PE Week Wire: Mon., May 19, 2008

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*** If you see someone from GE Antares today, don’t be alarmed if their fingernails are a bit chewed down. We’ve learned that the mid-market lender is planning significant layoffs this week, with official pink slips to come as soon as tomorrow. No word yet on numbers, except that this won’t be anything like half the staff. There will, however, be some layoffs of ex-Merrill Lynch Capital folks who had been considered “keepers” following GE Antares’ acquisition of the group late last year.

One source referred to the situation as a “class GE RIF” – or reduction in force. A GE Antares spokesman did not return a request for comment.

*** Venture capital giants John Doerr and Mike Moritz shared keynote responsibilities at the NVCA’s recent annual meeting. First question from Doerr to Moritz: “What was it that you thought when I called and referred Google to you?” We’ve got the audio.

*** Banks financing the BCE deal are now seeking to renegotiate the terms of their agreement, according to The NY Times. Gee, who could have seen that coming?

This could prove a very different situation than what we saw in the case of Clear Channel, although the lenders’ professional vacancy remains intact. First, there is now a bit of precedent thanks to CCU. Second, BCE can’t file suit in Texas (I don’t think), which means that the banks needn’t lose sleep over the possibility of a multi-billion dollar punitive punishment.

Finally, one of the BCE buyers is in a far different situation than was either of CCU’s buyers. That would be Madison Dearborn Capital Partners, which is having a heck of a time raising its $10 billion-targeted new fund. The BCE money is allocated from an existing vehicle, but bailing on the deal might help sway a number of limited partners who have expressed significant reservations about re-upping. MDCP has indicated strong interest in closing BCE, but it may not fight the strong fight if enough LPs propose a quid pro quo.

*** peHUB First Read, including a very embarrassing business plan error.

Top Three

XOJet Inc., a private aviation company sponsored by TPG Capital, has secured $2.5 billion in new financing to expand its fleet and better compete with rival NetJets. Approximately $85 million of the deal will be new equity from TPG, Tasameem (real estate arm of the Abu Dhabi Investment Authority) and XOJet management.

Kythera Biopharmaceuticals Inc., a Calabasas, Calif.-based developer of aesthetic medicines, has raised $40 million in Series C funding. JAFCO led the round, and was joined by BBT Capital Management/Apothecary Capital, PFM and return backers Versant Ventures, ARCH Venture Partners, Prospect Venture Partners, Altitude Life Science Ventures and Wilson Sonsini Goodrich and Rosati. Kythera has now raised around $61 million in total venture capital.

Vought Aircraft Holdings Inc., an Irving, Texas-based maker of aerostructure products for commercial, military and business jet aircraft, has filed for a $250 million IPO. It plans to trade on the NYSE under ticker symbol VTC, with Lehman Brothers, Goldman Sachs and JPMorgan serving as co-lead underwriters. Vought was formed in 2000 by The Carlyle Group, following its acquisition of Northrop Grumman’s aerostructures business. Carlyle currently holds a 97.6% ownership position.

VC Deals

WetPaint, a Seattle-based social publishing company, has raised $25 million in Series C funding. DAG Ventures co-led the round with an undisclosed “financial investor.” Return backers included Accel Partners, Frazier Technology Ventures and Trinity Ventures.

Molecular Imprints Inc., an Austin, Texas-based developer of nano-imprint lithography systems for high-res and 3-D pattern replication, has raised $12.9 million in fourth-round funding. Return backers include DFJ, Tokyo Electron Venture Capital, Wafra Investment Advisory Group, KT Venture Group, Alloy Ventures and Motorola Ventures. The company has now raised $91 million in total funding, including $15 million in federal grants.

HubSpot, a Cambridge, Mass.-based provider of inbound marketing systems for SMEs, has raised $12 million in Series B funding. Matrix Partners led the round, and was joined by return backer General Catalyst Partners. HubSpot had raised a $5 million Series A round in July 2007.

Openbravo, a Spain-based provider of open-source enterprise resource planning and point-of-sale solutions, has raised $12 million in Series B funding. Amadeus Capital Partners led the round, and was joined by GIMV and Adara Venture Partners.

NearbyNow Inc., a Los Altos, Calif.-based company focused on helping retailers use the Internet to drive shoppers to offline stores, has raised $11.75 million in Series C funding. Norwest Venture Partners led the round, and was joined by return backers Draper Fisher Jurvetson and Draper Richards. The company had previously raised $7.5 million.

Mu Dynamics (fka Mu Security), a Sunnyvale, Calif.-based provider of network service assurance solutions, has raised $10 million in Series C funding. Focus Ventures led the round, and was joined by return backers Accel Partners, Benchmark Capital and DAG Ventures. The company had previously raised around $15 million.

Multiwave Photonics, a Maia, Portugal-based developer of pulsed fibre lasers and specialty optical sources, has raised €5 million in Series B funding. FCR Espírito Santo Ventures led the round, and was joined by GP Sidecar and return backer Bullnet Capital.

EoPlex Technologies, a Redwood City, Calif.-based advanced materials company that makes miniature devices to generate, harvest and manage energy, has raised $4 million in Series C-2 funding. The total round now stands at $12 million. ATA Ventures led the expansion, and was joined by fellow return backers Draper Fisher Jurvetson, Labrador Ventures and Draper Richards.

