*** Remember the good ole’ days, when PE firms would agree to buy a company for $30 per share, and then it would trade around $35 per share? Visions of activist shareholders dancing in daytrader heads…
Well that time is gone, judging by the spreads on pending “take-private” transactions. peHUB has compiled a list of 26 such deals with private equity sponsors, and not one is trading above its sale price as of yesterday’s market close. The widest spread by percentage is 54.76% per share for Goldman Sachs/Myers Industries, while the widest by dollars is $21.46 per share for Alliance Data/Blackstone.
You can download the full chart here.
Also, Steven Davidoff at Dealbook has some thoughtful insights into some of the deal-by-deal spread issues, and some overall analysis. For example, he notes that sponsor reputation no longer seems to matter: “Apollo Management has yet to walk on a deal, but the market seems to give them no credit for that in the Huntsman/Hexion transaction (Hexion is a portfolio company of Apollo). It is the same for Penn Gaming and Fortress.”
*** It’s January 24, and we’ve yet to see a single PE-backed or VC-backed IPO in 2008. But we’ve certainly seen plenty of pulled or postponed deals. The latest are BG Medicine and Tommy Hilfiger.
*** Both private equity and venture capital provided strong returns for college and university endowments in 2006 and 2007, according to new survey results compiled by TIAA-CREF and the National Association of College and University Business Officers. The study includes data from 785 institutions in the U.S. and Canada, covering $411.2 billion in endowment assets.
It found that the average private equity return in 2007 was 19.8%, which was up from 17.9% in 2006. Average venture capital returns rose to 15% in 2007 from 10.2% in 2006. Both private equity and venture capital outperformed hedge funds and real estate in 2007, but underperformed non-U.S. equities. It was a mixed bag when compared to U.S. equities, with private equity just above and venture capital well below. Full details are available here.
*** Jeff Bussgang of IDG Ventures Boston asks Who’s Afraid of a Big Bad Recession?
*** The Private Equity Council sponsored a study on job creation/destruction at PE-backed companies. Guess what the results said… Less biased survey results on PE employment are coming tomorrow in Davos, courtesy of Steve Davis (U Chicago) and Josh Lerner (Harvard).
*** Does Blackstone have a coal problem?
*** VCMike with some background on how Polaris originally got involved with WordPress creator Automattic. Did Om Malik get a finder’s fee? Also, a correction: Polaris led yesterday’s Series B round, not the NY Times Co.
*** Societe General uncovers $7.14 billion in fraud. And it’s all traced back to a single futures trader.
Top Three
Biffa, a listed UK industrial waste disposal company, said that it would accept a $2.4 billion buyout offer from Montagu Private Equity and Global Infrastructure Partners (joint venture between Credit Suisse and GE). The decision effectively knocked rival suitor HgCapital out of the process.
Paine & Partners (f.k.a. Fox Paine & Co.) has sponsored a management buyout of the hedge fund sponsorship business of Capital Z Investment Partners. No financial terms were disclosed.
Ciena Corp. (Nasdaq: CIEN) has agreed to acquire World Wide Packets, a Spokane Valley, Wash.-based maker of Ethernet access products. The deal is valued at approximately $290 million, including $200 million in cash and 3.4 million shares of Ciena common stock. Goldman Sachs advised World Wide Packets on the deal, while Ciena was advised by Morgan Stanley. World Wide Packets has raised around $130 million in total VC funding since 2001, from firms like Azure Capital Partners, Northwest Venture Associates, Madrona Venture Group, Telesystem-Argo Global Capital and Entrepia Ventures.
VC Deals
Endotis Pharma, a French developer of small-glyco drugs for applications in thrombosis and oncology, has raised €25 million in Series B funding. The Wellcome Trust led the round, and was joined by Endeavour vision, NIF SMBC Ventures and return backers Sofinnova Partners. www.endotis.com
Aladdin Media Holdings, a China-focused outdoor media investment company, has raised $30 million in growth equity funding. Credit Suisse Private Equity Asia led the deal, and was joined by AIF Capital, Alcazar Capital and return backer OSK Ventures International. Company management also participated.
Inform Technologies, a New York-based provider of technology solutions for online content providers, has raised $15 million from Spark Capital.
Fresco Microchip Inc., a Toronto-based developer of RF, mixed-signal and digital signal processing ICs, has raised US$13.3 million in Series B funding. Celtic House and Ventures West co-led the round.
Endeca Technologies Inc., a Cambridge, Mass.-based provider of search and information access software, has raised $10 million from Intel Capital and another $5 million from SAP Ventures. The company previously raised around $45 million from Bessemer Venture Partners, Lehman Brothers, Ampersand Ventures, Venrock, Monarch Capital Partners, DN Capital and Granite Global Ventures. www.endeca.com
Box.net, a Palo Alto, Calif.-based provider of an online filing system, has raised $6 million in Series B funding. U.S. Venture Partners led the round, and was joined by return backer Draper Fisher Jurvetson.
