PE Week Wire: Mon., Oct. 15 2007

A deluge of news this morning, which means I ran out of time to write a column. But that’s okay, as I didn’t have anything pressing to write about… So just some links to help kick off your morning:

* Thomson Financial and the National Venture Capital Association have released Q3 fundraising data for the venture capital industry. Fifty-nine firms raised around $6 billion, which is a significant decline from both the prior quarter and Q3 2006. Download the data-filled release here.

* EVCJ editor Angela Sormani has posted a fascinating interview with Nathan Green, an executive with UK social networking startup The company needs to raise venture capital, and has a particular interest in raising it from its members. Seems easy enough, if not for some arcane UK regulations that Sormani describes as “strangling.” Read the interview here.

* Congresswoman Ileana Ros-Lehtinen (R-FL) has introduced a non-binding resolution to block Bain Capital’s proposed acquisition of 3Com, because Bain has teamed with a Chinese partner. As with the Dubai Ports World fiasco, this smacks of hysterical style over thoughtful substance.

* peHUB earlier this morning broke news that replacement bladder company Tengion has raised $33 million in Series C funding. The company has subsequently issued a press release. This is one of the most fascinating VC-backed companies around, as its “replacement bladders” are literal, not some sort of euphemism or Seinfeld riff.

* Sallie Mae is moving full-speed ahead with its LBO-related lawsuit. In fact, it wants to move full-high-speed ahead.

* Scott Kirsner on the competition between online video serving companies Maven and Brightcove, which share some VC lineage. Scott also has posted additional info — including an interview with Jeremy Allaire — at his blog.

* Document Dump at peHUB, including some Thomson Financial research on private equity investment in the energy sector, and a Nixon Peabody survey on MAC provisions.

Top Three

Accredited Home Lenders Holding Co. has received $100 million in working capital from new owner Lone Star Funds. The subprime mortgage lender also said that it plans to repay a $230 million loan it received earlier this year from Farallon Capital Management. The repayment was triggered by the sale to Lone Star, which closed last Friday.

Orexo AB (STO: ORX) has agreed to acquire Biolipox AB, a Swedish drug company focused on therapies for inflammatory diseases, including pain management and respiratory diseases like asthma and chronic obstructive pulmonary disease. The all-stock deal is valued at approximately $134 million, or 8.56 million Orexo shares. Biolipox has raised around $60 million in VC funding from firms like HealthCap (24.4% ownership), Apax Partners (21.2%), Sofinnov! a Partners (19.9%), Scandinavian Life Science Venture (9.8%), Credit Agricole Private Equity (8.4%) and Auriga (6%). Inc., operator of China’s largest B2B website, plans to raise up to US$1.32 billion via its Hong Kong IPO, according to Reuters. It plans to offer 858.9 million shares at between HK$10 and HK$12 per share, with Yahoo having already agreed to buy US$100 million worth. The company has raised around US$107 million in total VC funding, including an $82 million Series D round in early 2004 at a US$182 million post-money valuation. Shareholders include Fidelity Investments, Goldman Sachs, Granite Global Ventures, Softbank China VC, Investor AB, Transpac Capital and Venture TDF.

VC Deals

Rules-Based Medicine Inc., an Austin, Texas-based multiplexed biomarker testing laboratory, has raised $25 million in Series A funding. Equity Group Investments led the round, and was joined by Cross Creek Capital and Stephens Capital Partners. As part of the deal, EGI managing director Matt Zell has joined the Rules-Based Medicine board of directors.

BlackArrow Inc., a New York-based ad-management systems for viewer-controlled video, has raised $12 million in Series B funding. Cisco Systems was joined by return backers Comcast Interactive Capital, Intel Corp., Mayfield Fund and Polaris Venture Partners. The company also announced that Larry Kramer, a senior advisor to Polaris and founder of MarketWatch, has joined its board of directors.

CellPoint Diagnostics Inc., a Richmond, Va.-based cancer diagnostics company, has raised $11.22 million in Series A-1 funding, according to a regulatory filing. Northgate Capital Group was joined by return backer Mohr, Davidow Ventures. The company had raised an $8.5 million Series A round late last year.

Agito Networks Inc., a Sunnyvale, Calif.-based provider of enterprise mobility solutions, has raised $9 million in Series A funding led by Battery Ventures. The company’s debut product is a platform designed to mobilize “business voice and data applications using RF-based, location-aware technologies and patent-pending algorithms.“

M3 Technology Group, a Charlotte, N.C.-based provider of customized communications infrastructure services, has raised $6.5 million in new funding from Frontier Capital.

