One of my favorite memories from 2007 was the day I became a venture capitalist. Financial journalists are really no different from the sports reporters who secretly want to be sluggers.
My stint as a VC wasn’t quite like the Gary Snoman cartoon though. I didn’t fire any CEOs or ask them about India and China. No, I took on the role of a VC with the responsibility I imagine all the professionals I cover exercise every day. I smiled, I nodded and I wrote checks.
I invested in a handful of promising startups engaged in the design and manufacture of a unique product in an explosive emerging market that—I’m told—could be worth $10 billion by 2008: friendship bracelets.
Fortunately my investment wasn’t in real money and my “entrepreneurs” weren’t graduates of MIT or Stanford. They were just embarking on their educational journeys as fifth graders at the Carden El Encanto Day School in Santa Clara. And I was their BizWorld volunteer for the day.
The BizWorld program teaches kids about entrepreneurship and takes them through the process of product design, manufacturing, marketing and sales. They pitch their bracelet-making startups, raise capital and go to work.
Of course not all students are cut out to be entrepreneurs. Would be artists and future English majors are the first to snub their noses at the math-intensive world of business—until you explain how artists fit into the design functions of a business (Jonathan Ive) and the writers can persuade people to buy products (Leo Burnett). My class had a handful of burgeoning patent lawyers, design engineers and even corporate raiders.
At the end of the afternoon, we tallied up profits and stock outstanding. We determined which company had achieved higher profitability and why. (I won’t say that I returned 10x to my LPs, but I was a “top quartile” performer.)
Then we talked about what makes a good company. Good companies, they said, make good products that don’t hurt people, have financial success, treat their employees fairly and give back to the community. I couldn’t agree more.
As we come to the end of the year, many of your minds may be turned toward giving. Maybe it’s giving a gift, or giving your time, or giving the executive assistants and associate at your firm a bonus. Maybe you’d like to give something to the readers of this Wire: one good anecdote or suggestion of how to donate their time and or well-earned returns in 2008. You can give me your thoughts directly at the email address below, or post them yourself to PEHub.com.
alex.haislip@thomson.com
Top Three
Coates Hire’s shareholders have approved the $2.9 billion takeover offer from US private equity firm Carlyle Group. The Australian Financial Review reported that the deal for the equipment rental company represents Australia’s biggest-ever leveraged buyout of a publicly-listed company. Coates shareholders are set to receive $6.06 in cash in addition to a final dividend of 53 cents for each of their shares. www.coates.com
TCW has added its name to the list of firms looking to take advantage of recent dislocations in the credit markets. It seeks to raise up to $3 billion to seek out distressed debt opportunities, according to LBO Wire. Areas in which TCW Credit Opportunities Fund will invest include bank loans, collateralized debt obligations and various mortgage-backed securities, said one potential limited partner. www.tcw.com
Velocity Interactive Group was unveiled as a result of a merger between Velocity, the firm founded by Ross Levinsohn and Jonathan Miller, and ComVentures and its seasoned venture investors, David Britts, Keyur Patel and Roland Van der Meer. It will continue to invest ComVentures’s current fund and manage its more than $1.5 billion in assets. The new global digital media and communications investment firm also announced a series of investments it has finalized, including one in Doppelganger, a music and social networking site. www.velocity.com
VC Deals
Streamezzo, a Paris-based provider of rich media solutions and platforms for mobile communications, has secured Round C financing totaling more than $22 million. To date, the company has raised a total of $48 million from a roster of top-tier investors. Kuwaiti investment group NTEC (National Technology Enterprise Co.) joins the latest round, along with all of Streamezzo’s existing investors. www.streamezzo.com
Deltanoid Pharmaceuticals, a Madison, Wis.-based pharmaceutical development company, has announced completion of its $12 million Series B financing, bringing total funding to date to more than $16 million. All funds were raised from previous investors in Deltanoid, led by the Wisconsin Alumni Research Foundation, an independent, non-profit technology trans! fer organization that supports research at the University of Wisconsin-Madison, as well as two local venture capital firms, Mason Wells and Venture Investors. Other investors included a local corporation, company founders and angel investors www.deltanoid.com