ProVision Communications, a Bristol, England-based provider of digital wireless video technology, has raised £750,000 in VC funding from South West Venture Fund, Finance South West Growth Fund and NESTA Investments.
Signature Genomic Laboratories, a Spokane, Wash.-based provider of molecular cytogenetic diagnostic services, has raised an undisclosed amount of funding from Ampersand Ventures.
Buyout Deals
CapMan has agreed to acquire Varesvuo Partners Oy, a Finnish television content and commercial film production company, from Talentum. The deal is valued at €11 million, and includes participation by company management.
Paul Capital Healthcare has purchased all royalties on worldwide sales of Rotarix, from the Cincinnati Children’s Hospital Medical Center. No financial terms were disclosed. Rotarix is an oral vaccine developed to prevent rotavirus infection, a contagious viral disease that causes diarrhea and dehydration in infants and young children.
PE-Backed IPOs
Accuro Healthcare Solutions Inc., a Dallas-based provider of financial and operational solutions for healthcare providers, has filed for a $143.75 million IPO. It plans to trade on the Nasdaq under ticker symbol ACCU, with Citi serving as lead underwriter. Accuro is controlled by Welsh, Carson, Anderson & Stowe (79.94% pre-IPO stake). www.accurohealth.com
Apax Partners has shelved a Euronext IPO for U.S. fashion house Tommy Hilfiger, due to volatile market conditions. The offering had been expected to value Hilfiger at between $2.5 billion and $3.5 billion, including around $1 billion in debt.
BG Medicine Inc., a Waltham, Mass.-based developer of molecular diagnostics based on biomarkers, has withdrawn its IPO registration, citing “unfavorable market conditions.” The company originally planned to raise up to $72 million, but later lowered its high mark to $45 million. Cowen & Co. was serving as lead underwriter. BG Medicine has raised around $37 million in VC funding since 2000, from firms like Flagship Ventures (57.5% pre-IPO stake), Gilde Investment Management (17.4%) and Koniklijke Philips Electronics (8%). www.beyondgenomics.com
CDM Resource Partners LP, a Houston, Texas-based provider of turnkey natural gas contract compression services, has withdrawn its IPO registration. The moves comes after the company was bought by Regency Energy Partners for $655 million fromCarlyle/Riverstone Global Energy & Power Fund II.
PE Exits
Audax Group has sold Kurt Versen Co. to Hubbell Inc. (NYSE: HUB) for an undisclosed amount. Kurt Versen is a Westwood, N.Y.-based maker of recessed downlighting for commercial applications, and was acquired by Audax in May 2005. Edgeview Partners represented Kurt Versen on the sale. www.kurtversen.com
PE-Backed M&A
Questex Media Group Inc., a Newton, Mass.-based B2B media company owned by Audax Group, has acquired FierceMarkets, an online B2B media company. No financial terms were disclosed. Jordan, Edmiston Group advised FierceMarkets on the deal. www.questex.com
Firms & Funds
CapMan has raised €142.3 million for a new fund focused on expansion and later-stage technology companies in the Nordic region. It already has four portfolio companies: Mawell Oy, a Finnish supplier of ICT solutions to the healthcare sector; KMW Energi AB, a Swedish manufacturer of biofuel plants; Movial Applications Oy, a Finnish developer of IP communications software; and IT2 Holding ApS, a Danish developer of software for the financial sector.
Human Resources
Advent International has made 17 promotions. Among them were: Dave McKenna (Boston) to managing partner, Chuck Mruck (Prague) to managing partner, Guillaume Darbon (Paris) to managing director and Rory Pope (Tokyo) to managing director.
Van Walbridge and Walter Stasik have joined Blue Wolf Capital as operating partners, while Andrew Schwartz has joined as an associate. Walbridge is the former CEO of specialty vehicle maker Mobile Tool International. Stasik is CEO of capital goods manufacturer Genesis Worldwide II, while Schwartz was withy JPMorgan Securities. Blue Wolf also has formed a strategic advisory board.
Grotech Capital Group has promoted Charles Cullen and Stephen Frederick to general partner. Cullen joined the firm in 2000 as a vice president, and in June 2006 assumed the responsibilities of CFO. Frederick joined as a vice president in 2005, and focuses on IT and communications sector opportunities.
Tom Caputo, Ken Ebbitt and Dharmesh Thakker have joined Advanced Technology Ventures as senior associates. Caputo previously was with Microsoft as group product manager for Windows. Ebbitt was a senior product marketing manager at PayPal, in charge of global checkout solutions for the company on eBay. Thakker was director of corporate development at Keynote Systems.
Michael Salgaller has joined biotech company Calibrant Biosystems as chief operating officer. He previously was a senior associate with Toucan Capital. www.calibrant.com
Ray Nunez has joined American River Ventures as chief financial officer. He previously was director of finance for law firm McDonough Holland & Allen PC.
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