PE Week Wire, Jan. 31, 2007

As I sat outside in the home office hot-tub last night, I got to thinking about a bunch of improvements I’d like to make to both the PE Week Wire and (which I really view as sister products, at this point). Everything from expanded personalization options to worthy widgets to better leveraging our LinkedIn community to partnerships with other content providers. Then I began getting loopy on bromine fumes, which seemed like a good time to return inside for an evening of additional lethargy.

I tell you this not for the mental image (goodness no), but rather because I’m devoting the rest of today to brainstorming new ideas and would like your help.

What types of information, functionality, etc. would make the Wire and peHUB more worthwhile to you? Maybe it’s something extensive that would ultimately require a fee – or perhaps it’s something simple that would take me just an extra minute per day. Maybe it’s a current feature that you find to be a waste of reading time. I’d like to hear it all, since your opinions are the only ones that ultimately matter.

Just send me an email (you can hit reply to this one). Or, you can post a relevant comment online. In the meantime…

*** Not that you necessarily want to read two whitepapers in two days, but there is an interesting one out of Berkeley on VC liquidation preferences. Specifically, it discusses ways for VC-backed entrepreneurs to increase their chances of liquidation preference “carveouts,” and conversely how VCs can take preemptive steps to avoid them (such as incorporating the company in Delaware rather than in California).

Quiz Time 1: What U.S. mid-market buyout shop is prepping its first European fund? Hint: It’s based in the Southeast, and a co-founder will relocate to London.

Quiz Time 2: What mega-buyout firm spent the weekend getting tacit shareholder approval for a public-to-private deal that would dwarf Equity Office in terms of size? Hint: The deal would likely involve the spinout or sale of a key biz unit that was recently augmented.

Top Three

ElkCorp (NYSE: ELK), Dallas-based roofing and building products company, has deemed a $43.50 per share offer from Building Materials Corp. of America to be superior to a $42 per share offer from The Carlyle Group. It has given Carlyle five days to raise its bid, or else it will accept the BMCA bid and pay Carlyle a $29 million termination fee.

Veronis Suhler Stevenson has agreed to buy Natick, Mass.-based educational publisher Cambium Learning from J.H. Whitney & Co. for more than $300 million.

Farecast Inc., a Seattle-based developer of data mining techniques to predict prices in the travel industry, has raised $12.1 million in Series C funding, as first reported yesterday at Sutter Hill Ventures led the deal, and was joined by PAR Capital Management, Pinnacle Ventures, former Expedia CEO Erik Blachford and return backers Madrona Venture Group, Greylock Partners and WRF Capital.

VC Deals

ETF Securities Ltd., a San Francisco-based developer of exchange-traded commodities (ETCs), has raised $10 million from FTVentures. It is the company’s first round of institutional funding.

TeraOp Displays, a Tel Aviv, Israel-based maker of personal projection devices, has raised $7 million in first-round funding from BlueRun Ventures and Carmel Ventures.

6th Sense Analytics, a Morrisville, N.C.-based provider of software development metrics, has raised $5 million in Series A funding. Core Capital led the deal, and was joined by return backer Intersouth Partners (which led a $1.7 million seed round in 2004).

DARTdevices Corp., a Mountain View, Calif.-based developer of software for consumer devices, has raised Series A funding from Motorola Ventures. No financial terms were disclosed, but a regulatory filing indicates that the deal was worth around $3.5 million and closed in April 2006. The company’s software allows multiple consumer devices to directly access the combined content and applications of any DART-enabled device such as mobile phones and PCs.

Quick Study Radiology, a St. Louis-based provider of advanced radiology services to small community hospitals, has raised $3.3 million in Series D funding. Advantage Capital Partners led the deal, and was joined by return backers Fletcher Spaght Ventures, Eagle River and Mantic Investments.

Vizu Corp., a San Francisco-based provider of do-it-yourself online opinion polling and market research, has raised $2.9 million in new VC funding. Draper Fisher Jurvetson led the deal with a $1.5 million infusion.

TextDigger, a San Jose, Calif.-based provider of online semantic search services, has raised $1.5 million in funding from CNet, according to alarm:clock.

Buyout Deals

Behrman Capital has acquired Peacock Engineering Co., a Geneva, Ill.-based provider of outsourced food packaging services to consumer products companies. The deal is valued at $172.5 million. Giuliani Capital Advisors advised Peacock on the deal, while leverage was provided by Bank of Ireland, Madison Capital Funding and Citigroup Mezzanine Partners.

