PE Week Wire: Thurs., Sept. 6, 2007

I had planned to be in Washington today for the carried interest tax hearings, but then the House and Senate scheduled their meetings at the exact same time (albeit in different rooms). So I felt it would be best to stay home, watch some live feeds online and live-blog over at peHUB.

So you can keep up-to-date with what’s going on right here. Make sure to keep checking back throughout the day – both at that link and at the main site. For example, I’ll be posting written testimony of several witnesses once the House hearing is convened (I’ve read them – nothing shocking). Also, feel encouraged to submit your comments.

In the meantime:

Thomson Financial has released detailed August M&A and capital markets data. Let’s just say it was a slow month…

Some readers took issue with my characterization of Leo Hindery, who will be testifying at today’s House hearing. My partial apologies.

Venture Capital Journal suggests that VC investing in social networking might be best described as mass hysteria.

Cleantech blogger and fulltime VC Rob Day got bought (in a good way).

Where is Henry Kravis?

Craig Jones of Ticonderoga Capital gives his two cents on carried interest taxation.

Top Three

The Carlyle Group has closed its third European buyout fund with $7 billion in capital commitments. The firm’s first European buyout fund closed in 1998 with €1 billion, while its next one closed on €1.8 billion in 2005. It has invested €3.7 billion to date in European buyouts, and returned €7.2 billion to limited partners. As of today, Carlyle manages 55 active funds with $75.6 billion in commitments.

Shamrock Holdings has terminated its agreement to acquire AVP Inc. (OTC BB: AVPI), a Los Angeles-based lifestyle sports entertainment company focused on professional beach volleyball. The mutual decision came after AVP shareholder AmTrust Capital Management (22.8%) said that it would vote against the transaction. The total deal was valued at approximately $36.9 million, with Shamrock stockholders to receive $1.23 per share. Jefferies & Co. had been advising AVP on the deal.

Claude Lamoureux will retire as president and CEO of the Ontario Teachers’ Pension Plan at the end of 2007. He will be succeeded by Jim Leech, who currently runs Teachers’ Private Capital, the system’s private equity arm. Leech’s successor has not yet been named.

VC Deals

Atritech Inc., a Minneapolis-based developer of minimally-invasive technologies for the prevention of atrial fibrillation related stroke, has raised $22 million in Series D funding. SightlLine Partners led the deal, and was joined by fellow return backers like Prism VentureWorks, Split Rock Partners, Tullis-Dickerson, Thoma Cressey Bravo and Affinity Capital Management. The company has raised over $62 million in total VC funding since 2000.

XMOS Semiconductor, a Bristol, England-maker of “software-defined silicon” chips, has raised $16 million in Series A funding. Foundation Capital led the deal, and was joined by XMOS seed backers Amadeus Capital Partners and DFJ Esprit.

SupplyScape Inc., a Cambridge, Mass.-based provider of pharmaceutical supply chain software, has raised $10 million in Series C funding. Return backers include North Bridge Venture Partners, IDG Ventures Boston, Pilot House Ventures, Bethesda Partners and Pfizer Strategic Investments Group.

Netviewer, a German–based provider of web conferencing services, has raised €9 million in new VC funding from Invision Private Equity and TVM Capital.

Nexstim Ltd., a Helsinki, Finland-based medical device company focused on brain diagnostics and therapy technologies, has raised €8 million in new VC funding. HealthCap led the deal, and was joined by Life Sciences Partners, Finnish Industry Investment Ltd. and return backer Sitra.

MyPublisher, a New York-based provider of online photo books and other design software for digital photographers, has raised $8.9 million in new VC funding. Mousse Partners led the deal, and was joined by Jerome York, Ward Woods and return backers Novestra, Thorpe McKenzie, W.B. Avery and company founder Carl Navarre.

Infobright Inc., a Toronto-based provider of data warehousing solutions, has raised US$8 million in Series B funding. IDG Ventures Boston led the deal, and was joined by return backer RBC Technology Ventures. Chip Hazard of IDG will join the Infoobright board of directors.

Tioga Energy Inc., a Sunnyvale, Calif.–based provider of solar power purchasing services, has raised an additional $4 million in Series A funding led by Nth Power. The round is now closed with just over $14 million, including capital from NGEN Partners, Draper Fisher Jurvetson, Rockport Capital, DFJ Frontier and Kirlan Ventures. Tioga is basically a restart of CerOx Corp., which closed earlier this year after having raised around $15 million over two rounds.

Cyntellect Inc., a San Diego-based developer of laser-based live-cell manipulation technology, has raised $3 million in additional Series D funding. The round now stands at $18.1 million, with an investor option to commit an additional $10.3 million. Bru Venture Capital was the sole participant on the new tranche, while past backers include Third Security LLC.

Lectus Therapeutics Ltd., a Cambridge, UK-based drug company focused on ion channel modulators, has raised £3 million from the Wellcome Trust.

Groove Mobile Inc., a Bedford, Mass.–based provider of mobile music services, has raised $6 million in private funding from Orix Venture Finance. The company has now raised $32 million in total funding, from firms like Charles River Ventures, SVM Star Ventures, Egan-Managed Capital and Kodiak Venture Partners.

Emporis, a German operator of an international database about buildings, construction and real estate, has raised an undisclosed amount of VC funding from Newhaud Partners and KfW Bankengruppe.

Ideaworks3D Ltd., a London–based provider of mobile gaming technology, has raised an undisclosed amount of VC funding from Japan Asia Investment Co. (JAIC).

Buyout Deals

Biomet Inc. (Nasdaq: BMET) shareholders have approved a $46 per share — or $11.4 billion — buyout offer from a private equity consortium that includes The Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co. and TPG. Biomet manufactures products used by musculoskeletal medical specialists in both surgical and non-surgical therapy.

