PE Week Wire: Monday, January 5, 2009

** What on earth is going on between Monitor Clipper Partners and Jude Rake, CEO of Monitor Clipper portfolio company Recycled Paper Greetings. To say they aren’t on the same page would be an understatement.

Back in September, RPG and Rake seemed to believe they were under attack from larger rival American Greetings. Specifically, they were upset about American Greetings buying over 50% of Recycled Paper’s first-lien debt. Rake referred to the move as “predatory,” and Monitor Clipper filed suit against American Greetings, arguing that the purchase violated a confidentiality agreement between the two companies.

Then last week it appeared that the chill had thawed. American Greetings announced that it had reached an agreement to acquire RPG, which would first file for Chapter 11 bankruptcy protection in order to restructure its debt. In a formal statement, Rake said: “This acquisition is good news for our company on many fronts.”

But it seems that Monitor Clipper Partners is still siding with Rake’s original assessment. In a press release issued late last Friday, Monitor Clipper managing partner Travis Metz said: “We strongly oppose the actions taken by American Greetings leading to the filing today of the bankruptcy. We believe American Greetings has been engaged in a series of actions that reflect its own inability to compete effectively in the attractive humor segment of the greetings card market. Through its unlawful actions, we believe American Greetings is attempting to eliminate Recycled Paper Greetings as a competitor, in an effort to gain more widespread traction in the lucrative market segment in which Recycled Paper Greetings excels.”

Metz declined to comment further in an email last night, except to say that both the statement and ongoing lawsuit speak for themselves.

*** Limited partners keep telling me how “unrealistic” it is for VCs to launch new firms this year, but that sure isn’t stopping the dreamers. Last month we broke news on ArrowPoint Ventures, and now there appears to be yet another Boston-area firm getting off the ground.

This one is called Genovation Capital, and was co-founded by: Jeff Binder, co-founder of Broadbus; Vin Bisceglia, former chairman and CEO of Broadbus; and Dave Fellows, former CTO for Comcast. It plans to focus on seed- and early-stage tech deals, although it may go further downstream for select opportunities.

I’m scheduled to speak with Binder later today, and will post at peHUB with more details.

*** Cogent Partners has just released its latest pricing analysis of the secondary markets for both venture capital and buyouts. Go here for more.

*** Quiz Time: Ok, this isn’t the type of blind item quiz we normally do, but have a go at it anyway: How is the Indymac buyout similar to the SunGard buyout? Hint: Think timing and due diligence.

Top Three

The Federal Deposit Insurance Corp. announced that failed mortgage lender Indymac will be sold to an investor consortium that includes Dune Capital Management, J.C. Flowers & Co., MSD Capital, Paulson & Co., Stone Point Capital, Soros Fund Management and Silar Advisors. The deal is being valued at $13.9 billion, including $1.3 billion in cash.

NuCO2 Inc., a Stuart, Fla.-based provider of bulk CO2 products and services to the U.S. fountain beverage industry, has acquired the bulk CO2 beverage carbonation business of Franklin, Tenn.-based nextAir. No financial terms were disclosed, except that NuCO2 expects the deal to add approximately $13 million in annual revenue. Aurora Capital Group took NoCO2 private last May for approximately $487 million.

VC Deals

DFine Inc., a San Jose, Calif.-based developer of electrosurgical systems for treating vertebral compression fractures, has raised around $35 million in Series D funding, according to a regulatory filing. An earlier filing had indicated a $20 million calldown with a $30 million target. Backers include BBT Fund, Highland Credit Strategies Fund, Prospect Venture Partners and Vanguard Ventures. The company had previously raised over $18 million.

Superfish Inc., a visual search engine startup with offices in Israel and Silicon Valley, has raised $5.3 million in Series B funding, according to a regulatory filing. Backers include DFJ Tamir Fishman Ventures, The Individuals’ Venture Fund and Xenia Venture Capital. Board members include Andreas Stavropoulos of DFJ.

Leigh Clifford has joined Kohlberg Kravis Roberts & Co. as a senior advisor. He is the current chairman of Qantas Airways, and the former CEO of Rio Tinto.

Buyout Deals

One Equity Partners has agreed to acquire the remaining 66.75% stake in Columbian Chemicals Holding LLC that it does not already own, for $150 million. The seller is South Korea-based DC Chemical Co., which partnered with One Equity to buy Columbian Chemicals in 2006 for $600 million from Phelps Dodge Corp. Columbian Chemicals is a Marietta, Ga.-based maker of carbon black, a material used to increase durability in products like tires and plastics. Dechert LLP is adv! ising One Equity on the deal, which is expected to close later this quarter.

Colony Capital acquired €44.7 million worth of shares in Accor, the French hotels company, over four separate transactions last month.

Waterford Wedgwood, the UK-based fine china maker, has fallen into receivership. The company had been trying to work out a financial restructuring, which reportedly included discussions of a €600 million investment from a U.S.-based private equity firm.

Yucaipa Cos. has acquired an 8.3% stake in bookseller Barnes & Noble Inc. (NYSE: BKS), saying it believed the shares were unvervalued.

PE Exits

PNC Financial Services Group has completed its acquisition of National City Corp., which early last year had received a $785 million investment from Corsair Capital. The cash and stock deal is worth approximately $5.6 billion.

PE-Backed M&A

Renal Advantage Inc., a Brentwood, Tenn.-based for-profit provider of dialysis services in the United States, has completed its acquisition of National Renal Alliance LLC, a Franklin, Tenn.-based owner and operator of 45 dialysis facilities in 10 states. No financial terms were disclosed. Rena! l Advantage is a portfolio company of Welsh Carson Anderson & Stowe.

U.S. HealthWorks Medical Group, a provider of outpatient occupational healthcare services in California, has acquired two California clinics: First Care Occupational Medical Group in Valencia, and First Care Walk-In Medical Group in Saugus. No financial terms were disclosed. U.S. HealthWorks has raised around $131 million since 1996. Current shareholders include Three Arch Partners, Salix Ventures, AIG Altaris Health Partners and Dynamic Healthcare Solutions.

Firms & Funds

Rasmala, a Dubai-based regional investment bank, has raised its second private equity fund with $120 million in capital commitments. The Sharia-compliant fund will focus on mid-market opportunities in the MENA region.

Human Resources

Jeffrey Wood has joined Eagle Rock Energy Partners (Nasdaq: EROC) as senior vice president and CFO. He previously was with Lehman Brothers as a senior vice president and portfolio manager in the firm’s private equity division.

General Catalyst Partners has promoted Neil Sequeira to managing director. He joined the firm in 2005, after having served as a managing director with Time Warner Investments.