PE Week Wire: Thurs., April 17, 2008

Daddy Thomson got married last night, in a quiet ceremony that involved some people signing papers and some people hanging signs. He also opted to add his bride’s name to his own – how very sensitive of him – in order to be renamed Daddy Thomson Reuters. Yeah, I know, needs work.

A bunch of you have asked what the Thomson Reuters merger means for PE Week Wire, peHUB and me personally. In the short term, not much. I’m not even supposed to use the new logo yet, even though it’s plastered all over our Boston offices and Times Square. Over the upcoming weeks and months, however, it means that peHUB will become much richer in terms of content, as we’ll begin feeding relevant Reuters news and video into the site. Conversely, peHUB will get branding on Reuters sites. At some point, we’ll also begin cross-syndication of content.

Integration is never easy, but this will end up being a net positive for you, dear reader. I’ll have more access to journalistic and tech resources than ever before, and think that it will improve your overall experience. To be sure, PE Week Wire will remain a one-man show, but I expect to eventually have some extra time freed up to do actual reporting. At the very least, change is good.

*** A couple of fundraising scoops for you: First up is U.S. Venture Partners, which is in the midst of raising its tenth fund with a $600 million target. That’s the same amount it raised for its ninth fund in 2004. Only difference this time around might be some streamlining of upper firm management. Next is The Riverside Company, which adds, adds-on to and sells portfolio companies as if private equity was a volume business (just kidding, sort of). The New York-based firm is targeting $1 billion for its latest general fund. The prior one capped out at $750 million in 2004. Riverside also manages a European and micro-cap fund.

*** A public shareholder in Blackstone Group has filed suit against The Blackstone Group, alleging that the firm violated federal securities laws through statements made in its IPO documents last year. The plaintiff is seeking class-action status, and accuses Blackstone of failing to disclose that certain portfolio companies weren’t doing too well – namely FGIC and Freescale — which could trigger clawback provisions.

Let me first admit that I’ve only read coverage of the suit, but not yet the actual complaint itself. Nor have I spoken to attorneys or Blackstone about it.

So all I can offer is the following gut reaction: Are you freakin’ kidding me? You didn’t realize that some of Blackstone’s portfolio companies were struggling? That would mean you assumed they were all doing bang-up business, which would make Blackstone the first-ever firm to have a 100% batting average. And, as a reminder, the IPO came pre-credit crunch. As I’ve said before, public investors should not have bought Blackstone stock, because most of them don’t understand what Blackstone actually does.

*** I had dinner with a group of bankers and buyout pros in Orlando last week, during which the host proposed a contest: Each table had to come up with its best war story, with the winner to receive a brass trinket. Most tables – including mine – came up with things that involved sex or fraud. But the winner topped us all: His firm was buying a check-cashing chain. Just as the deal was closing, a news story broke about how some guys had tried to cash a dead friend’s check, by propping him up Weekend at Bernies-style, and rolling him into the store. The lesson: Sex and fraud can’t compete with a corpse.

*** Sequoia Capital makes another public market hire. I just got an email that seems to explain what’s actually going on over there. Yes to the hedge fund, but yes to something else as well. Will provide details once I can confirm.

*** peHUB First Read

*** VC-backed Tesla Motors is being sued by one of its vendors.

*** The VCIC International Finals begins tomorrow, which means I’ll be based down in Chapel Hill, N.C. for the next few days. Looking forward to seeing some of you down there. If you’re competing, a big word of warning: It’s better to come in second. The winner has to pay for drinks.

Top Three

Pharos Capital and TPG Capital have agreed to buy American Beacon Advisors, the asset management subsidiary of American Airlines parent company AMR Corp. The deal is valued at approximately $480 million, with AMR retaining a minority ownership position.

Legend Capital yesterday closed its fourth fund with $350 million in capital commitments. The Beijing-based firm focuses on early-stage VC and mid-market growth equity opportunities in China. Its typical investment size is between $5 million and $20 million.

Ken Mehlman, former chairman of the Republican National Committee, has joined Kohlberg Kravis Roberts & Co. as a managing director and head of global public affairs. He most recently served as a partner with law firm Akin Gump Strauss Hauer & Feld, where KKR was among his clients.

VC Deals

Truphone, a UK-based VOIP company, has raised £16.5 million in Series B funding. The round was led by undisclosed investors, who were joined by return backers Burda Digital Ventures, Independent News & Media, Eden Ventures and Wellington Partners Venture Capital. The company had raised a £12.5 million Series A round in late 2006.

MTM Laboratories, a German maker of in-vitro devices for early detection and diagnosis of cervical cancer, has raised €9.6 million in additional Series C funding. This brings the round total to €31.6 million. NTEC, the direct VC investmentaffiliate of Kuwait Investment Authority, contributed €2.25 Million to this new tranche, while HBM BioVentures and HBM BioCapital co-led the overall round. Other backers include Wellington Partners, Mannheim Holdings, Heidelberg Innovation and Nexus Medical Partners.

Collective Intellect, a Boulder, Colo.-based provider of social media analytics, has raised $6.6 million in Series B funding. Grotech Capital Group led the round, and was joined by Crawley Hatfield Capital and return backers Appian Ventures and Croghan Investments.

