PE Week Wire: Mon., Dec. 31, 2007

Return greetings to the dozen or so of you actually working today. So, what did I miss over the past two weeks? Something about the Magna Carta, continuing credit market woes and more year-end lists than yearly happenings. There was probably a bit more than that, which means that I’ll spend the next few hours reading up on recent history. That will be followed by several hours spent liquefying myself of such knowledge. In the meantime, a few notes:

*** I spent the past two weeks in Costa Rica, catching up and pigging out with J’s friends and family. Almost every single one of them (exception: toddlers) was extremely concerned about the U.S. economic picture, which of course translates onto the global economic picture (or at least the Latin American picture, where decoupling is not yet even a blip). They basically wanted to know if I was expecting a massive catastrophe – I heard the word “depression” twice – or just a minor catastrophe.

Please understand that this wasn’t a bunch of campesinos without television antennas. It was doctors, academics, students, a former oil trader and even a venture capitalist. Many have studied and/or lived in the U.S. And their confidence is completely shot.

Their worry isn’t necessarily predictive, but is still a stark reminder of how things are being viewed from outside of the financial bubble (where “mild recession” seems to be the growing consensus), and from outside of our borders. Probably good for me – and by extension you, dear reader – to get immersed in such thinking now and then… Broadens the perspective.

*** So the Manor Care deal closed while I was gone, and just days after I said on television that regulatory troubles could push it well into 2008. Most interesting comment on the deal came from Manor Care spokesman Rick Rump to The Washington Post, in regards to most senior executives remaining in place: “Carlyle are shareholders, not managers.” Just shareholders, eh? Either Rump doesn’t understand private equity, or Carlyle’s limited partners don’t understand Carlyle.

*** Sevin Rosen is losing its Silicon Valley partners, according to a report in Private Equity Insider. No surprise, given that past troubles have, in part, revolved around performance differentials between the Palo Alto and Texas offices (although Xensource helped even things out a bit). Alex Haislip has more at peHUB.

*** I’ll leave it to you to determine the year’s largest venture capital deal. When I left, it appeared to a two-way tie between CardioNet and Globus Medical, which each raised $110 million rounds. But today we learn that Motricity has raised $185 million in new funding. The only caveat is that Motricity will use much of that money to help fund a $135 million acquisition of InfoSpace’s mobile services unit.

*** HUGE thanks to my colleagues for filling in while I was gone. Not only here on the PE Week Wire, but also over at peHUB, where they’ve made lots of quality postings. I’ll be taking another break tomorrow (so, so lazy), but will be back again on Wednesday. Have a great New Year’s…

Top Three

Motricity Inc., a Durham, N.C.-based provider of mobile marketplace management solutions, has raised $185 million in new venture capital funding. Participants included Advanced Equities and return backers Carl Icahn and New Enterprise Associates. Part of the proceeds will be used to finance a recently-closed $135 million cash purchase of the mobile services business of InfoSpace Inc. (Nasdaq: INSP). Motricity has now raised over $365 million in total VC funding, including from Technology Crossover Ventures, Massey-Burch Capital, Noro-Moseley Partners, Intel Capital, Qualcomm Ventures, Sienna Ventures, TriState Investment Group, Wakefield Group and Advanced Equities.

American Capital Strategies has acquired New England Confectionery Co., a Revere, Mass.-based maker of confectionary products like NECCO wafers and Sweethearts Conversation Hearts. Clear Creek Capital and company CEO Domenic Antonellis also participated. No financial terms were disclosed, although real estate records show that American Capital bought NECCO’s land for $15 million.

Merrion Pharmaceuticals Ltd., a Dublin, Ireland-based developer of oral-dosage forms of drugs with poor bioavailability, has withdrawn its IPO registration. The company had planned to price four million American depository shares at a revised range of between $6 and $7 per share. The original range had been between $10 and $12 per share. Merrion had planned to trade on both the Nasdaq under ticker symbol MERR, with Punk, Ziegel & Co. serving as lead underwriter. Shareholders include Growcorp Ltd. and Elan Corp.

VC Deals

Mitralign Inc., a Tewksbury, Mass.-based developer of a catheter-based method for treating mitral regurgitation in patients suffering from congestive heart failure, has raised $24 million in Series C funding. Medtronic and Johnson & Johnson Development Corp. co-led the round, and were joined by Oakwood Medical Investors, Palisade Capital Management and Accelerated Technology Partners. Return backers included Forbion, Giza Venture Capital, Oxford Biosciences and Triathlon Medical Venture Partners. The company previously had raised around $28 million in VC funding.

Argus Information & Advisory Services, a White Plains, N.Y.-based provider of scoring solutions and advisory services to financial institutions, has raised an undisclosed amount of private equity funding from Oak Investment Partners. Portico Capital Securities advised Argus on the transaction.

Buyout Deals

The Gores Group has completed its acquisition of the Power Systems business of Tyco Electronics Ltd. for $100 million in cash. The unit manufactures power solutions, including board-level conversion components and complete power conversion and backup power systems for telecom applications.

Oak Hill Capital Partners has agreed to buy eight Fox network-affiliated television stations from News Corp. (NYSE: NWS) for approximately $1.1 billion. The deal is expected to close in Q3 2008, with Allen & Co. advising News Corp. on the deal.

Magic Software Enterprises Ltd. (Nasdaq: MGIC) has agreed to sell its Advanced Answers on Demand subsidiary to Fortissimo Capital for $17 million in cash. AAD develops application software targeted at the long-term care industry, including retirement and continuing care facilities, home health and rehabilitation agencies.

Printronix Inc. (Nasdaq: PTNX) shareholders have approved a $16 per share buyout offer from Vector Capital. The total deal is valued at $108 million, with Printronix CEO Robert Kleist and other senior managers expected to hold a 9.9% post-transaction position. Printronix is an Irvine, Calif.-based manufacturer of integrated enterprise printing solutions for the supply chain.

Waterford Wedgwood PLC (LSE: WTFU), a UK-based crystal and china maker, has received a EUR 50 million PIPE from Corporate Partners II, a private equity fund of Lazard Alternative Investments.

PE-Backed IPOs

Interxion, a Dutch data storage company, is considering a Gbp200 million floatation in London, according to The Sunday Times. The company has retained Bear Stearns as an advisor, and is controlled by Baker Capital.

Merrill Lynch took the top spot for IPO bookrunners in 2007, according to Dealogic. Morgan Stanley was just a bit behind, while 2006 champ Goldman Sachs came in third. The rankings exclude “blank check” and REIT offerings.

PE Exits

Brazos Private Equity Partners has completed its sale of ORS Nasco Inc. to United Stationers Supply Co. (Nasdaq: USTR) for approximately $180 million in cash. ORS Nasco is a Muskogee, Okla.-based wholesale distributor of branded and private-label products and services to industrial customers.It was acquired by Brazos in December 2005.

Human Resources

Vijay Khanna has rejoined GIV Venture Partners as a general partner. He initially joined GIV at its 2000 inception, but later left to become vice president of corporate development for SAP.

Udi Ziv has joined Giza Venture Capital as an executive venture partner, focused on opportunities in the software sector. He previously was general manager of the Small Technology unit at SAP AG.

Robert Keppler has joined Saints Capital as chief financial officer. He has spent the past decade as CFO for Centennial Ventures and, before that, spent 18 years in various executive positions with Total Petroleum Ltd.