PE Week Wire: Mon., March 24, 2008

Did you know that MIT’s investment office operates a private equity fund-of-funds for institutions other than MIT? Me neither, until I spotted a regulatory filing last week for something called MIT Private Equity Fund IV, which had around $190 million in committed capital.

I emailed someone over at MIT about it, and got this reply: “Yes, we have a small FoF operation investing others’ capital alongside MIT’s, only in the private equity space. Investors are smaller endowments and foundations – basically 501c3s.”

No limited partners were listed on the Fund IV regulatory filing, but a Fund III filing lists The Houston Museum of Fine Arts. The first such fund was raised in 2000.

*** Good seeing so many of you last Thursday at Buyouts Madness. We’ve got wrap-ups of all the panels over at peHUB, courtesy of the Buyouts Magazine staff (check our full editorial blog for all of them).

What was most interesting to me was the lack of consensus among panelists when it came to certain career path issues. For example, there was strong disagreement over the necessity of business school. Ditto for the value of having operating experience, and the ease of moving from a small firm to a large one.

Perhaps the most interesting comment came from Steve Paglicua, who said that the economic downturn had not affected Bain Capital’s hiring plans. In fact, he said that the firm plans to add more staff in the next 12 months than it did in the past 12 months.

*** Speaking of hiring, I had drinks in NYC with some tech-focused venture capitalists – who noted that the Bear Stearns collapse would result in thousands of available IT pros. Good for VCs, bad for IT pros in NYC.

*** Gametime: We’re through the first two rounds of our March Madness Extravaganza, with more than 500 of you participating. The early leader is Dan Renda of Vitech Systems Group, who has a score of 52. His final four is Kansas, UCLA, UNC and Pittsburgh (oops), with Kansas beating UCLA for the title. Still lots of games to be played…

*** QuizTime: Can you name the publicly-traded medical products company that is in talks to be acquired? Hint: The prospective buyer sort of shares its name with a rapper.

*** eStyle is the latest VC-backed bust, filing for chapter 11 after having raised more than $145 million in venture capital funding. Not surprisingly, the blame game has begun.

*** peHUB First Read, including a new controversy involving TheFunded. Remember, peHUB First Read is available each morning by 8am.

Top Three

Nordic Capital has offered to acquire listed Nordic IT services company TietoEnator Corp. for €1.1 billion, or €15.50 per share. The official bidder is Nordic Capital portfolio company Cidron Services, which already has amassed a 5% stake in TietoEnator. Leveraged financing for the buyout has been committed by Nordea Bank Finland, Pohjola Bank and Swedbank. If successful, Nordic Capital would install former TeliaSonera CEO Harri Koponen as chairman.

SpinVox, a London-based provider of voice-to-screen messaging solutions, has raised over $100 million in third-round funding. Backers include GLG Partners, Goldman Sachs and Toscafund.

SolarWinds, an Austin, Texas-based provider of network management software for the SMB/SME market, has filed for a $250 million IPO. It plans to trade on the NYSE under tucker symbol SWI, with JPMorgan, Goldman Sachs and Lehman Brothers serving as co-lead underwriters. The company has raised around $48.5 million in VC funding from Bain Capital Ventures (31.6% pre-IPO stake), Insight Venture Partners (31.6%) and Austin Ventures (3.4%).

VC Deals

Trius Therapeutics Inc., a San Diego-based developer of antibacterial drugs, has raised $30 million in Series B funding. Kleiner Perkins Caufield & Byers led the round, and was joined by FinTech Global Capital and return backers Sofinnova Ventures, Versant Ventures, Interwest Partners and Prism VentureWorks. (a.ka. BabyCare), a Chinese online community for pregnant and nursing mothers,has raised $17.1 million in third-round funding. Foundation Capital and NSA Investments were joined by return backers Sutter Hill Ventures and Chengwei Ventures. It had previously raised $9 million since 1999.

Mill River Labs, the parent company of online startup company database TradeVibes, has raised $900,000 in seed funding. Backers include Ron Conway, Felicis Ventures and the Kinsey Hills Group.

Buyout Deals

Alchemy Partners has entered talks with the creditors of portfolio company Buckingham Bingo, and soon is expected to decide whether to hand the company over or invest additional equity. Alchemy acquired the UK bingo hall operator in December 2005 for £101 million, but it generated profits of just £3.5 million on sales of £37 million.

