PE Week Wire: Mon., April 14, 2008

Having a minor plumbing nightmare here at the home office, so:

*** Longtime readers will remember the copious amounts this space has given to VSP Capital, a San Francisco-based venture firm that basically imploded back in 2005. There were a bunch of back-and-forth lawsuits, with the final one being settled quite recently. I’ve got a lengthy wrap-up over at peHUB, while VSP founder Joanna Rees has responded in the comment section. Not being a shrinking violet myself, I’ve responded to her response. Aren’t blogs fun…

*** The Economist has a new piece on how private equity might be the missing piece to solve the credit crunch. Great minds think alike. Whole thing reminds me of an old Homer Simpson line, so long as you substitute “private equity” for “alcohol.” By doing so we get: “Private Equity: The cause of – and solution to – all of life’s problems.”

*** Speaking of which: We suspected that Citi wouldn’t be the only bank packaging leveraged loans for sale to private equity firms. WSJ reports that Deutsche is next.

*** The Clear Channel banks have lost another round in their battle to get out of funding the buyout.

*** peHUB first Read, including downloadable Q1 VC fundraising data.

Top Three

RGB Networks, a Sunnyvale, Calif.-based provider of network video processing solutions, has raised $20 million in fourth-round funding at a $200 million post-money valuation. Institutional Venture Partners led the round, and was joined by return backers Accel Partners, Comcast Interactive Capital, Kleiner Perkins Caufield & Byers and Focus Ventures. RGB had previously raised over $32 million, including a Series C round in June 2006 at a $110 million post-money valuation.

Codexis Inc., a Redwood City, Calif.-based provider of solutions for pharma chemical process development and manufacturing, has filed for a $100 million IPO. It plans to trade on the Nasdaq under ticker symbol CDXS, with Credit Suisse and Goldman Sachs serving as co-lead underwriters. Codexis has raised just over $80 million in VC funding since 2002, from firms like CCTV Investments, CMEA Ventures, Pequot Capital, Bio*One Capital and Pfizer.

John Sinik has quit as UBS AG’s head of global leveraged finance, in order to join the London office of Towerbrook Capital Partners. UBS has not yet named a replacement. Towerbrook is in the midst of raising $2.5 billion for its latest fund.

VC Deals

Dash Navigation Inc., a Mountain View, Calif.-based provider of Internet-connected automotive GPS devices, has called down $30.2 million of a $35 million Series C round, according to a regulatory filing.Return backers includeCrescendo Ventures, Kleiner Perkins Caufield & Byers, Sequoia Capital, Skymoon Ventures and ZenShin Capital Partners.

ONStor Inc., a Campbell, Calif.-based provider of clustered NAS storage solutions for the enterprise, has called down $14.88 million of a $25 million Series F round, according to a regulatory filing. Return backers include Foundation Capital, Velocity Interactive Group (f.k.a. ComVentures), Mayfield and Worldview Technology Partners. ONStor had previously raised around $115 million since 2001.

OLX Inc., a Craigslist clone that focuses on free online classifieds focused on markets outside the U.S., has raised $13.5 million in second-round funding. Backers include General Catalyst Partners, Bessemer Venture Partners, Founders Fund and DN Capital.

Arbel Medical Ltd., an Israeli developer of a medical device that uses low temperatures to remove benign breast tumors, has raised $3.5 million in Series B funding. Giza Venture Capital and Ofer Hi-Tech co-led the round, with said Bridge Investment Fund also participating.

Buyout Deals

Dubai International Capital has abandoned its attempts to buy Liverpool Football Club. The team is currently owned by Tom Hicks and George Gillett, and is being advised by Merrill Lynch.

Greenfield Partners has agreed to acquire Clayton Holdings Inc. (Nasdaq: CLAY), a Shelton, Conn.-based provider of analytics, specialty consulting and outsourced services like due diligence and surveillance. The deal is valued at approximately $134 million, with Clayton stockholders to receive $6 per share (24% premium to Friday’s closing price). That figure does not include repayment of $23.8 million in debt. Banc of America Securities is advising Clayton.