Buddy Media Inc., a New York-based developer of Facebook applications, has raised $6.5 million in Series B funding. Softbank led the round, and was joined by European Founders Fund, GreyCroft Partners and Ron Conway. The company also announced the launch of a saocial network advertising network.

Buyout Deals

Candover, Goldman Sachs and Alpinvest have agreed to acquire Expro International Group, a publicly-traded UK energy company, for £1.6 billion.

3i Group has agreed to acquire a minority ownership stake in Union Radio, a Spain-based owner of Hispanic radio outlets Cadena Ser and Grupo Latino de Radio. The deal includes an initial investment of EUR 125 million, and a total commitment of EUR 225 million. Maite Ballester and Javier Alonso of 3i will join the Union Radio board of directors.

Castle Harlan hascompleted its acquisition ofAnchor Drilling Fluids USA Inc. from American Capital Strategies for approximately $250 million. Anchor Drilling is a Tulsa, Ok.-based provider of drilling fluids and fluid-handling services for onshore oil and gas drilling.

J.C. Flowers & Co. is leading a consortium offer to acquire a 24.9% stake in Hypo Real Estate, a Frankfurt-listed property finance business. The €22.50 per share offer represents a 25% premium.

Palladium Equity Partners has sponsored a management-led buyout of Remasas Quisqueyana Inc., a New York-based provider of money transfers and other services largely to Hispanic customers. No financial terms were disclosed. Other equity participants included Baird Venture Partners, Adams Street Partners, Sewanee Ventures and company management.

Wedbush Capital Partners has sponsored a growth equity recap of Reyn Spooner Inc. and Reyn’s Menswear, two affiliated island/surf-inspired apparel companies based in Hawaii. No financial terms were disclosed.

PE-Backed IPOs

Tommy Hilfiger plans to consider an IPO at the end of 2009, according a Reuters interview with company CEO Fred Gehring. The U.S. fashion retailer is owned by Apax Partners, and had abandoned a floatation in Amsterdam four months ago due to unfavorable market conditions.

PE Exits

Dynogen Pharmaceuticals Inc., a Waltham, Mass.-based drug company focused on gastrointestinal and genitourinary disorders, has scrapped plans to go public via a reverse merger with a SPAC called Apex Bioventures Acquisition Corp. The company is now expected to seek additional venture capital. To date, Dynogen has raised around $67 million from firms like Atlas Venture, HealthCare Ventures, Oxford Bioscience Partners, Abingworth Management, Medica Venture Partners and Pappas Ventures.

Enablence Technologies Inc. (TSXV: ENA) has agreed to acquire Wave7 Optics Inc., an Alpharetta, Ga.-based provider of optical access system for video, data and telephony services. The deal is valued at $10.5 million in Enablence stock. Wave7 had raised over $95 million in total VC funding since 2000, from firms like Advanced Technology Ventures, Ballast Point Venture Partners, Morgenthaler Ventures, Oak Investment Partners, Navigation Capital Partners, Lucent Ventures and Armada Venture Group.

PE-Backed M&A

GreenLine Foods, a provider of fresh-trimmed, microwaveable packaged green beans, has acquired HerbThyme Farms, a grower and distributor of fresh herbs in the U.S. No financial terms were disclosed. GreenLine is a platform portfolio company of The Riverside Company.

Jordan Valley Semiconductors Ltd., an Israel-based developer of tools for thin-film metrology, has acquired the intellectual property of Bede PLC, a listed UK maker of similar tools. No financial terms were disclosed. Jordan Valley last year raised an $11 million round led by Intel Capital, while it previously raised capital from Clal Industries and Elron Electronic Industries.

Layered Technologies Inc., a Plano, Texas-based company that helps clients deploy on-demand hosting and utility computing solutions, has acquired, a Chicago-based managed hosting company. No financial terms were disclosed. Layered Technologies recently raised $11 million from Enhanced Equity Fund and Pangloss International.

Central European Media Enterprises Ltd., a publicly-traded portfolio company of Apax Partners, has agreed to acquire two Romanian radio stations from Compania de Radio Pro.

Firms & Funds

3i Group has closed its Indian infrastructure fund with $1.2 billion in capital commitments.

Advent International has raised €1 billion for its fourth private equity fund focused on Central and Eastern Europe. It raised its first such vehicle in 1994, and has since backed 35 companies in Poland, the Czech and Slovak Republics, Hungary, Romania, Bulgaria and Turkey.

CVC Capital Partners has raised $4.1 billion for its third Asia-Pacific fund. It had raised around $1.98 billion for its second Asia-Pacific fund in 2005.

IndexAtlas has formed a $50 million private equity fund focused exclusively on businesses serving the art industry. The average investment will be between $3 million and $8 million.

Medu Capital, a South African private equity firm, has raised R850 million ($108m) for its second fund.

Partners Group, a Switzerland-based alternative assets manager, has opened an office in Luxembourg. It will be run by Jerry Ludig, who previously was with HSBC Securities.

Human Resources

Pam Patsley has joined Advent International as a Boston-based operating partner, focused on opportunities in the financial services, payments and transaction processing sectors. She has spent the past seven years with First Data Corp., most recently as president of first Data International.

Philip Moyles has joined Stone Point Capital as a senior advisor. He previously was with Marsh Inc. as executive VP and CEO of the Americas.