Cerberus may offer to buy Siemens AG’s Siemens Enterprise Networks unit, according to German magazine WirtschaftsWoche. No financial terms were disclosed, except that the unit’s 2007 sales fell 10% to €3.2 billion.

ECI Partners and Indigo have agreed to acquire Premier Research, a UK-based provider of clinical outsourcing services that trades on London’s AIM. The deal is valued at £60.1 million, with Premier Research stockholders to receive 100 pence per share.

Mason Wells has acquired Coating Excellence International LLC, a Wrightstown, Wis.-based maker of flexible packaging for paper reams and food and industrial products. No financial terms were disclosed. Senior financing was provided by M&I Bank, Associated Bank, MB Financial, US Bank and Zions Bank. Mezzanine financing was provided by Prudential Capital Partners.

Red Acre Capital has acquired Personal Care Inc., operator of the Hair’s Boston chain of family salons. No financial terms were disclosed.

Warburg Pincus has completed its take-private acquisition of LifeCore Biomedical Inc., a Chaska, Minn.-based maker of dental and medical devices. The dealwas valued at approximately $239 million, with LifeCore stockholders receiving $17 per share. Lifescore has delisted from the Nasdaq, where it had traded under ticker symbol LCBM.

PlattForm Holdings Inc., an Olathe, Kansas-based provider of Internet marketing and enrollment solutions to the post-secondary education industry, said that it will rename itself Ad Venture Interactive and reorganize into three business units. The company is backed by Arlington Capital Partners.

PE-Backed IPOs

Zogenix Inc., a San Diego-based drug company focused on pain management and CNS disorders, has filed for an $86.25 million IPO. It plans to trade on the Nasdaq under ticker symbol ZGNX, with Banc of America Securities serving as lead underwriter. The company has raised$78 millionin VC funding from Domain Associates (23.2% pre-IPO stake), Clarus Ventures (23.1%), Scale Venture Partners (15.4%), Thomas McNerney & Partners (13.2%) and Abingworth Ventures (10%).

PE Exits

HP has completed its acquisition of Exstream Software LLC, a Lexington, Mass.-based provider of enterprise software for streamlining the creation and delivery of personalized documents and other communications materials. The seller was American Capital Strategies. No financial terms were disclosed.

Linden LLC has sold a control stake in portfolio company Ranir LLC to Kayak Holdings LLC, an investment group led by William Blair & Co. principal Richard Kiphar. Linden will retain a minority position. No financial terms were disclosed. Ranir is a Gran Rapids, Mich.-based maker of oral care products.

Wyle, an El Segundo, Calif.-based provider of tech and other services to military and civilian government agencies, has sold its Santa Clara, Calif. test operations to Silicon Turnkey Solutions, a Milpitas, Calif.-based test and qualification services company. No financial terms were disclosed. Wyle is a portfolio company of Littlejohn & Company.

Firms & Funds

Ping An Insurance of China has agreed to acquire a 50% equity stake in Belgium-based asset management company Fortis Investments. The deal is valued at €2.15 billion, with the resulting company to be renamed Fortis Ping An Investments.

The New York State Common Retirement Fund approved three fund commitments last month. They are: $100 million to CVC Equity Partners Asia Pacific III, $35 million to Palladium Equity Partners II and $10 million to Carmel Ventures III.

Reliant Equity Investors is being sued by nearly 400 former employees of catalog retailer BlueSky Brands Inc., which two weeks ago shut down and fired all of its employees. The complaint alleges that Reliant violated federal labor laws.

Human Resources

Alice Ruth has agreed to join Quadrangle Group as a managing principal, and Quadrangle Asset Management as chief investment officer. She previously was CIO for the Gordon & Betty Moore Foundation, which has $6 billion in assets.

Laird Boulden has joined Aquiline Capital Partners as a senior advisor, focused on the commercial and specialty finance sectors. He previously was president and CEO of RBS Asset Finance, a subsidiary of Citizens Financial Group.

Stephen Steinour has joined CrossHarbor Capital Partners, an alternative investment firm focused on real estate, distressed securities and private equity. He previously was president and CEO of Citizens Financial Group.