PE Week Wire, Nov. 17, 2006

A few (very) brief notes before I head down to New York for an evening of Financial Follying…

*** I understand Second Life like I used to understand Dungeons & Dragons. Not my cup of tea, but clean escapist fun for those who fancy themselves dice-throwing sorcerers. What completely confounds me, however, is the Second Life economy, in which people can make real money by selling fake things. Examples include pixilated designer dresses or “real estate” on fantasy islands (they actually make “Linden dollars,” which have a L$300-US$1 conversion rate at Second Life currency exchange centers).

I’m not passing judgment, but rather just passing on my incredulity.

The reason I bring it up at all is that Second Life today is launching a business plan competition for “resident” entrepreneurs. The grand prize isn’t terribly large – L$350,000 in seed Monday, which works out to less than US$2k), but it does involve some advisory participation from real VCs. The winner also will get complimentary marketing advice from PR firm Edelman.

If you’re interested, there will be a kick-off panel this afternoon at 1pm EST, with panelists including Susan Wu of Charles River Ventures. I can’t believe I’m relaying this but… Attendance will be limited on a first-come, first-served basis so please arrive early to Edelman Island. You can IM Hank Hoodoo with any questions.

*** My colleague Alexander Haislip yesterday broke news that NetPickle (a.k.a. RockYou) has some serious IP troubles that VC backers like Sequoia and Lightspeed should have known about before investing. More at (including a new update), while PE Week subscribers can read the full story at

*** NYMEX last night priced its IPO at $59 per share, but it’s already been trading as high as $140 per share this morning (opened at $125). Not a ringing endorsement of underwriter foresight…

*** We added 18 new jobs to the peHUB Careers page, plus a new column from executive recruiter Denise Palmieri. Remember, you can add your job to the board for just $99 per post. Everything from intern-level to partner-level positions. You also now can post “Featured listings” to our events calendar, which gives you the ability to include detailed agenda information.

*** Finally, just a quick plug that yours truly be pulling double-duty at the Yale SOM Private Equity Conference on December 1 in Rye Brook, N.Y. First, I’ll be moderating an LP panel that includes Robert Brown of Carlyle Group, Jason Gull of Adams Street Partners and Sheryl Schwartz of TIAA-CREF. Second, I’ll be refereeing a point/counterpoint discussion between Bob Friedman, senior managing director and chief administrative officer of Blackstone Group, and Mike Goss, managing director and CFO of Bain Capital. Hope to see many of you there…

Top Three

Neurotech Pharmaceuticals Inc., a Lincoln, R.I.-based developer of therapeutics for chronic retinal diseases, has raised $35 million in Series B funding. Burrill & Co. led the deal, and was joined by Versant Ventures, SV Life Sciences, Omega Fund, Nexus Medical Partners and Pound Capital. Return backers included Apax Partners France, Merlin Biosciences, Atlas Venture, Mayflower, Avida Group and Alpha Associates.

Leonard Green & Partners has agreed to buy David’s Bridal from Federated Department Stores (NYSE: FD) for approximately $750 million. Federated also will sell its tuxedo business to Men’s Wearhouse for approximately $100 million. Both transactions are expected to close in Q1 2007.

HCA Inc. (NYSE: HCA) shareholders yesterday approved a $51 per share buyout offer from private equity firms KKR, Bain Capital and Merrill Lynch Global Private Equity. Around 82% of shareholders voted, with 73% of them supporting the deal. A final close could come as early as tomorrow.

VC Deals

ProtoStar Ltd., a Bermuda-based acquirer and operator of geostationary satellites for DTH satellite television in the Asia-Pacific region, has raised $50 million in third-round venture capital funding. No investor information was disclosed for the deal, which follows a recent $40 million Series B round that included VantagePoint Venture Partners, New Enterprise Associates and RedShift Ventures. The company also said that it has secured $160 million in senior secured convertible notes placed by Jefferies & Company.