The Carlyle Group has agreed to acquire Philosophy Inc., a Phoenix–based maker of personal care products in the skin care, bath & body care, fragrances and color cosmetics spaces. No financial terms were disclosed.

Doughty Hanson is among the bidders for Aston Martin, the auto brand being sold off by Ford Motor Co., according to The Financial Times. Others include property tycoon Simon Halabi, Canadian car parts group Magna and Australian media magnate James Packer. The deal is expected to generate around Gbp450 million.

Tonka Bay Equity Partners has acquired Circuit Check Inc., a Maple Grove, Minn.-based maker of interfaces to test mission-critical printed circuit board assemblies. No financial terms were disclosed.

Norwest Equity Partners has sponsored the second recapitalization of Imperial Supplies LLC, a Green Bay, Wis.-based distributor of maintenance products to fleet and related industries. The proceeds from this second recapitalization, similar to the first one completed in February 2005, will provide a distribution for the company’s shareholders and funding for continued growth initiatives.

Inverness Capital Partners has acquired ElectriTek AVT Inc., a Newton Square, Pa.-based maker of battery assemblies and chargers, according to LBO Wire. No financial terms were disclosed.

PE-Backed IPOs

Animal Health International Inc., a Westlake, Texas-based distributor of animal health products, priced 11.8 million common shares at $11 per share ($10-$12 range), for an IPO take of approximately $129.8 million. It will trade on the Nasdaq under ticker symbol AHII, while JPMorgan served as lead underwriter. Charlesbank Capital Partners bought the company from Bain Capital in 2005, and held a 76.4% pre-IPO position.

PE Exits

Global IP Solutions (f.k.a. Global IP Sound) of San Francisco has acquired CrystalVoice Corp., a Santa Barbara, Calif.-based provider of quality-of service-software for VoIP solutions. No financial terms were disclosed. Global IP Solutions has raised capital from Kistefos Venture Capital, while CrystalVoice had raised just over $2 million in VC funding from firms like DFJ Frontier.

PE-Backed M&A

Deep Nines Inc., a Dallas, Texas-based provider of network security solutions, has acquired Captus Networks Inc., a San Jose, Calif.–based provider of inline, policy-based intrusion prevention systems for securing and managing mission-critical IP networks. No financial terms were disclosed. Deep Nines has raised around $16 million in VC funding from firms like Dawntreader Ventures, EFO Holdings and Insight Venture Partners. Captus had raised around $43 million in funding since its 2000 inception (press release says just $25m), from firms like Celerity Partners, GMG Capital Partners, HIG Capital and St. Paul Venture Capital.

John Maneely Co., a portfolio company of The Carlyle Group, has agreed to acquire Sharon Tube Co., a Sharon, Pa.–based manufacturer of welded steel pipe, mechanical tubing, seamless pressure pipe, and value-added products for a broad range of commercial and industrial applications. No financial terms were disclosed for the deal, which will close later this quarter.

Firms & Funds

The Pennsylvania Public School Employees’ Retirement Board has approved the following fund commitments: $300 million to New Mountain Partners III ($3 billion target); $100 million to Navis Asia Fund V ($750 million target); Euro 75 million for Greenpark International Investors III (Euro 300 million target); $50 million to StarVest Partners II ($200 million target); and $400 million to Blackstone Real Estate Partners VI.

MidOcean Partners has held secured $750 million in capital commitments for its second fund since spinning out of Deutsche Bank in 2002, according to LBO Wire. A regulatory filing from last August indicated a first close on approximately $588 million. The fund is being marketed with a $1 billion target and $1.25 billion hard cap.

Paul Capital Partners has completed its buyout of SGC Partners I, a North American private equity portfolio of Societe Generale. Societe Generale has retained a minority interest in the portfolio’s new fund. The new fund will be managed by the existing team — named Cowen Capital Partners — and will operate as a subsidiary of the newly independent and public Cowen Group Inc.

Human Resources

David Lee and Robert Davis have joined Mayer, Brown, Rowe & Maw LLP as Chicago-based partners in the firm’s private equity practice. They previously were with Kaye Scholer and, before that, with Kirkland and Ellis.

Meb Soman has joined Actis as head of the private equity firm’s oil and gas practice. He previously was a managing director with oil and gas corporate finance advisory boutique Harrison Lovegrove & Co.

Atlas Venture has promoted Marc Oiknine to principal. He joined the firm’s Paris office in 2004 as an associate, and works with portfolio companies like DailyMotion, Sporever, Jaluna and RealEyes3D.

Summit Partners has made four promotions: Craig Frances to general partner; J.J. Kardwell to principal; Han Sikkens to vice president; and Joan Miller to chief marketing officer.