PE Week Wire: Thurs., Dec. 13, 2007

I spent nearly 40 minutes on the phone yesterday with Adeo Ressi, or the artist formerly known as “Ted” of At issue was the column I wrote about his coming out party, which included some criticisms of both his event and his site. More constructive than contentious, which speaks to Ressi’s genuine desire to make TheFunded more than an aggregator for entrepreneurial gossip. Some notes:

Ressi says that he removed the curtain because too many people knew his secret. “I had told a lot of people, which means it was bound to leak out… I thought it was best to come out on my own terms.”

The site will soon include term sheet data, which will be submitted by entrepreneurs (company names redacted). Members will have to submit a term sheet in order to see others, but Ressi doesn’t expect that to be a problem. “The only time an entrepreneur cares about terms is when they’ve gotten a term sheet.”

My main criticism was that the site’s rankings only use qualitative factors, which is how a new firm with no exits sits atop the list. Ressi isn’t entirely convinced this is a huge problem – under a theory that today’s top-rated firms with get better dealflow and, therefore, become tomorrow’s top-performers – but is clearly giving thought to addressing the issue. We tossed around some ideas, and wrestled with how to account for outliers (a fund whose performance is skewed by one huge win or loss) and new funds (should the aforementioned new fund be penalized just because of its age?). No concrete solutions yet, but I’d expect that there will be at some point soon.

I told Ressi that something was missing from my original column, so let me share it now: Despite my criticisms, I would bet that TheFunded is acquired by a major business media company within two to three years. Maybe Daddy Thomson, maybe Dow Jones, maybe Forbes. Each of those companies has great exposure to the investor class, but much less to the entrepreneurial ranks (save for some sector verticals). It’s a big group, and TheFunded could provide a valuable gateway – not to mention an expansion of existing data products.

* Oncomed Pharmaceuticals signed a strategic partnership earlier this week with GlaxoSmithKline, which could be worth up to $1.4 billion. Longtime readers may remember Oncomed as the cancer “stem cell” company I profiled back when it raised its first round of VC funding (it’s now got more than $60m in the bank). As I wrote at the time: “This may just be the most exciting company I’ve come across in five years of covering startups and the investors who love them. And, if it’s successful, it will be the most important as well.”

Things have changed a bit since then — new CEO, for example — but the basic premise remains unchanged. If you’re interested, I’ve reposted the entire column here.

* Bill Clinton is cutting ties with Ron Burkle, in order to “protect” Hillary’s campaign. That means he’s quit as a senior advisor to Yucaipa Cos., but it’s unclear what he’s done with any equity stake he might hold.

* Is it just me, or have there been a lot of VC-backed companies closing their doors lately? Almost enough for F*ckedCompany to be revived… The latest is Zingdom (fka Convoq), which made software to enable online meetings. Around $30 million from Bay Partners, North Bridge Venture Partners and Polaris Venture Partners. Company co-founder Christopher Herot writes a detailed obit.

Top Three

Regency Energy Partners LP (Nasdaq: RGNC) has agreed to acquire CDM Resource Partners LP, a Houston, Texas-based provider of turnkey natural gas contract compression services. The deal is valued at $655 million. CDM is currently in registration for an IPO, but is expected to withdraw the filing. It is owned by management and Carlyle/Riverstone Global Energy & Power Fund II.

MedAssets Inc., an Alpharetta, Ga.-based provider of software to improve operating margin and cashflow for hospitals and health systems, raised $212.8 million in its IPO. The company priced 13.3 million common shares at $16 per share ($14-$16 range), for an initial market cap of approximately $685 million. It will to trade on the Nasdaq under ticker symbol MDAS, while Morgan Stanley and Lehman Brothers served as co-lead underwriters. MedAssets shareholders include Galen Partners (15.7% post-IPO stake), Parthenon Capital (12.6%) and Grotech Capital Group (6.5%).

Ynon Kreiz has resigned as a partner of London-based VC firm Balderton Capital. No reason was given for the move, which also includes Kreiz’s resignation from his portfolio company boards.

VC Deals

Fovea Pharmaceuticals SA, a Paris, France–based drug company focused on ophthalmic diseases, has raised €30 million in Series B funding. Forbion Capital Partners led the round, and was joined by return backers Sofinnova Partners, Abingworth, GIMV, The Wellcome Trust and CAPE.

Intelleflex Corp., a San Jose, Calif.-based RFID company, has raised $15.5 million in Series C funding. Arcapita Ventures and Motorola Ventures co-led the round, and were joined by return backers Morgenthaler Ventures, Woodside Fund, Alloy Ventures, and Selby Venture Partners.

