PE Week Wire, Sept. 20, 2006

I spent yesterday stuck first in the hand-me-down VW, and then in meetings. So just some reading suggestions to begin your day…

*** Brad Feld and Jim Lejeal continue their Board Meeting series, by asking “How many board meetings should a VC-backed company have?”

*** Lots of buzz around Yahoo’sdisappointing online disappointing online ad sales results, with some wondering if the burgeoning online ad boom has stalled. My own opinion is that this probably has more to do with Yahoo’s slow adoption of new technologies (as ZDNet’s Ryan Stewart argues), plus some cannibalization of Google/Yahoo by social networking sites like MySpace. Either way, however, the news makes certain VC-backed blog plays even dicier than they already were…

*** John Doerr on why his daughter is angry with his generation.

*** Finally, Jim Kilts yesterday joined new I-banking boutique Centerview Partners as a founder partner focused on building out a consumer-focused private equity effort. The New York Times suggests that he will help raise a fund of around $1 billion. For the uninitiated, Kilts is the former CEO of The Gillette Co., and helped orchestrate that company’s sale to Procter & Gamble. For his efforts, Kilts received a golden parachute of around $165 million. His efforts also led directly to layoffs and plant closures. Let me reprint part of what I wrote at the time:

Kilts’ decision made himself rich and others poor. Even worse, he’s had the gall to complain about media coverage of his greed (he called himself a piñata). My humble hope is that Kilts does not get hired to a plum private equity job once he formally leaves Gillette. I know that PE is the final refuge for many former CEOs, but perhaps some sense of morality will prevail.

Didn’t happen.

Top Three

InvesTools Inc. (Nasdaq: IEDU) has agreed to acquire ThinkorSwim Group Inc., operator of an online brokerage platform. The deal is valued at approximately $340 million, including $170 million in cash and 19.1 million IEDU common shares (30% stake). To help fund the deal, InvesTools will receive a $125 million senior term loan and a $25 million revolving credit facility from JPMorgan. TwinkorSwim raised $22.5 million in VC funding in 2004 from Technology Crossover Ventures.

DATAllegro, an Aliso Viejo, Calif.-based provider of data warehousing appliances, has raised $22.5 million in Series C funding. Jafco Ventures led the deal, and was joined by Focus Ventures and return backers Adams Capital Management, Intel Capital, Palomar Ventures and Venrock Associates.

Jim Kilts, former chairman and CEO of The Gillette Co., has joined Centerview Partners as a founding partner focused on building out a consumer-focused private equity effort. Centerview is a recently-launched New York boutique co-founded by Stephen Crawford (Morgan Stanley), Blair Effron (UBS) and Robert Pruzan (Dresdner Kleinwort Wasserstein).

VC Deals

Intermolecular Inc., a San Jose, Calif.-based nanotech company, has raised $27.62 million in Series C funding, according to a regulatory filing. Return backers include CMEA Ventures, Redpoint Ventures and U.S. Venture Partners.

Solaria Inc., a Fremont, Calif.-based developer of photovoltaic module production solutions, has raised $22 million in Series B funding. Backers include Sigma Partners, NGEN Partners, Q-Cells AG Moser Baer.

Netadmin, a Sweden-based provider of management software for broadband operators, has raised SEK 44 million ($6.06 million) from Eqvitec.

Dexterra Inc., a Bothell, Wash.-based provider of mobile workforce and field service software, has raised $6 million in additional Series D funding, according to a regulatory filing. This brings the round total to $18 million. Backers include Canaan Partners, Motorola Ventures, Intel Capital, SagusCapital and Sigma Partners.

SoonR Inc. of Campbell, Calif. has raised $6 million in Series A funding. Clearstone Venture Partners led the deal, and was joined by Intel Capital. The company enables mobile access to PC-based information and applications from any cell phone over any carrier network.

Canesta Inc., a Sunnyvale, Calif.-based developer of chips that help computers measure 3D spaces, has raised $5 million in venture capital from Honda Strategic Ventures. Canesta has raised over $40 million in total VC funding, from firms like Carlyle Venture Partners, Venrock Associates, JPMorgan Partners and Korea Global IT Fund.

Cyren Call Communications Inc., a McLean, Va.-based provider of a mobile communications network for public safety and emergency responders, has raised $4 million in Series A funding, according to a regulatory filing. Backers include Columbia Capital, Battery Ventures, Oak Investment Partners and New Enterprise Associates.

Ludesi AB, a Swedish provider of bioinformatics solutions to the life science industry, has raised SEK 25 million ($3.44 million) from InnovationsKapital. Existing Ludesi shareholders include ForetagsByggarna and the Sixth AP Fund.

