PE Week Wire: Mon., Dec. 3, 2007

The 5th Annual Internship Rodeo has begun, and first-year MBA candidates can view the first dozen postings over at the MBA Forum of peHUB. The rest will be in the system by 1pm (we have over 70 firms participating). If your firm wants to post a listing, but has not yet let me know, I will accept new ones until midnight tomorrow. After that, you’ll have to wait for our Desperate Interns Drive in May. Good luck to everyone who applies…

*** Tom Perkins and John Doerr don’t see eye-to-eye on the global warming issue, according to an interview with Perkins in the new issue of Venture Capital Journal. The Kleiner Perkins co-founder and namesake says: “I’m not a Holocaust denier. I’m not saying climate doesn’t change. … We perhaps only differ as to the degree of mankind’s responsibility for the acknowledged warming. I am not quite sure that it’s 100 percent.”

VCJ editor Larry Aragon wants to be a fly on the wall at Kleiner Perkins’ next LP meeting, when Perkins rubs shoulders with Al Gore. He also wants your suggestions for how the conversation would go. Post them here.

*** Spark Capital has done away with non-compete clauses for its portfolio company employees. As Spark partner Bijan Sabet wrote on his blog, this is the “right thing to do.” Both Fred Wilson and Rick Segal are in opposition. Let me know your thoughts, and I’ll do some compilation.

*** The American Enterprise Institute has posted audio and video of the Private Equity forum it held last week, which included preliminary results of a study that found buyout shops destroy more jobs than they create.

*** peHUB First Read.

*** Let’s all welcome Michael Grossman of RSM McGladrey to Vox Populi. His debut post makes the case for the middle-markets.

*** Veteran Vox Popper Jeff Bussgang on helping portfolio companies formulate their 2008 plans.

Top Three

Houghton Mifflin Co. has agreed to sell its college unit to Cengage Learning for $750 million in cash. The acquisition is being partially funded by Apax Partners and OMERS, which acquired Cengage (f.k.a. Thomson Learning) earlier this year for around $7.75 billion.

Providence Equity Partners has agreed to invest over $200 million into Volia Cable, a Ukranian cable television and Internet access provider that is controlled by private equity firm SigmaBleyzer. The deal is expected to close later this month. Goldman Sachs International and UBS served as financial advisors to SigmaBleyzer, while Lazard advised Providence.

Six Apart Ltd., a San Francisco-based provider of blogging software and services, is selling its LiveJournal platform to Russian media company SUP. No financial terms were disclosed, although the Kommersant business daily in Russia places the price-tag at around $30 million. SUP already had been running LiveJournal in Russia as part of a licensing agreement, but now will create an American company – LifeJournal Inc. – to manage and operate LiveJournal globally. Six Apart has raised around $22 million in VC funding from August Capital, Focus Ventures and Intel Capital.

VC Deals

Merrimack Pharmaceuticals Inc., a Cambridge, Mass.-based drug company focused on autoimmune diseases and cancer, has secured $35 million of an $80 million Series F round, according to a regulatory filing. No investor information was listed. In other company news, Robert Gay has joined the board of directors. Gay is a former managing director with Bain Capital, who currently is part of a new private equity firm nearing a final close on its debut fund.

Consorte Media Inc., a San Francisco-based provider of marketing services to the Spanish-speaking market, has raised $7 million in Series B funding. Sutter Hill Ventures led the round, and was joined by return backer Mayfield Fund. The company raised a $3.2 million Series A round late last year from Mayfield and Band of Angels.

ForHealth Technologies Inc., a Daytona Beach, Fla.-based developer of automation systems for hospital pharmacies, has raised $4 million in new VC funding. Return backers include New Enterprise Associates, National Healthcare Services, Red River Ventures and Chisholm Private Capital. ForHealth also secured $5 million in venture capital financing from Square 1 Bank., a New York-based provider of private online storage for file-sharing, has raised $1.25 million in Series A funding led by RRE Ventures.

Bio*One Capital and Qiagen (Nasdaq: QGEN) have entered a joint venture to establish Dx Assays Pte Ltd., a Singapore-based center for assay development in which molecular diagnostics for infectious and genetic diseases will be developed. The center is expected to be fully operational by early 2008 and employ more than 30 scientists. No financial terms were disclosed.

Decipher Inc., a Fresno, Calif.-based provider of online survey software, has raised an undisclosed amount of VC funding from DCA Capital Partners.

Selltis LLC, a New Orleans-based provider of on-demand CRM software for end-to-end sales process automation, has raised an undisclosed amount of VC funding from Advantage Capital Partners and Enhanced Capital Partners.

VC investment activity in India over the first nine months of 2007 is nearly 5x higher than was such activity in the first nine months of 2006, according to new data from Dow Jones VentureOne and Ernst & Young. .

Buyout Deals

ABRY Partners has completed its acquisition of Gould & Lamb from H.I.G. Capital. No financial terms were disclosed. G&L is a Bradenton, Fla.-based insurance services firm that focuses on complex medical claims and regulatory compliance.