Juice Wireless, a Los Angeles-based mobile social networking, has closed $6 million in new venture capital funding in its third funding round, led by 21Ventures. The company’s investors now include 21Ventures, Qualcomm and Citizen’s Communications. www.juicecaster.com
Alta Partners has invested $25 million in drug developer Anesiva Inc. (Nasdaq: ANSV) as part of a common stock offering. Anesiva, a South San Francisco-based company, has priced a stock offering of 11.1 million shares at $4.05 each. The company expects proceeds of about $42.9 million after underwriting discounts and commissions, or up to $47.7 million if the underwriters fully exercised overallotment options of about 1.2 million shares. www.anesiva.com
Edison Venture Fund has invested $5 million in Inmagic. Edison Venture Fund, a Lawrenceville, N.J.-based company, is the sole institutional investor. Inmagic is a Woburn, Mass.-based company that facilitates collaboration and social interactions for communities within and outside organizations. Joe Allegra, an Edison Venture Fund general partner, will serve on Inmagic’s board of directors. www.edisonventure.com
GroSolar, a national solar energy firm, has secured $10 million in Series B financing. NGP Energy Technology Partners LP led the investment round. The original investors, SJF Ventures, Calvert Social Funds, and Allco Financial Group, participated in this latest round of funding. www.groSolar.com
Validity Sensors Inc., a San Jose, Calif.-based company, has raised $20 million in Series B-1 backing, VentureWire reported. Prior investor Crosslink Capital led the round and was joined by Telesoft Partners; strategic investor Qualcomm Ventures also participated in the round. Michael Stark of Crosslink Capital joined the company board. Validity has raised a total of $60 million and has a post-money valuation of $80 million, according to Chief Financial Officer Rick Santos. www.validityinc.com
Validus DC Systems, a Brookfield, Conn.-based provider of integrated DC power infrastructure for datacenters and telecommunication facilities, has closed $10 million in a first round of venture funding led by Oak Hill Venture Partners. www.validusdc.com
Forward Ventures has joined the financing syndicate for Altair Therapeutics Inc., a new venture capital-funded biotechnology company created to focus on the discovery, development and commercialization of drugs to treat asthma and other respiratory conditions. www.altairtherapeutics.com
Buyout Deals
Ashford Hospitality Trust Inc. (NYSE: AHT) has restructured two of its joint ventures with Hilton Hotels Corp. (NYSE: HLN). Ashford has received 100 percent ownership in nine hotels and Hilton has received 100 percent ownership in two hotels. Ashford’s third joint venture with Hilton concerning the Capital Hilton and the Hilton LaJolla Torrey Pines was not restructured. Hilton was recently acquired and taken private by Blackstone Group LP through a $20 billion buyout. www.ahtreit.com
Onex Corp. has completed its $960 million acquisition of Husky Injection Molding Systems Ltd., a supplier of injection molding equipment and services to the plastics industry. Onex and the Onex Partners Funds invested approximately $630 million in Husky. Onex, as a limited partner in the funds, invested $226 million. www.husky.ca and www.onex.com
PE-Backed IPOs
SouFun Holding, a property Web site in China, plans to raise about $500 million from an initial public offering. South China Morning Post reported that Hong Kong or New York would be the likely listing market. A spokesman for the Beijing-based company would not comment. In November, Australian telecommunication company Telstra Corp. said it planned to spin off the 51 percent-owned unit for an independent listing in 2008. SouFun CEO Vincent Mok and his partner Li Shan founded the company in 1999 with funding from IDG and Goldman Sachs. world.soufun.com
Merrion Pharmaceutical has postponed the U.S. leg of its initial public offering following the squeeze in capital markets that is due to the credit crunch, but the drug company went ahead with its 2 million share placement on Dublin’s IEX. According to Irish Independent, Merrion’s shares were priced at €4.05 ($5.83) each. The placing raised €5.6 million but fell well short of the initial target of €48 million. Merrion was founded by Growcorp, an Irish life sciences venture capital company, in 2003. www.merrionpharma.com
China Pacific Insurance (Group) Co., an underwriter of life insurance policies, is preparing for an initial public offering in Shanghai and Hong Kong. Reuters also reported that the company seeks to raise $4 billion to $6 billion, according to sources familiar with the deal. The Shanghai-listing is expected by year-end and in Hong Kong in early 2008. U.S. private equity firm Carlyle Group and U.S. insurer Prudential Financial have a combined 19.9 percent stake in Chin! a Pacific Insurance. The remaining 80.1 percent is held by a number of Chinese state-owned firms, including steelmaker Baosteel.