MC Shipping Inc. (AMEX: MCX) shareholders have approved a $14.25 per share buyout offer from Bear Stearns Merchant Banking. The total deal is valued at $284 million. MC Shipping is an international shipping company focused on maritime transportation of liquefied petroleum gas, with headquarters in Monaco and an office in London. It partially owns and operates a fleet of 19 vessels, and has contracted to purchase 4 others.

Audax Group has acquired Thermon Industries Inc., a San Marcos, Texas-based manufacturer of heat-tracing equipment for the energy industry. No financial terms were disclosed. JP Morgan Securities advised Thermon on the deal. GSO Capital and CIT Commercial & Industrial provided leveraged financing.

Insight Equity has completed its $160.2 million acquisition of Elkhart, Ind.-based Attwood Mobile Products from Dura Automotive Systems Inc.

The Riverside Co. has sold ACT Test Panels Inc., a Hillside, Mich.-based supplier of paint test panels for the automotive industry, to Talon LLC. No financial terms were disclosed, although Riverside said the sale produced a 3.8x cash-on-cash return and 72% gross IRR.

Sentinel Capital Partners has agreed to re-acquire Canadian yarn maker Spinrite Income Fund (TSX: SNF.UN), after having taken Spinrite public two years ago. The deal is worth nearly Cn$81 million, including Cn$35 million in assumed debt. Spinrite unit holders would receive Cn$2.25 per unit.

PE-Backed IPOs

Rubicon Technology Inc., a Franklin Park, Ill.-based maker of monocrystalline sapphire and other crystalline products, has filed for a $100 million IPO. It plans to trade on the Nasdaq under ticker symbol RBCN, with UBS serving as lead underwriter. Rubicon has raised nearly $44 million in VC funding since 2001, from firms like Cross Atlantic Capital Partners, Gazelle TechVentures, KB Partners and River Cities Capital Funds.

NovaCardia Inc., a San Diego-based drug company focused on cardiovascular disease, has withdrawn registration for an $86.25 million IPO. The move was expected, based on a recent announcement that NovaCardia would be acquired by Merck & Co. (NYSE: MRK) for approximately $350 million. NovaCardia had raised nearly around $88 million in VC funding since its 2001 formation, from firms like Domain Associates (24.9% stake), Forward Ventures (15.6%), InterWest Partners (10.4%), Skyline Venture Partners (15.3%), Versant Ventures (13.6%) and Montreaux Equity Partners (12.5%).

PE Exits

Canadian Pacific Railway Ltd. has agreed to acquire the Dakota Minnesota and Eastern Railroad Corp. (DME), a portfolio company of Lombard Investments. The deal is valued at up to $2.48 billion, including a $1.48 billion up-front cash payment and another $1 billion in payments contingent on the development of a major rail line linking the DM&E to the Wyoming Powder River Basin coal deposits. Lombard led a $34 million buyout of DME back in 1986.

Digital River Inc. (Nasdaq: DRIV) has acquired Netgiro Systems AB, a Sweden-based provider of global card payment services to e-merchants. The deal was valued at approximately $27 million in cash. Netgiro had raised VC funding from Nordic Venture Partners.

Telanetix Inc. (OTC BB: TNXI) has agreed to acquire AccessLine Communications, a Bellevue, Wash.–based provider of hosted VoIP services to small and mid-sized businesses. The deal is valued at $34.9 million in cash and stock. AccessLine had raised over $126 million in total VC funding since 1994, from firms like Mellon Ventures, Gabriel Venture Partners, Goldman Sachs, Alexander Hutton Venture Partners and Venrock.

Firms & Funds

Lehman Brothers and the State of New Jersey have formed a $105 million private equity fund, focused on investments that will help “drive economic growth” in New Jersey. It is called the New Jersey Direct Investment Fund, with Lehman serving as GP and the state serving as the primary LP.

Morgan Stanley Venture Partners (a.k.a. Crossmark Capital) has canceled plans to raise a $300 million fund, and will instead shut down. News of the move was first reported by Private Equity Insider.

SPG Partners has closed its debut fund with $620 million in capital commitments. The New York-based firm will focus on middle-market investments, and was founded by Ian Snow and Ogden Phipps. The firm also features seven operating partners, including Jim Amos (former CEO of Mail Boxes Etc.), Paul Chellgren (former CEO of Ashland Inc.), Andrew Megibow (former COO of Ellen Tracy), Halsey Minor (former CEO of CNET Networks), Joy Schafer (former CEO of WFS Financial), Leif Soderberg (former CSO of Motorola) and Jay Twombly (former president of SPX’s Edwards Systems Tech division).

Human Resources

Lim Meng Ann has joined Actis as a partner in charge of activities in China. Meng Ann previously was an executive vice president with GIC Special Investments, where he was responsible for China. Actis has invested over $100 million in China over the past year.

Ezra Field is joining Roark Capital as a managing director, according to LBO Wire. He previously was with ACI Capital Co.

Simon Hirtzel has joined European venture debt firm Kreos Capital as chief operating officer. He previously was with PA Consulting Group, where he most recently served as CFO.

Henry Jennings and Matthew McFall have joined Lockton Cos., as members of its Private Equity Client Advisory practice. Jennings will be a London-based senior vice president and global practice leader, after previously having served in similar positions with Integro and Aon’s M&A group. McFall will work out of San Francisco, and previously was with Diversified Risk Insurance Brokers.

Georges Terrier and Christophe Perchet have joined the French law practice of Davis Polk & Wardwell, as partners. Both men previously were attorneys with Jeantet, and focus on M&A transactions and other corporate work.