PE Week Wire: Thurs., Jan. 3, 2008

I spoke yesterday with Martin Tobias, who late last month quit as chairman and CEO of Seattle-based biodiesel producer Imperium Renewables. He was at his condo in Hawaii, and seemed to be nursing a cold (too much surfing, perhaps?). Tobias said that he and the Imperium board had been in discussions for several months about his transitioning into a senior advisor role, because his “career is to get into a company at inception, attract early capital, grow the company to a good size and then hand it off – I’m not the guy who operates a large multinational.”

He added that now was the right time to leave, as Imperium had decided to cancel a $345 million IPO that it had filed for back in May. The blame goes to market conditions for biofuel offerings, which is legit given the lousy reception for ethanol plays like Aventine and VersaSun.

But something still doesn’t quite wash. Tobias went from CEO to unemployed immediately, without any sort of transition period. The company then promoted its president to interim CEO, and named one of its VCs as chairman. Moreover, Imperium announced the move on the Friday before Christmas, with a statement that included less than 50 relevant words. None of them included the standard: “We would like to thank Martin Tobias for his valuable contributions…?”

A lot of folks – me included – had expected that Tobias would eventually turn over the leadership reins, but this comes across as anything but an ordered process. Instead, it reads like a major blowup – which could be either strategic or personal. I put the question to Tobias, who would only say: “Your job as the press is to make those kind of speculations, but I don’t comment on speculation.”

More info as it comes in…

*** The Sevin Rosen split is complete, with the firm’s Silicon Valley team now referred to as “partners emeriti” on its website. As I wrote long, long ago – Sevin Rosen might have believed its own claim that the VC model is broken, but its decision to suspend fundraising also had a lot to do with broken structure within the firm itself.

VentureWire is reporting that partner emeritus Nick Sturiale is joining Carlyle Venture Partners. He’s the guy who did Xensource, which was the Valley office’s largest exit in some time. No word yet on the plans of Steve Dow, Steve Dominik or John Oxxal.

*** Just some idle speculation on the PHH buyout collapse: Reports are that the buyers had difficulty arranging financing, in part, because banks didn’t want to lend to a mortgage company. But mortgage is only one part of PHH, and GE was planning to spin off the other piece, which is fleet management services. Might GE not return to the table on its own?

*** I posted more detailed data on 2007 venture capital investing. Looks like New England will indeed trail Southern California.

*** For Canadian TV viewers: I’ll be on BNN tonight at 5:30pm ET, to discuss the 2008 M&A outlook.

Top Three, a Norwalk, Conn.–based meta search engine for travel, has raised $196 million in new funding ($166m equity, $30m debt). The infusion will be used to complete a merger with rival Sidestep, which itself had raised over $30 million in VC funding. Deal participants included existing Kayak backers Sequoia Capital, General Catalyst Partners and Accel Partners, plus Sidestep investors Norwest Venture Partners and Trident Capital. It also included new backers Oak Investment Partners and Lehman Brothers Venture Partners. Debt was provided by Silicon Valley Bank and Gold Hill Capital. Kayak had previously raised $27 million since 2004.

Bain Capital completed its sale of Dutch coatings company SigmaKalon Group to PPG Industries (NYSE: PPG) for approximately €2.2 billion, including assumed debt. SigmaKalon was created in 1999 from the merger of Total’s Kalon Group and PetroFina’s Sigma Coatings, and was acquired by Bain in 2003. Sales have increased from approximately €1.7 billion in 2003 to approximately €2 billion in 2006.

Crestview Partners of New York has raised $1.7 billion billion for its second fund, which is expected to hold a final close later this year with more than $2 billion, peHUB has learned.

VC Deals

Boston-Power Inc., a Westborough, Mass.-based provider of portable power solutions, has raised $45 million in Series C funding. Oak Investment Partners led the round, and was joined by return backers Venrock, Granite Global Ventures and Gabriel Venture Partners. The company has now raised more than $68 million in total funding, including a $15.6 million Series B round in late 2006 at a post-money valuation of approximately $60.6 million.

Chelsio Communications Inc., a Sunnyvale, Calif.-based provider of 10-gigabit Ethernet unified wire solutions, has raised $25 million in Series E funding. Investor Growth Capital led the round, and was joined by return backers New Enterprise Associates, INVESCO Private Capital, LSI Logic Corporation, Hotung Capital Management, Abacus Capital Group, Pacesetter Capital Group and Horizon Ventures. Chelsio has now raised around $84 million in total VC funding since 2001.

Gelesis Inc., a Boston-based developer of obesity therapeutics, has raised $16 million in its first round of institutional funding. OrbiMed Advisors led the deal, and was joined by Queensland BioCapital and return backers like PureTech Ventures. Get more info.

SugarCRM, a Cupertino, Calif.-based provider of open-source customer relationship management software, has secured $14.5 million of a $20 million Series D round, according to a regulatory filing. No new investors are listed, but return backers include Draper Fisher Jurvetson, New Enterprise Associates and Walden International. It had previously raised around $26.5 million.

Tempo Pharmaceuticals, a Cambridge, Mass.-based developer of nanopartical-based drugs, has raised $8.1 million in Series B funding. Bessemer Venture Partners was joined by return backers Polaris Venture Partners, Venrock and Lux Capital.

Tamarac Inc., a Seattle-based provider of financial portfolio management software, has secured $7.17 million of a $10.45 million Series A round, according to a regulatory filing. Backers include Optimal Ventures.