EndoChoice Inc., an Atlanta-based provider of GI endoscopy products and services, has raised an undisclosed amount of Series A funding led by River Cities Capital Funds.

Buyout Deals

The Alberto-Culver Co. (NYSE: ACV) has agreed to sell its Cederroth International business to CapMan. Financial terms will be disclosed in an 8-K later this week. Cederroth is a Stockholm, Sweden-based maker of personal healthcare products in the Nordic region and parts of Europe.

Charlesbank Capital Partners has withdrawn its $7.05 per share buyout offer for Pomeroy IT Solutions (Nasdaq: PMRY). The original bid also had included David Pomeroy, the company’s founder and largest shareholder, who continues to express interest in acquiring the company via alternative financing. Pomeroy provides IT infrastructure solutions, with a focus on enterprise, network and end-user technologies.

DeltaPoint Capital Management has led an acquisition of Climax Manufacturing Co., a manufacturer of recycled paperboard and folding cartons with facilities in West Carthage and Lowville, New York. No financial terms were disclosed. Joining DeltaPoint on the deal was Hamilton Lane (on behalf of New York Common Retirement Fund) and New Spring Capital.

DLJ Merchant Banking reportedly is nearing a deal to acquire UK-based Education & Adventure Travel Group from Bowmark Capital for nearly £100 million. European Capital was originally expected to be the buyer, but pulled out at the 11th hour. It now is going to provide mezzanine funding to support the DLJ-led purchase. PricewaterhouseCoopers is running the process.

Naguib Sawiris of Egypt is in talks with three U.S. firms, over the sale of 10% in Weather Investments, a holding company formed in 2006 to buy Italian mobile operator Wind from Enel SpA. A deal could be signed within the next few weeks.

NAOC Holdings of Los Angeles has acquired PC Club, a personal computer retail chain with 37 nationwide locations and two ecommerce sites. No financial terms were disclosed.

VXI Technology Inc., an Irvine, Calif.-based maker of test equipment for a variety of industrial, military and commercial applications, has raised an undisclosed amount of private equity funding from Alerion Capital Group. Company management also participated in the transaction.

PE-Backed IPOs

Metals USA Holdings Corp., a Houston-based operator of metal service centers in the U.S., has filed for a $200 million IPO. It plans to trade on the NYSE under ticker symbol MUX. No underwriters were named in the filing. Apollo Management holds a 96.7% pre-IPO ownership stake.

PE Exits

AOL has completed its acquisition of Bebo, a UK-based social networking company, for $850 million. Bebo had raised $15 million in Series A funding from Balderton Capital back in May 2006.

Fenway Partners has agreed to sell American Achievement Corp., an Austin, Texas-based provider of class rings and yearbooks, to Herff Jones, a manufacturer and publisher of educational products, recognition awards and graduation-related items. No financial terms were disclosed, but LBO Wire puts the AAC enterprise value at between $600 million and $700 million. The Blackstone Group advised Herff Jones on the sale, while Fenway and AAC were advised by Lane Berry and Goldman Sachs.

Friedman Fleischer & Lowe has sold Milestone AV Technologies Inc. to The Duchossois Group for an undisclosed amount. Milestone is a Savage, Minn.-based maker of audio-visual mounting equipment and display solutions. It had recently withdrawn its IPO filing. Freidman Fleischer led a 2003 buyout of Milestone, which also included Fulham Investors and Performance Equity Management.

Tenaska Capital Management has agreed to sell Caledonia Energy Partners, owner of a multi-cycle gas storage facility in Northeast Mississippi, to Enstor Inc., the Houston-based natural gas storage unit of Spain-listed Iberdola Renewables. No financial terms were disclosed.

Vodafone has agreed to acquire ZYB, a Denmark-based operator of a social networking and online management tool that lets mobile phone users back-up and share their handsets’ contact and calendar information online. The deal is valued at €31.5 million in cash. Sellers include Nordic Venture Partners and ZYB’s founders.

Firms & Funds

Capital International has raised $2.25 billion for its fifth private equity fund focused on emerging markets. It already has committed approximately 25% of the fund in six investments, including a Russian daily, the Latin American operators of McDonald’s.

Investcorp is considering the formation of a $1 billion distressed debt fund.

Steamboat Ventures is planning to raise $200 million for its third fund, according to PE Week. The money will come from Steamboat’s sole limited partner The Walt Disney Co. Steamboat also is planning to tap the Mouse for a Europe-focused fund within the next 12 months.

Human Resources

Piper Jaffray Cos. has named Thomas Schnettler as president and chief operating officer. He previously had been CFO.

Tanya Heath has joined the Paris office of RainMakers Private Equity, a secondary advisory firm. She will serve as a vice president, and previously worked with JWare Technologies.

RedShift Ventures, an Arlington, Va.-based early-stage venture firm, has formed an advisory board. Its members are: Frank Bonsal, co-founder of NEA; Renny DiPentima, former CEO of SRA International; Nariman Farvardin, provost and former dean of engineering at the University of Maryland; Tom McDonough, president and COO of Sourcefire; and Tom Ridge, CEO of Ridge Global and former Homeland Security Secretary and Pennsylvania Governor.