The United Nations Conference on Trade and Development has issued its annual World Investment Report, which indicates that more than half of private equity fund capital is being used for foreign direct investment. In 2005, that meant more than $100 billion being disbursed outside of a firm’s headquartered country.
You might not think this is not terribly noteworthy in a global economy – and you and I might agree — particularly since a growing percentage of limited partner commitments also is coming from foreign sources. But the UN sees some problems. Specifically, it appears wary of the general PE model, which does not provide the type of technology transfer typically associated with cross-border M&A. It also has that pesky investment lifespan problem (i.e., the quick flip phenomenon), plus a perception of accelerated layoffs.
The entire report is available here, while NY Times Dealbook provides a good roundup.
*** Paul Graham with an instructive primer on the 18 mistakes That Kill Startups.
*** Josh Kopelman on waterfall forecasts.
*** John Cook on the Trubion Pharma IPO. It wasn’t pretty, but at least it got done.
*** Finally, I am pleased to announce that the second-day keynote speaker at Buyouts Symposium West will be Dipanjan Deb, a founder and managing partner of Francisco Partners. As previously announced, the first-day keynote speaker is John Riccitiello, co-founder of Elevation Partners and former president of Electronic Arts.
The event takes place on November 6-7 at Stanford Court in San Francisco. Hope to see many of you there.
Top Three
Right Media Inc., a New York-based online advertising marketplace, has raised $45 million in Series B funding. Yahoo Inc. led the deal in exchange for a 20% ownership stake, while return backer Redpoint Ventures also participated. www.rightmedia.com
Cognetas (f.k.a. Electra Partners Europe) has sold UK retailer BWG to company management for €390 million. Cognetas acquired BWG from Pernod Ricard in 2002 for €220 million, along with a majority stake in Newhill, owner of a large number of Spar stores. www.cognetas.com
Madison River Communications Corp., a Mebane, N.C.-based provider of rural telephone services, has filed for a $287.5 million IPO. It plans to trade on the Nasdaq under ticker symbol MRCC, with Merrill Lynch and Goldman Sachs serving as co-lead underwriters. Company shareholders include Madison Dearborn Partners, Goldman Sachs and Providence Equity Partners. www.madisonriver.net
Icera Inc., a Bristol, UK-based wireless semiconductor company, has raised $20 million in additional Series C funding from 3i Group. This is the round’s second close, following a $40 million infusion earlier this year from Benchmark Capital Europe, Atlas Venture, Accel Partners and Amadeus Capital Partners. The company has now raised over $100 million in total VC funding since its 2002 inception. www.icerasemi.com
Efficas Inc., a Boulder, Colo.-based biotech company focused on nutritional management of the immune system, has raised $14.5 million in Series B funding. LSP BioVentures led the deal, and was joined by Unilever Technology Ventures and return backers Burrill & Co., Great Spirit Ventures, JPMorgan Bay Area Equity Fund and Prolog Ventures. Sevin Hills Partners served as placement agent. www.efficas.com
Resolute Networks Ltd., an Israel-based networking equipment company, has raised $10 million in new VC funding from return backers Genesis Partners, Giza Venture Capital, Benchmark Capital, Accel Partners, Partech International and Delta Ventures. Resolute was formed in late 2004, via the merger of Lycium Networks and Redux Communications. www.resolutenetworks.com
Global Locate Inc., a San Jose, Calif.-based provider of A-GPS technology to the wireless industry, has raised $8 million in Series E funding, according to a regulatory filing. Shareholders include Siemens Venture Capital, GC Inv*stments, Firsthand Capital Management and Third Point Offshore Fund. www.globallocate.com
Experiencia Inc., a Chicago-based educational company focused on immersive learning, has secured $2.38 million of a $3 million Series B round, according to a regulatory filing. Shareholders include Origin Ventures. www.experiencia.org
Vinfolio Inc., a San Francisco-based wine retailer and collector services company, has raised $1.6 million from individuals like Jean Michel Valette (former chairman of Robert Mondavi Winery) and Colin Lind (managing partner of Blum Capital Partners). www.vinfolio.com
Leonardo BioSystems Inc., a Houston, Texas-based developer of nanotech-based cancer therapeutics, has raised over $1 million in startup funding from Benet Group.
