disclosed. Hanley Wood is owned by CCMP Capital (f.k.a. JPMorgan Partners), while Ascend Media is backed by CCMP and Veronis Suhler Stevenson. www.hanley-wood.com www.proavmagazine.com
Elder Health Inc., a Baltimore-based provider of health coverage for the elderly, has agreed to acquire Health Partners’ senior partners Medicare line of business in Philadelphia and surrounding counties. No financial terms were disclosed. Elder Health last year raised $52.5 million in private funding from firms like New Enterprise Associates. www.elderhealth.com
PE Exits
Amdocs (NYSE: DOX) has agreed to acquire SigValue Technologies Inc., an Israel–based provider of real-time billing and network solutions that support converged prepaid and postpaid voice, messaging and data/content services. Amdocs already owns a 14% stake, and will pay approximately $54 million in cash for the remaining 86 percent. Other SigValue shareholders include Holland Ventures and AIG Orion Venture Capital. www.amdocs.com www.sigvalue.com
Browster Inc., a San Francisco-based provider of a browser preview plug-in, is shutting down, according to GigaOm. Company shareholders included Advanced Technology Ventures, First Round Capital, Vanguard Ventures, John Zeisler (Gabriel Venture Partners), Robert Simon (Alta Partners), Rick Magnuson (former Menlo Ventures partner) and Ken Sawyer (Saints VC).
Firms & Funds
ProQuest Investments has closed its fourth fund with $425 million in capital commitments. The firm focuses on venture capital opportunities in the healthcare space, and has offices in Princeton, N.J., San Diego and Montreal. www.proquestvc.com
GSC Group of Florham, Park, N.J. has closed its third distressed debt fund with $530 million in capital commitments. www.gsc.com
Human Resources
Nick Harvey has joined Cambridge, Mass-based drug company Radius Health Inc. as a senior vice president and chief financial officer. He previously was a managing director with VC firm Shiprock Capital. In related news, Venturewire quotes Harvey as saying that Shiprock is winding down and does not plan to make any new investments. Its initial fund was capped at around $20 million, with its only limited partner being the family of senior managing director Richard Shipley (parents founded electronics materials firm Shipley Co.). www.radius.com www.shiprock.com
Mark Barry has joined OpenView Venture Partners as a venture partner. He has spent the past 15 years with Microsoft in various positions. Most recently, he was a founder and managing director of the Microsoft Emerging Business Unit. www.openviewpartners.com
Rick Prostko has joined VantagePoint Venture Partners as a vice president. He previously was an associate with Summit Partners. www.vpvp.com
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