PE-Backed IPOs

Fluidigm Corp., a South San Francisco-based provider of integrated fluidic circuits for the life sciences market, has filed for an $86.25 million IPO. It plans to trade on the Nasdaq under ticker symbol FLDM, with Morgan Stanley serving as lead underwriter. Fluidigm has raised nearly $200 million in total VC funding since 1999, from firms like Bio*One Capital (13.49%), Versant Ventures (8.83%), EuclidSR Partners (7.35%), InterWest Partners (5.67%), Alloy Ventures (5.6%) and Lilly Ventures.

Ferretti, an Italian luxury yacht company, reportedly plans to float in Milan later this year. This would be a return to the public markets for Ferretti, which is currently owned by Candover (60%) and Permira (9.5%). An IPO could value the company at around €3 billion.

PE Exits

Farecast Inc., a Seattle-based developer of data mining techniques to predict prices in the travel industry, has been sold for $75 million, according to The Seattle Post-Intelligencer. No buyer was named. Farecast has raised just over $20 million in VC funding, from firms like Madrona Venture Group, Greylock Partners, Pinnacle Ventures, Sutter Hill Ventures and WRF Group.

Navigation Capital Partners has sold its position in Physicians Endoscopy LLC to an undisclosed financial buyer, as part of a management-led recapitalization. No financial terms were disclosed. Physicians Endoscopy is a Doylestown, Pa.-based company that partners with gastrointestinal physicians to develop endoscopic ambulatory surgery centers. Edgeview Partners advised Navigation and Physicians Endoscopy on the sale.

Parker Hannifin Corp. (NYSE: PH) has acquired Vansco Electronics from Kilmer Capital Partners and Borealis Private Equity. No financial terms were disclosed, except that Vansco had 2007 sales of approximately $180 million. Vansco is a Canadian maker of electronic controls, sensors, displays, terminals, communication and operator interfaces.

Radio One Inc. has paid $38 million to acquire Community Connect Inc., a New York-based operator of ethnicity-focused social networks. The deal was valued at $38 million, with Rothschild advising Radio One and Bear Stearns advising Community Connect. Community Connect had raised VC funding from firms like Comcast Interactive Capital, Dominion Ventures, ConnectCapital and Jump Ventures.

PE-Backed M&A

Bezier, a European in-store marketing company, has acquired UK-basedCoutts Retail Communications. No financial terms were disclosed. Bezier is a portfolio company of MidOcean Partners.

CCC Information Services, a Chicago-based portfolio company of Investcorp, has agreed to merge with Mitchell International Inc., a San Diego-based portfolio company of aurora Capital Group. The $1.4 billion transaction will create a combined company with annual revenue of around $460 million and approximately 2,000 employees. It will provide information, workflow management systems and integrated software to insurance companies and collision repair facilities.

Truphone, a UK-based VOIP company, has acquired the business assets of UK SIM card maker SIM4Travel. The sale price includes £1.343 million in cash and £1.3 million in Truphone shares. Truphone has raised over $24 million in VC funding from firms like Eden Ventures and Wellington Partners Venture Capital.

Firms & Funds

Dubai International Capital and First Eastern Investment Group have formed a $1 billion private equity fund that will invest in Chinese companies seeking growth opportunities in the UAE and the potential to float on Dubai securities markets.

Interwest Partners will soon begin raising its tenth fund with a $650 million target, according to VentureWire. The venture firm first disclosed the plan to LPs during its annual meeting earlier this year, and plans to begun formal fundraising in late July or early August. Interwest raised $606 million for its ninth fund in 2004.

Thoma Bravo, a Chicago-based private equity firm focused on mid-market software opportunities, has held a $520 million first close on its ninth fund and has reduced the overall target from $1 billion to $800 million, according to LBO Wire.

Human Resources

David Verey has stepped down as non-executive chairman of The Blackstone Group’s UK operations. He joined Blackstone in April 2003 after having served as chairman of Lazard, and become non-executive UK chairman two years later. Dow Jones is reporting that the position will be abolished.