Calistoga Pharmaceuticals Inc., a Seattle-based drug development startup focused on oncology and inflammation, has raised $5.2 million in additional Series A funding, raising the round total to $26.2 million. Return backers included Frazier Healthcare Ventures, Alta Partners, Three Arch Partners and Amgen Ventures. Get more info.

BetNow, a London-based mobile betting startup, has raised around $5 million in first-round funding from Balderton Capital (f.k.a. Benchmark Capital Europe). The company’s service will allow gamblers to place bets via text message, with the actual wagers charged to phone bills. Winnings can be picked up at local post offices.

5min, a provider of online instructional videos, has raised $5 million in Series A funding from Spark Capital. The company is currently based in Tel Aviv, but will relocate to New York.

PeerApp Ltd., a Newton, Mass.-based provider of P2P infrastructure solutions, has raised $3 million in new VC funding, according to a regulatory filing. Backers include Pilot House Ventures, Evergreen and Cedar Fund. The company’s board includes Peter Bell of Highland Capital Partners.

Dmailer, a Marseille, France-based provider of portable back up and synchronization software solutions for mobile devices, has raised €2.5 million in VC funding from BNP Paribas Private Equity and Alto Invest.

Buyout Deals

Sun Capital Partners has acquired Mark IV Industries Inc. from BC Partners for an undisclosed amount. Mark IV is a –based manufacturer of highly-engineered systems and components for the worldwide automotive OEM market. It has offices in Amherst, N.Y. and Italy.

American Capital Strategies has agreed to buy Ranpak, a Concord Township, Ohio-based maker of paper protective packaging materials, to Odyssey Investment Partners, according to LBO Wire. The report places the price tag at north of $400 million.

PE-Backed IPOs

Imperium Renewables Inc., a Seattle-based biodeisel producer, has withdrawn registration for a $345 million IPO. It had filed back in May, with Morgan Stanley and Lehman Brothers serving as co-lead underwriters. Imperium has raised around $240 million in VC funding from such firms as Nth Power, Technology Partners, Vulcan Capital, BlackRock Investment Management, Capricorn Management and Silver Point Capital.

PE Exits

Allscripts (Nasdaq: MDRX) has acquired Extended Care Information Network, a Chicago–based provider of hospital care management and discharge planning software. The deal was valued at approximately $90 million in cash. ECIN had raised around $28.5 million in VC funding from firms like Chicago Growth Partners, Tenet Healthcare Corp., Gamma Investors, The Edgewater Funds and Saints Ventures.

Landmark Communications is putting The Weather Channel up for sale, according to The New York Times. The controlling Batten family has retained JPMorgan to run the auction, and is looking for bids in the range of $5 billion. Landmark also has retained Lehman Brothers to advise on the sale of other media assets.

Middleby Corp. (Nasdaq: MIDD) has completed its $188 million acquisition of New Star Holdings International Inc. from Weston Presidio and Beechtree Capital Partners. New Star is a St. Louis-based manufacturer of commercial foodservice equipment, and is being advised on the transaction by Harris Williams & Co.

Nokia Siemens Networks has agreed to acquire Apertio Ltd., a UK-based provider of open real-time subscriber data platforms and applications for telecom operators. The deal is valued at around 140 million, and is expected to close later this quarter. Apertio has raised around $46 million in VC funding from firms like Add Partners, Eden Ventures, Motorola Ventures, Deutsche Venture Capital and T-Venture.

Plaxo Inc., a Mountain View, Calif.-based social networking company that helps users keep their online address books updated, has retained Revolution Partners to advise on a possible sale, according to The New York Times. The asking price is upwards of $100 million. Plaxo has raised around $23 million in VC funding since 2002, from firms like Sequoia Capital, Globespan Capital Partners, DAG Ventures, Cisco Systems and Harbinger Venture Management.

Sun Capital Partners has sold inorganic chemicals maker Searles Valley to Nirma Ltd., a producer of synthetic soda ash. No financial terms were disclosed.

PE-Backed M&A

Phoenix Footwear Group Inc. (Amex: PXG) has sold its Altama military footwear division to Tactical Holdings Inc., a portfolio company of Golden Gate Capital. The deal is valued at approximately $15 million, and includes a short-term transition services agreement.

The Swett & Crawford Group Inc., an Atlanta-based wholesale insurance intermediary, has acquired Risk Reducers LLC, a Littlerock, Ark.-based wholesale insurance broker specializing in workers’ compensation. No financial terms were disclosed. Swett & Crawford is owned by HM Capital Partners, Banc of America Capital Investors and company employees.

Firms & Funds

Charlesbank Capital Partners has acquired a position in StoneCastle Partners, an asset management firm that invests in small and mid-sized banks. No financial terms were disclosed.

Crestview Partners, a New York-based middle-market firm, has raised $686 million for its second fund, according to a regulatory filing. Limited partners include Princeton University and the South Carolina Retirement Systems.

Quadrangle Debt Recovery Advisors has spun off from private equity firm Quadrangle Group, and has renamed itself Monarch Alternative Capital.

Temasek Holdings Ltd., an investment arm of the Singapore government, said in a regulatory filing that it currently holds a 9.4% stake in Merrill Lynch. Late last month, Merrill said it would sell a 9.9% stake to Temasek for $4.4 billion, plus an option to purchase an additional $600 million in stock.

Human Resources

Andrew Weisenfeld and Mark Epstein have joined MTS Health Partners as senior managing directors. Both men previously worked at Banc of America Securities: Weisenfeld as a managing director in the corporate and investment banking healthcare group, and Epstein as a managing director and co-head of the private equity placements team.