Clear Channel Communications received FCC approval for its planned $1.3 billion sale of 35 television stations to an entity controlled by Providence Equity Partners. There have been press reports that Providence has been souring on the deal, which is being done independently of Clear Channel’s own take-private buyout.

Close Brothers Private Equity has sold Fisher Holdings to Bank of Scotland Integrated Finance for £40 million. Fisher is a Scotland-based supplier of linen textile services to the hospitality, healthcare and leisure sectors. Close Brothers had invested £9 million into Fisher, as part of a £23 million management buyout in 2004.

FdG Associates has sponsored a recapitalization of both A&R Transport and Alliance Logistics. No financial terms were disclosed for the deal, which will result in a single company known as A&R Logistics. A&R Transport is a Morris, Ill.-based provider of bulk transportation, packaging, distribution and logistics. Alliance Logistics is an Elgin, Ill.-based non-asset based transportation management services provider.

Gresham Private Equity has sponsored a management buyout of 7city Group Ltd., a UK-based provider of training services to financial institutions. No financial terms were disclosed for the deal, which included leveraged financing from The Bank of Scotland.

H.I.G. Capital has completed its acquisition of Flight Options LLC from Raytheon Co. (NYSE: RTN) for an undisclosed amount. Flight Options is a Cleveland-based private jet aviation company that operates a fleet of 130 luxury aircraft for businesses and high-net-worth clients.

Sun Capital Partners has pulled out of a planned acquisition of Ft. Lauderdale, Fla.-based International Bedding, as first reported by Furniture Today. The deal was originally announced back in May as a completed deal, but apparently was only an agreement. No explanation was provided. In related news, International Bedding has retained Mesirow Financial to explore strategic options.

Windstream Corp. (NYSE: WIN), the company formed by the combination of Alltel Corp.’s fixed-line phone unit and Valor Communications Group Inc., has completed the sale of its telephone directories publishing business to Welsh, Carson, Anderson & Stowe for an enterprise value of $525 million.

PE Exits

EDS (NYSE: EDS) has completed its acquisition of a 93% stake in Saber Holdings Inc. from sellers like majority shareholder Accel-KKR, for approximately $420 million in cash. Saber provides software and services to U.S. state governments, and its CEO and COOretained the other 7 percent.

E-Mul Technologies, a Yavne, Israel-based maker of particle detection and field emission components used in nanotech instruments, has acquired QuantomiX, a Rehovet, Israel-based developer of a capsule technology that enables direct imaging of wet samples in scanning electron microscopes. No financial terms were disclosed. QuantomiX had raised around $13.5 million in VC funding since 2001, from firms like Evergreen Venture Capital, Pitango Venture Capital, Shrem Fudim Kelner Technolofies and Vitalife Life Sciences Fund.

Warburg Pincus has agreed to sell Loyalty Management Group to Aeroplan Income Fund (TSX: AER.UN) for £368 million (including an £18 million working capital adjustment). LMG is a loyalty marketing and analysis company that owns and operates the Nectar loyalty program in the UK. Warburg originally invested in July 2002.

PE-Backed M&A

Aptuit Inc., a Greenwich, Conn.-based provider of streamlining and support services for drug developers, has completed its acquisition of the chemical development business of Evotec AG (Frankfurt: EVT). The deal was valued at approximately €46.4 million in cash, and included Evotec’s capabilities in process R&D, custom preparation, analytical development, pilot plant manufacturing and formulation. Aptuit said that it intends to retain all of the businesses 210 employees, who are split between Oxford and Glasgow, UK. Aptuit is backed by Welsh, Carson, Anderson & Stowe and Temasek Holdings.

Firms & Funds

Kohlberg Kravis Roberts & Co. said that it may occasionally invest in common units of KKR Private Equity Investors, an Amsterdam-listed co-investment fund formed in April 2006.

Wasatch Venture Fund, a regional venture capital firm with offices in Salt Lake City and Santa Fe, has changed its name to EPIC Ventures. It will continue to focus on early-stage IT opportunities.

Human Resources

Kleanthis Xanthopoulos has been named president and CEO of Regulus Therapeutics LLC, a joint venture between Alnylam Pharmaceuticals Inc. (Nasdaq: ALNY) and Isis Pharmaceuticals Inc. Xanthopoulos is co-founder and former CEO of Anadys Pharmaceuticals, and most recently was a managing director with Enterprise Partners Venture Capital.

Tom Bain has joined Columbia Partners Private Capital as a principal. He previously spent six years as a senior associate with Columbia Capital, where he focused on opportunities in the IT space. Columbia Partners Private Capital manages over $250 million in structured finance investments in mid-to-late-stage growth companies and in private equity funds.

Raj Vora has joined Northern Trust as a member of the firm’s private equity fund-of-funds group. He previously was an associate with Wind Point Partners.