The New Orleans Exchange, a New Orleans-based developer of electronic trading platforms, has raised $4 million in Series A funding from Prism VentureWorks. The company will use the capital to roll out its first platform – and electronic exchange for buying and selling commercial receivables. New Orleans Exchange was co-founded by Justin Brownhill, former executive with Lava Trading, and Nicolas Perkin, former vice president of global business development for Massive Inc.

TokBox, a San Francisco-based video communications startup, has raised $4 million in Series A funding from Sequoia Capital and individual angels. The company says that its product “makes it effortless for anyone, anywhere to make a video call for free.”

Orasi Medical Inc., a Minneapolis-based neurological diagnostics company, has raised $2.4 million in Series A funding. PrairieGold Venture Partners led the deal, and was joined by CentreStone Ventures and individuals Kenneth Heithoff (Center for Diagnostic Imaging founder and chairman), Glen Nelson (former Medtronic Vice Chairman) and Mark Wagner (former Provation Medical CEO and Orasi chairman)

Biocontrol, a UK-based developer of treatments to cure serious antibiotic-resistant infections, has raised £500,000 in new funding. The Capital Fund led the transaction with a £250,000 infusion.

MediKeeper, a San Diego-based provider of technology solutions for the health and wellness industry, has raised an undisclosed amount of Series A funding led by PacifiCap.

Buyout Deals

Madison Dearborn Partners and Providence Equity Partners have completed their $7.3 billion buyout of CDW Corp., a Vernon Hills, Ill.-based technology retailer. CDW has de-listed from the Nasdaq, with its stockholders receiving $87.75 per share.

Actis has acquired a 49% stake in LMKR Holdings, a Pakistan-based provider of information management solutions to petroleum engineering services companies. No financial terms were disclosed.

AEA Investors has agreed to acquire Houghton International Inc., a Valley Forge, Penn.–based manufacturer and supplier of industrial fluids and chemical management services. No financial terms were disclosed. Houghton is being advised on the deal by CIBC World Markets.

Allied Capital has sponsored a management-led buyout of Tappan Wire & Cable Inc. from the founding owner and a company ESOP. Allied invested $26.4 million in common equity and senior secured unitranche debt. Tappan Wire is a Blauvelt, N.Y.–based manufacturer and distributor of low and medium voltage cables serving the communications, security, fire safety, computer networking and instrumentation markets.

Evergreen Pacific Partners has acquired a control stake in Haney Truck Line, a Yakima, Wash.-based provider of truckload transportation in the Pacific Northwest. No financial terms were disclosed for the deal, which included senior and subordinated debt from Prudential Capital Group and Prudential Capital Partners, respectively.

Greenbriar Equity Group has invested an undisclosed amount in Grakon, a Seattle–based maker of lighting systems and engineered trim components principally to North American and European commercial vehicle manufacturers. Leveraged financing was arranged by the Bank of Ireland and a fund managed by Oaktree Capital Management. Jefferies & Co. advised Greenbriar, while D.A. Davidson and Co. advised Grakon.

Gresham Private Equity has acquired toothpaste tube manufacturer Betts Global Ltd., from Permira, Royal Bank of Scotland and the Bank of Scotland. The deal is valued at over £110 million, including £75 million of debt arranged and underwritten by CIT Capital Finance. Betts supplies toothpaste tubes to such companies as Colgate Palmolive, GlaxoSmithKline, Procter & Gamble and Unilever.

Highland Capital Partners has acquired the consumer business of First Advantage’s US No financial terms were disclosed.

Lincolnshire Management has agreed to acquire a majority stake in the Alaska Club, an Alaskan chain of fitness clubs. No financial terms were disclosed.

Marquette Capital Partners has acquired Wisconsin Firm & Bag Inc., a Shawano, Wis. from Stonehenge Partners for an undisclosed amount. Argosy Partners and First Capital Partners also participated on the buy-side. WFB is a Shawano, Wis.-based of polyethylene bags and film for the flexible packaging industry.

Natural Gas Partners has agreed to acquire portfolio of generating and transmission assets owned by the City of Vernon, California. The transaction is valued at $342 million, and includes the 134 MW Malburg Generating Station, economic interests in 11 MW generated by the Palo Verde Nuclear Generating Station and 22 MW from the Hoover Uprating Project, as well as the City of Vernon’s interests in the Mead-Adelanto Transmission Project and the Mead-Phoenix Transmission Project.NGP teamed on the deal with Paul Prager, who previously worked with NGP to acquire Bicent Holdings.

Tornante Co. and Madison Dearborn Partners have completed their $385 million, or $9.75 per share, buyout of sports card maker Topps Company Inc.

Barclays Private Equity has invested an undisclosed amount in PremiumCommunications Holding AG (f.k.a. Cyberline Group), a Switzerland-based provider of multilingual services in the areas of tech support, user helpdesks, outbound and inbound services, and services for SMEs.