NewsGator Technologies Inc., a Denver-based provider of content aggregation tools and services, has raised $12 million in Series E funding. Vista Ventures led the round, and was joined by return backers Mobius Venture Capital and Masthead Venture Partners. It had previously raised $18 million since 2004.

Mobile Posse, a McLean, Va.-based provider of mobile advertising and content solutions, has raised $10 million in Series B funding. SoftBank Capital led the round, and was joined by Court Square Ventures, Columbia Capital and individual angels.

Saladax Biomedical Inc., a Bethlehem, Pa.-based developer of chemotherapy monitoring assays, has raised $8.4 million in Series B funding. Life Sciences Greenhouse of Central Pennsylvania led the financing and was joined by Delaware Crossing Investor Group and undisclosed U.S. European backers.

Jobvite, a San Francisco-based provider of on-demand recruitment solutions, has raised $7.2 million in Series A funding. CMEA Ventures led the round.

Buyout Deals

Advent International has acquired a 70% stake in Ceramica Iasi, a Romanian maker of ceramic bricks and clay roof tiles. The deal was valued at €35 million, including new investment. Advent said that it is bringing in new senior management, including CEO Iulian Mangalagiu (previously with Henkel and Rigips).

Bain Capital Ventures and Shamrock Capital Growth Fund have acquired Publishing Group of America, a Franklin, Tenn.-based publisher of magazine inserts for community newspapers. No financial terms were disclosed.

Burrill & Co. has reacquired Burrill Life Sciences Media Group, including The Journal of Life Sciences, from Nielson Business Media. No financial terms were disclosed.

Clear Channel Communications (NYSE: CCU) has agreed to extend its merger agreement termination date to June 12, 2008. The company agreed earlier in the year to be acquired for $19.5 billion by Bain Capital and Thomas H. Lee Partners.

Genstar Capital has completed its $797 million acquisition of clinical research organization PRA International (Nasdaq: PRAI). PRA stockholders will receive $30.50 per share in cash under terms of the agreement, which was first announced in July. PRA will cease trading on the Nasdaq at market close today.

Trivest Partners has acquired DirectBuy Inc., a franchisor of membership-based consumer buying centers in North America. No financial terms were disclosed, except that Allied Capital invested $83 million to help finance the deal.

PE-Backed IPOs

K12 Inc., a Herndon, Va.-based provider of online education curricula and learning programs, raised $108 million in its IPO. The company priced six million common shares at $18 per share ($16-$18 range), for an initial market cap of approximately $490 million. It will trade on the NYSE under ticker symbol LRN, while Morgan Stanley and Credit Suisse served as co-lead underwriters. It has raised around $45 million in VC funding, from firms like Constellation Ventures.

PE Exits

Crown, an Australian casino company, has agreed to buy Cannery Casino Resorts LLC, which operates three casinos in Las Vegas. The deal is valued at $1.75 billion, with sellers including Oaktree Capital Management and Millennium Gaming Inc.

Microsoft Corp. has acquired Multimap Ltd., a London-based online mapping company. No financial terms were disclosed. Multimap had raised a small amount of VC funding from groups like Telewest and Infotech Enterprises.

PE-Backed M&A

NCO Group Inc., a Horsham, Penn.–based provider of business process outsourcing services, has agreed to acquire Chesterfield, Mo.–based Outsourcing Solutions Inc. The deal is valued at $325 million in cash, and is expected to close in Q1 2008. NCO is a portfolio company of One Equity Partners, while OSI shareholders include Gryphon Partners.

Parques Reunidos, a portfolio company of Candover, has agreed to buy the amusement park holdings of family-owned Kennywood Entertainment. No financial terms were disclosed for the deal, which includes parks in Pennsylvania, Connecticut and New Hampshire.

Firms & Funds

Liquid Realty Partners has closed its fourth real estate secondaries fund with $572.3 million in capital commitments.

Human Resources

Steven Kwok has been named head of an Asian private equity joint venture of Bear Stearns and Eagle Investment Group. He previously was with Orchid Asia and, before that, was head of UBS Capital Greater China. The joint venture was announced earlier this year, with Bear Stearns and Eagle each committing up to $250 million.

Third Rock Ventures, a Boston-based VC firm focused on life sciences, has named one new partner and two venture partners. The partner is Cary Pfeffer, founder of The Pfeffer Group and former Biogen executive. The venture partners are Neil Exter, former chief business officer of Alantos Pharmaceuticals, and Craig Muir, former senior VP of tech ops for Codon Devices. Third rock also hired recent Harvard biz School grad Jake Bauer as a senior associate.

Matt Holleran has joined Emergence Capital Partners as an entrepreneur-in-residence. He previously led the AppExchange partner ecosystem at, and will focus on software-as-a-service opportunities.