PE Week Wire — Thursday 2/20

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BattellePharma, a Columbus, Ohio-based pharmaceutical company focused on respiratory and systemic diseases, has completed a private placement of Series B Preferred Stock for $22 million. TL Ventures led the funding round that included new investors Merlin BioMed Group, Fletcher Spaght Ventures, Richardson Ventures Inc. and existing investor/incubator Battelle Memorial Institute. Lehman Brothers acted as exclusive placement agent on the transaction.

Williams Cos. (NYSE:WMB) announced today that it has signed a definitive agreement to sell its equity interest in Williams Bio-Energy LLC for approximately $75 million to a new company formed by Morgan Stanley Capital Partners. Williams Bio-Energy owns and operates an ethanol production plant in Pekin, Ill., holds a 78.4% interest in another plant in Aurora, Neb., and has various agreements to market ethanol from third-party plants. The transaction is expected to close in the second quarter, pending certain conditions. Banc of America Securities LLC advised Williams on the deal.

Descartes Therapeutics Inc., a Cambridge, Mass.-based startup focused on solutions to chronic pain, is nearing the completion of Series A funding led by Oxford Bioscience Partners. The company has close ties to both Mass. General Hospital and Harvard Medical School.

LifeHarbor Inc. ,a Cambridge, Mass.-based wealth management software firm, has closed $5.8 million in Series A venture funding, led by Bessemer Venture Partners. In addition to Bessemer, which contributed $3 million, existing seed investors Hub Angel Investment Group and WR Hambrecht + Co also participated.

The California State Teachers’ Retirement System (CalSTRS) has selected Cambridge Associates to be its alternatives investments advisor.

Bitfone Corp., a Cannes, France-based provider of over-the-air firmware update technology for mobile phones, today announced that it has secured a strategic investment from Orange Ventures. This investment will add to the $29.5 million funding from Nokia Venture Partners, St. Paul Venture Capital, 3i, Nexit Ventures and CIR Ventures.

RCN Corp. announced today that it had completed its previously-announced sale of its central New Jersey cable systems to Patriot Media & Communications CNJ LLC, a new company funded by Spectrum Equity Investors and long-time cable entrepreneur Steve Simmons, who will serve as Chairman and CEO. The approximately $245 million cash sale will give Patriot ownership of systems currently in operation in 31 communities in Somerset, Morris, Mercer and Hunterdon counties, serving approximately 80,000 subscribers. The incumbent system became part of RCN in October 1997 through a spinout from the former C-TEC Corp.

Permira has agreed to invest €220 million into Frankfurt-based pay-television station Premiere, which is a former unit of bankrupt media company Kirch. The deal gives Permira a 65.1% stake in Premiere, with bank creditors and Premiere management holding the rest.
Mass High Tech is reporting that Bedford, Mass.-based Arradial Inc. has been sold to Woburn, Mass.-based BioProcessors Corp. for an undisclosed amount of cash and stock. Arradial had raised $7 million from Oxford Bioscience Partners and the Boston University Community Technology Fund to develop an automated microfluidics drug delivery system, but failed in its efforts to secure additional capital. BioProcessors is also an Oxford portfolio company.

NEWS FROM WEDNESDAY 2/19
IceFyre Semiconductor Inc., an Ottawa-based semiconductor company focused on the wireless LAN market, has raised $19 million in a fourth round of venture capital funding. This latest deal, co-led by Motorola Ventures Covington Capital, included participation by TD Capital Technology Ventures and all existing investors: Prism Venture Partners, Kodiak Venture Partners, VenGrowth Capital and Business Development Bank of Canada, Ottawa, Ontario. The transaction included a post-money valuation of just under $40 million.

Jerusalem Global Ventures yesterday informed limited partners that it was cutting the size of future capital calls, and reducing its management fee. For more on this story, pick up the upcoming print edition of Private Equity Week.

Sourcefire Inc., a Columbia, Md.-based network security provider, has raised $11 million in Series B funding. The deal was led by New Enterprise Associates, also included Series A investors Sierra Ventures, Inflection Point Ventures and Core Capital Partners. The company closed its $7.55 million first round deal last summer.

NuCORE Technology Inc., a Sunnyvale, Calif.-based fabless semiconductor company for the still camera and digital imaging market, has secured $22 million in Series D funding led by Crosslink Capital. Existing investors Horizon Ventures, Jafco.Co. Ltd., Tokyo, Sigma Partners, Techfarm and VantagePoint Venture Partners all participated in the round. The company has now raised a total of $54 million.

Dorsey & Whitney LLP announced that it has nearly tripled its Orange County office with the hire of 18 attorneys formerly with Brobeck, Phleger & Harrison LLP. The roster of new attorneys includes seven partners who will continue their practices in the areas of litigation, labor and employment and business and technology. The partners include Patrick Arrington, John Baker, Ellen Bancroft, David Hayes, Kathlene Lowe, Scott Santagata and Gabrielle Wirth.