Athletes’ Performance, a Tempe, Ariz.-based provider of integrated performance training solutions, has raised an undisclosed amount of first-round funding from Polaris Venture Partners. www.athletesperformance.com
ZYB, a Copenhagen-based provider of free mobile backup and sharing services, has raised an undisclosed amount of VC funding from Nordic Venture Partners. www.zyb.com
MBK Partners has agreed to acquire a 60% stake in Taiwanese cable television company China Network Systems for approximately $932 million, according to the Economic Daily News.
Publishing & Broadcasting Ltd., an Australian gaming and media company, has agreed to sell half of its media assets to CVC Asia Pacific for Au$4.54 billion. The announcement came shortly after the Australian parliament approved relaxed media ownership rules. CVC beat out rival bidders KKR and Newbridge.
Apax Partners and Permira have completed their acquisition of a majority stake in Italian betting company Sisal SpA. The deal is valued at around €900 million, with prior owner Clessidra retaining a minority position. www.sisal.it
PE-Backed IPOs
First Mercury Financial Corp., a Southfield, Mich.-based provider of insurance products to the specialty commercial insurance markets, priced around 9.7 million common shares at $17 per share ($16-$18 range), for an IPO take of approximately $165 million. It will trade on the NYSE under ticker symbol FMR, while JPMorgan and Keefe, Bruyette & Woods served as co-lead underwriters. Glencoe Capital was the company’s majority shareholder, pre-IPO. www.coverx.com
Trubion Pharmaceuticals Inc., a Seattle-based drug company focused on inflammatory diseases and cancer, priced four million common shares at $13 per share ($13-$15 offering range), for an IPO take of approximately $52 million. It will trade on the Nasdaq under ticker symbol TRBN, while Morgan Stanley served as lead underwriter. The company had raised around $46 million in VC funding from firms like Frazier Healthcare Ventures, Oxford Bioscience Partners, Prospect Venture Partners, Venrock Associates and ATP Capital. www.trubion.com
Light Sciences Oncology Inc., a Snoqualmie, Wash.-based developer of light-activated treatments for solid tumors, has postponed its planned $86.25 million IPO due to adverse market conditions, according to The Associated Press. It plans to trade on the Nasdaq under ticker symbol LSON, with Wachovia Securities and Cowen & Co. serving as lead underwriters. The company raised $67.3 million in Series A funding late last year from firms like Essex Woodlands Health Ventures, Scandinavian Life Science Venture, Novo AS, New Science Ventures, China Industrial Development Bank and Johnson & Johnson Development Corp. www.lsoncology.com
SYS Technologies (AMEX: SYS) has acquired Ai Metrix Inc., a Reston, Va.–based provider network management solutions. Ai Metrix shareholders will receive 3.1 million shares of SYS common stock – valued at around $7.4 million – plus the possibility of additional earn-outs. Ai Metrix raised over $30 million from firms like General Atlantic and Spectrum Equity Investors. www.aimetrix.com
Silicon Graphics Inc., a Mountain View, Calif.-based provider of server and storage solutions, has emerged from Chapter 11 bankruptcy protection with $115 million in new financing. Morgan Stanley Senior Funding and GE Capital served as lead agents on the funding facility, which includes an $85 million term loan and a $30 million revolving line of credit. www.sgi.com
The Carlyle Group is planning to raise $15 billion for its next U.S. private equity fund, according to Bloomberg. It also reportedly is seeking €5 billion for its next European private equity fund. www.carlyle.com
Lehman Brothers is planning to raise around £4 billion for a new private equity real estate fund, according to The Telegraph. Up to half of the capital will be allocated to Asia. www.lehman.com
Paige Daly has left Apax Partners, where she had been a New York-based partner in the firm’s retail and consumer group. www.apax.com
Fahri Diner has joined Sigma Partners as a Menlo Park-based partner. He is the founder and former CEO of Qtera, which was acquired by Nortel for $3.25 billion. www.sigmapartners.com
Thomas Farb has joined Indevus Pharmaceuticals Inc. (Nasdaq: IDEV), in the newly-created positions of president and chief operating officer. Farb served as executive vice president and CFO of Indevus between 1994 and 1998, after which he served as CFO of Summit Partners and then as co-founder of New America Partners. www.indevus.com
Everett Smith III has joined New Energy Capital as chief financial officer. He had spent the past 15 years with GE Capital, as a managing director and executive vice president in the GE Structured Finance Group. www.newenergycapital.com
GulfStar Group, a Houston-based middle-market I-bank, has promoted John O’Brien to assistant vice president and Brian Lobo to associate. O’Brien joined the firm in 2004, while Lono came aboard earlier this year. www.gulfstargroup.com
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