Buyout Deals

KKR is considering a revised offer for Australian retailer Coles Myer, which already has rejected a Au$17 billion bid. Coles Myer releases earnings today, and The Australian Financial Review reports that KKR has scheduled a conference call with its consortium – Bain Capital, Carlyle Group, CVC Capital Partners, TPG and Pacific Equity Partners – to discuss its options.

SPG Partners has agreed to acquire a majority stake in Excel Mining Systems Inc., a Bowerston, Ohio-based producer of roof bolts and related roof control products. No financial terms were disclosed for the deal, which is expected to close next quarter.

Boston Ventures has agreed to acquire a majority stake in En-Touch Systems Inc., a broadband services provider that serves the suburbs of Houston, Texas. No financial terms were disclosed. Sellers included several family trusts, while company management teamed with Boston Ventures.

PE-Backed M&A

AppLabs Technologies, a Philadelphia-based software testing company, has acquired IS Integration, a UK-based IT and business solutions testing consultancy, for $36 million in cash. AppLabs has raised $17 million from Sequoia Capital India, while IS.

Allegiance Communications LLC, a Tyler, Texas-based portfolio company of The Wicks Group of Cos., has acquired certain cable systems from Charter Communications (Nasdaq: CHTR), serving approximately 29,000 video subscribers in Oklahoma, Kansas, Missouri and Texas.

PE Exits

Art Technology Group Inc. (Nasdaq: ARTG) has agreed to acquire eStara Inc., a Reston, Va.–based provider conversion solutions for enhancing online sales and support initiatives. The deal is valued at up to $48.3 million, including $2 million in cash, a $6 million cash earn-out and around 15.3 million common shares of ATG stock. Estara raised $17 million in VC funding in 2000, including a $15 million infusion at a $25 million post-money valuation. Backers included Texas Pacific Group, One Equity Partners and JNet Ventures.

Firms & Funds

Hammond Kennedy Whitney & Co. is raising up to $185 million for its third fund, according to a regulatory filing. The Indianapolis-based firm sponsors management buyouts of private companies.

Platte River Ventures is raising up to $60 million for its inaugural fund, according to a regulatory filing. So far it has over $48 million in capital commitments. The Denver-based firm will focus on private equity opportunities in the small and middle-markets.

Tricor Pacific Capital has closed its fourth fund with Cnd$555 million in capital commitments. The Vancouver-based firm will focus on private equity opportunities in Western and Midwestern Canada and the United States. Lazard served as fund placement agent.

The Silverfern Group has formed Silverfern Co-Inv*stment Partners, which will commit between $50 million and $150 million alongside private equity firms in large and middle-market buyouts, acquisitions and recaps.

Doughty Hanson & Co. has opened an office in Madrid, Spain. It will be staffed by new principals Francisco Gutierrez Churtichaga (formerly with JPMorgan Partners in Spain) as head of Spanish private equity, and Juan Barba Silvela (Aareal Bank) as head of Spanish real estate.

Lincoln International, a Chicago-based mid-market I-banking firm, has opened an office in Los Angeles. It will be led by new senior vice president Steve Wiesner, who previously was with Zuma Capital Partners.

Human Resources

Alan Menkes has joined Tri-Artisan Partners as a managing director overseeing private equity activities. He previously was founder and managing partner of Empeiria Capital, and before that as co-director of private equity at Thomas Weisel Partners.

Chris Brothers has left Oaktree Capital Management, where he had been a managing director. No word yet on his future plans.

Ray Torres has joined Tonka Bay Equity Partners as an operating partner, focused on acquisitions in the plastic packaging market. He is president of Torres & Towers LLC, a joint venture with Zeller Plastik USA that focuses on the sale and distribution of plastic enclosure products.

Jack Cashman has joined Genesys Capital Partners as a venture partner. He currently serves as non-executive chairman of two Genesys portfolio companies — Insception Biosciences and Interface Biologics — and is the former chairman and co-CEO of R.P. Scherer (now part of Cardinal Health).

John Myers, recently-retired president and CEO of GE Asset Management, has agreed to join FostmannLeff, which recently was purchased by Angelo, Gordon & Co. He also will become a partner with Angelo Gordon, effective October 1.

Ares Management has made four additions to its London-based European Leveraged Credit group: Ross Code, previously with GMAC Commercial Finance; Nina Brauer, previously with Allied Irish Bank; Brian Schuring, transferring from Ares’ Los Angeles office; and Lauren Ferstandig, transferring from Ares’ New York office.