General Catalyst Partners has added Jeremy Allaire as a technologist-in-residence. Allaire was previously chief technology officer with Macromedia Inc.

Wysdom Inc., a Toronto-based provider of mobile network operating system software, has raised $5.1 million in third round financing. Investors included VenGrowth Capital Partners Inc. and Covington Capital.

Antero Resources Corp., a Denver-based oil and gas company, has secured a $260 million equity program led by Warburg Pincus LLC. Also involved on the deal are Yorktown Energy Partners V LP, Lehman Brothers Merchant Banking Group and the Antero Resources management team.

Atlas Venture has promoted Alexander Bruehl, Graham O’Keeffe and Timothy Wilson to Senior Principal, and Paul Pospisil to Principal. Europe-based Breuehl and O’Keeffe have been with Atlas since 1998, coming from R&O Software-Technik GmbH and Psion Computers, respectively. Wilson had been a senior managing director with Bear Stearns International before joining Atlas- London office last year. Pospisil focuses on life sciences out of Atlas’ Boston office, and joined last year after serving as director of strategy leadership at Millennium Pharmaceuticals.

RASilient Systems, a Cupertino, Calif.-based networked storage infrastructure company, today announced that it has secured $4 million in first round funding from Acorn Campus and the Intel Communications Fund.

Project Leadership Associates, a Chicago-based IT consultancy, has received a second round of outside investment funding from Navigator Equity Partners. No deal terms were disclosed.

Stanford Venture Capital Holdings Inc. has invested $2 million wirth of Series D convertible notes into Tangible Asset Galleries Inc. (Pink Sheets:TAGZ). Stanford now controls approximately 51% of the outstanding common shares on an “as converted basis,” after previously holding a 38% stake.
NEWS FROM TUESDAY 2/18
Only $7.16 billion was raised through 300 venture-backed M&A deals in 2002, according to new data being released today by Venture Economics (publisher of the PE Week Wire) and the National Venture Capital Association. This compares unfavorably to the $17.08 billion raised in 2001 and the $67.95 billion raised at the market’s 2000 peak. For more on this story, go to www.pewnews.com . Subscribers also can get a more detailed analysis in this week’s print edition.

Ikanos Communications Inc., a Fremong, Calif.-based chipmaker, has raised $30 million in its Series D round of venture funding. Existing investor Sequoia Capital led the deal, and was joined by fellow repeat backers Greylock Partners, Intel Capital, JPMorgan Partners, Presidio Venture Partners, Ridgewood Capital, Telesoft Partners, VentureTech Alliance (an affiliate of Taiwan Semiconductor Manufacturing Company) and Walden International. To date, the company has raised just over $82 million in venture capital. PE Week subscribers can read more of this story in the protected Deal News section of www.pewnews.com.

Radius Venture Partners has closed its second fund with $73.5 million. The New York-based firm’s fund, Radius Venture Partners II LP, will follow the path of its predecessor and focus on health and life science investments. PE Week subscribers can read more of this story in the protected Fund News section of www.pewnews.com.

Intersouth Partners, a Durham, N.C.-based venture capital firm, has closed its sixth fund with $205 million. The firm’s previous fund-raising effort added $175 million to Intersouth Partners’ coffers in 2000. Since 1985, it has raised more than $500 million and invested in more than 70 companies.

 

STSN, a Salt Lake City-based provider of high-speed data communications to hotels and conference centers, has secured $15 million in new financing. Investors included APV Technology Partners, Siemens Project Ventures and lead investor VantagePoint Venture Partners. The company also received an investment from Intel Communications Fund in December 2002 to finance the expansion of its WiFi (802.11 a/b) network.

Cariocas Inc., a San Francisco-based promotion platform provider, has raised $5.25 million in second round funding led by New Enterprise Associates and Odyssey, both current investors, as well as new investor Societe Generale Asset Management.

Robert Morff has taken over a chief executive officer at Ondine Biopharma Corp. Prior to joining the Vancouver-based company (which is currently looking for $5 million in Series A funding), Morff was a principal with Cincinnati-based venture firm Senmed Medical Ventures.

Michael Glassman has joined The Shattan Group as managing director of advisory services. He was most recently a managing director in the M&A group of J.P. Morgan Chase & Co. Also joining New York-based Shattan Group are Ivan Feinseth as director of new business development and David Koh as associate vice president. Feinseth was previously senior vice president in the private client group of Wachovia Securities, while Koh served as a senior associate in the global media and telecom group of Credit Suisse First Boston.

 

Barron’s is reporting that New York-based Amphion Ventures has written down the value of its venture investment portfolio to less than zero percent. According to the story, the value of Amphion’s portfolio stood at negative $818,281 by the end of 2002, after being at positive $91.8 million at the end of 2000. Lots of firms may have had bad years, but this one seems to take the cake.

The Salt Lake Tribune is reporting that Fraser Bullock, COO of the Salt Lake Olympic Organizing Committee, has opened a new private equity shop named Sorenson Capital. The group will focus on Utah-based companies.

 

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