Health Hero Network Inc., a Redwood City, Calif.-based provider of technology solutions for chronic care management, has raised $16 million in Series B funding. Psilos Group led the deal, and was joined by fellow return backers Artal Services, Shoreline Venture Partners and ZG Ventures provided additional support. New shareholders include California Technology Ventures, Integral Capital Partners and Boston Scientific., a Boston-based social content/networking startup, has raised $10 million in second-round funding from Pilot House Ventures, Hearst Corp. and McGraw Hill Cos.

RedBaby, an online vendor of baby and mother care products in China, reportedly has raised $10 million in VC funding from NetScreen and New Enterprise Associates.

The Natural Dentist, a Medford, Mass.-based oral care company, has raised an undisclosed amount of Series B funding. Burrill & Co. and Prolog Ventures co-led the deal, and were joined by Brooke Private Equity and existing shareholder Great Spirit Ventures.

W5 Networks Inc., a Fremont, Calif.-based provider of wireless solutions for the retail industry, said that it has raised an undisclosed amount of second-round funding from SunBridge Partners. This is in additional to the recently-announced $12 million close of its Series B round.

Buyout Deals

Cinven has agreed to acquire Sweden-based in vitro testing company Phadia AB from PPM Capital and Triton Partners for Euro 1.285 billion. The deal is expected to close in January, with leverage being provided by The Royal Bank of Scotland, Bayerische Hypo and Vereinsbank AG and UBS.

General Atlantic has completed its acquisition of a 52% interest in Emdeon Business Services from Emdeon Corp. (Nasdaq: HLTH). The deal is valued at approximately $1.2 billion, including $319 million in equity from General Atlantic and $925 million in bank debt. Emdeon Business Services is a provider of revenue cycle management and clinical communications solutions that enables payers, providers and patients to improve healthcare business processes.

Clayton, Dubilier & Rice has completed its $575 million investment in beauty supplies retailer Sally Beauty Holdings (NYSE: SBH). The transaction allows Sally to spin out from Alberto Culver Co. as a freestanding public entity, with CD&R holding a 47.5% stake. The total transaction is valued at approximately $3 billion.

Henderson Private Equity has won the Gbp1 billion auction for John Laing PLC, a UK-based project finance initiative (PFI) construction group. Alllianz was the losing bidder.

Texas Pacific Group has put Swiss fashion and accessories company Bally International AG on the auction block, according to Women’s Wear Daily. Kenneth Cole is among the expected bidders.

Norvestor has agreed to acquire a 70% interest in BecoTek, a Norway–based manufacturer and supplier of brass cages to the ball and roller bearing industry. No financial terms were disclosed.

PE-Backed IPOs

NYMEX Holdings Inc., the New York-based operator of the New York Mercantile Exchange, priced 6.5 million common shares at $59 per share ($54-$57 forecast), for an IPO take of approximately $383.5 million. It will trade on the NYSE under ticker symbol NMX, while JPMorgan and Merrill Lynch served as co-lead underwriters. General Atlantic held a 10% pre-IPO position.

Veuling Airlines SA, a Barcelona-based budget airline carrier, has received regulatory approval for an IPO on the Spanish stock exchange. Shareholders include Apax Partners and JetBlue Airlines.

PE Exits

Yahoo Inc. (Nasdaq: YHOO) has agreed to buy, a Palo Alto, Calif.-based provider of online contests. No financial terms were disclosed. Bix was founded earlier this year as 900 Seconds, and raised around $6.75 million in funding from Sutter Hill Ventures, Trinity Ventures and Stanford University.

Willis Stein & Partners is selling its entire 8.7% stake in ANSYS Inc. (Nasdaq: ANSS), which it acquired in connection with Ansys’ purchase of Fluent Inc. in May 2006. The 3.35 million shares will be sold in a secondary offering underwritten by Goldman Sachs.

Firm & Fund News

FirstVentury, a German venture capital firm, has held a Euro 40 million first close on a new fund targeting a total of Euro 100 million. LPs include family offices in Germany, Britain and Switzerland.

Human Resources

Peter von Lehe has joined Lehman Brothers’ Private Fund Investments group as a managing director. He previously spent eight years with SwissRe in Zurich and New York, ending as deputy head of the Private Equity Fund-of-Funds business.

Cali Tran has joined North Bridge Venture Partners as a principal. He previously co-founded VC-backed mobile learning company Agilix Labs.