PE-Backed IPOs

Akela Pharma Inc., a Saint-Laurent, Quebec-based drug company focused on pain therapeutics, has filed for a $36.6 million IPO. It already trades on the TSX under ticker symbol AKL, and plans to also trade on the Nasdaq under ticker symbol AKLA. Lazard Capital Markets is serving as lead underwriter. Akela shareholders include Atlas Venture (8.5%), Great Point Partners (8.5%) and Sitra (6.64%).

Cardtronics Inc., a Houston, Texas-based operator and distributor of ATM machines, has set its IPO terms to around 16.67 million common shares being offered at between $14 and $16 per share. It would have an initial market cap of approximately $550.55 million, were it to price at the high end of its range, and plans to trade on the Nasdaq under ticker symbol CATM. Deutsche Bank Securities, William Blair & Co. and Banc of America Securities are serving as co-lead underwriters. CardTronics previously filed for an IPO in 2004, but later withdrew the offering. Soon after, it raised $75 million in new funding from TA Associates, which was used for both working capital and to provide some liquidity to majority shareholder CapStreet Group LLC. The current IPO registration lists CapStreet as having a 37.5% ownership position, with TA holding a 29.5% position.

Deltek Systems Inc., a Herndon, Va.–based provider of enterprise applications software for project-focused organizations, has set its IPO terms to nine million common shares being offered at between $17 and $19 per share. It would have an initial market cap of approximately $817.55 million, were it to price at the high end of its range. Deltek plans to trade on the Nasdaq under ticker symbol PROJ, with Credit Suisse serving as lead underwriter. New Mountain Capital is Deltek’s majority shareholder.

PE Exits

Conduit Capital Partners has sold its 81.83% stake in Termotasajero, a 155 MW pulverized coal power plant in Colombia, for $173 million. Buyers included a Chilean investment fund, Colombian pension funds and a Colombian investment

Freedom Communications Inc. has sold WLNE-TV, an ABC network affiliate serving the Providence, R.I. and New Bedford, Mass. markets, to Global Broadcasting. No financial terms were disclosed. Freedom Communications is an Irvine, Calif.-based media conglomerate backed by The Blackstone Group and Providence Equity Partners.

GE Healthcare has agreed to acquire Dynamic Imaging, an Allendale, N.J.-based provider of Web-based image and information management. Sellers include Capital Resource Partners. No financial terms were disclosed.

Infinera Inc. (Nasdaq: INFN), a Sunnyvale, Calif.-based provider of digital optical networking systems, has filed to sell 10 million shares via a secondary public offering. Half of the shares will be offered by the company, while the remainder will come from shareholders like Advanced Equities, Kleiner Perkins Caufield & Byers and Mobius Venture Capital. Infinera stock closed Friday at $23.97 per share.

Firms & Funds

Jafco Ventures has closed its third fund with $150 million in capital commitments. The Palo Alto, Calif.-based firm focuses on early-stage tech companies, and said that it expects to hire an additional general partner.

Voyager Capital has closed its third fund with $107 million in capital commitments. Limited partners include Procific, Meyer Memorial Trust, Vanderbilt University and the Oregon Investment Fund.

KSL Capital Partners, a private equity firm focused on the travel and leisure sectors, announced that it is forming a European affiliate to be known as KSL Capital Partners International. The London-based effort will be led by new hire Adrian Constant, who previously was a vice president of Orient Express Hotels-Europe.

Z Capital Partners is raising $1 billion for a special situations fund, according to LBO Wire. The Lake Forest, Ill.-based firm was launched last year by Black Diamond Capital Management founder James Zenni, and initially raised a hedge fund.

Human Resources

Jerry Ng has agreed to join TPG as head of Indonesia and a special advisor for Southeast Asia, effective November 1. He most recently served as deputy president director of PT Bank Danamon Indonesia. Before that, he was commissioner and deputy president director at PT Bank Central Asia, and held senior management positions in Citibank and in the Financial Services Division of the Astra International conglomerate (1991-2000).

Kurt Nyman has joined private equity firm Smith Whiley & Co. as a managing director. He previously worked at HIMCO as co-head of alternative assets. Before that, he spent 16 years as a managing director in Aetna’s investment department.

Richard Relyea and Andrew Olinick have joined 3i Group as New York-based vice presidents on the group’s growth equity team. Relyea previously was a principal with Halyard Capital, while Olinick was an associate with Veronis Suhler Stevenson.

Sebastian von Ribbentrop has joined WestLB as managing director and co-head of private equity activities in Germany. He previously was with Steadfast Capital in Frankfurt and, before that, was a member of the M&A team with J. Henry Schroder & Co. Ltd. in London.

CRG Partners, a New York-based turnaround firm, has promoted four pros to partner: John Calabrese, Eric Danner, Bruce Erickson and Michael Pinette.