Gulfstream International Group Inc. has started trading its shares on the American Stock Exchange under the ticker symbol GIA. The Fort Lauderdale, Fla.-based company sold 800,000 shares at $8 each during its IPO. Weatherly Group LLC has backed the commercial airline company since March 2006. www.gulfstream.com
The anticipated price for NetSuite Inc.’s pending initial public offering has been raised to a range of $16 to $19 a share. The previous price range for the offering of 6.2 million shares was from $13 to $16 a share. The San Mateo, California-based software maker is majority-owned by Larry Ellison’s Tako Ventures investment firm. Ellison is chief executive of Oracle Corp. www.netsuite.com
PE Exits
Tenaska Power Fund LP has agreed to sell the Commonwealth Chesapeake Power Station in New Church, Virginia, to Tyr Energy Inc. of Overland Park, Kansas. Tenaska purchased Commonwealth Chesapeake in 2005. The sale to Tyr Energy is expected to close in the first quarter. The purchase price was not disclosed. www.tenaska.com and www.tyrenergy.com
PE-Backed M&A
ON Semiconductor Corp. (Nasdaq: ONNN) has agreed to acquire AMIS Holdings Inc. (Nasdaq: AMIS), the parent of AMI Semiconductor, for $915 million in shares. AMIS is backed by Francisco Partners and Citigroup Venture Capital Equity Partners LP. www.onsemi.com and www.amis.com
AmeriMark Direct, a Cleveland-based direct marketer of women’s apparel, accessories and health related merchandise, has acquired New Jersey-based direct-marketer Dr. Leonard’s Healthcare Corp. Financial terms were not disclosed. The two catalog businesses currently generate combined sales in excess of $425 million. JH Partners LLC led the acquisition and provided the equity financing alongside AmeriMark’s management. www.amerimark.com
GTCR Golder Rauner LLC and Encore FBO LLC have agreed to acquire a portion of civil aviation ground services provider Landmark Aviation from Dubai Aerospace Enterprise for $435 million, according to TheDeal.com. DAE, which acquired Landmark for $1.9 billion in August, will retain the company’s maintenance and repair operations but will sell the so-called fixed-base operator business to Chicago-based GTCR and Encore, an aviation services company controlled by Houston-based Platform Partners LLC. www.gtcr.com
Morningstar Inc. (Nasdaq: MORN), a provider of independent investment research, and Ipreo Holdings LLC, a provider of capital markets and investor relations solutions, have signed a definitive agreement for Morningstar to acquire the Hemscott data, media, and investor relations Web site businesses from Ipreo for $51.6 million in cash, subject to adjustments. The companies expect to complete the transaction in early January. Ipreo is majority owned by private-equity firm Veronis Suhler Stevenson LLC. www.ipreo.com
Firms & Funds
Lehman Brothers is seeking to raise $1.5 billion for Lehman Brothers Secondary Opportunities Fund II LP, LBO Wire reported, citing two people familiar with the fund. Lehman Brothers Secondary Opportunities Fund LP is earmarked primarily for investments in buyout funds. One known investment is an American Capital Strategies fund consisting of both funded and unfunded deals. www.lehman.com
Greenhill & Co. (NYSE: GHL) has completed the final closing of its first European mid-market buyout fund, Greenhill Capital Partners Europe LP and related funds with total committed capital as of the final closing of191 million ($385 million). Of the total, Greenhill has committed £25 million and its managing directors and other professionals have committed £42 million. The remaining 65 percent of committed capital has been raised from a variety of institutional investors, high net worth families and qualified corporate executives. www.greenhill.com
ePartners, a business and technology consulting firm, has expanded into Australia with the opening of offices in Sydney, Melbourne, and Brisbane. ePartners now has more than 25 offices in North America, Europe, and Asia. ePartners is backed by Needham Capital Partners, Mobius Venture Capital, Texas Growth Fund, Austin Ventures, Liberty Mutual, Madrona Venture Group, Rustic Canyon Partners, Capital Resource Partners, and Charterhouse Group. www.epartnersolutions.com
RiverVest Venture Partners, a life sciences venture capital firm based in St. Louis, has plans to open an office at the BioEnterprise facility in Cleveland. The office will be managed by Karen Spilizewski, who is joining RiverVest on a part-time basis as a vice president on Jan. 1. www.rivervest.com
Wunderlich Securities, a Memphis-based broker, has signed an agreement with Coil Investment Group, a Norwegian-based investment firm, in which Coil will invest new equity into Wunderlich, and will become a significant owner. The principals of Coil have decades of experience in venture capital, commercial banking, investment banking, operating management and entrepreneurship. www.wunderlichsecurities.com
Polaris Wireless, a Santa Clara, Calif.-based provider of network-based software products, has announced the availability of its Network Optimization product for the global wireless carrier market. NetOpt offers accurate location-based network monitoring and software analysis tools for wireless networks. Polaris is backed by venture capital firms Draper Fisher Jurvetson of Menlo Park, Draper Richards of San Francisco and Centre Palisades Ventures of Los Angeles. www.polariswireless.com
Diagnostic Health Corp. (DHC) has leased approximately 13,000 square feet and moved its home office operations to 22 Inverness Center Parkway in Birmingham, Ala. DHC is a diagnostic imaging company created in July by HealthSouth’s sale of its diagnostic division to The Gores Group. www.dxhealthcorp.com
Jefferies & Co.’s principal operating subsidiary of Jefferies Group Inc. (NYSE: JEF) has formed a dedicated Structured Equity Group within the firm’s broader equity capital markets effort. The new group has been established to further enhance Jefferies’ product offerings in the private equity and alternative asset category, and will be led by Managing Director Charles E. Mather. www.jefferies.com
Human Resources
Advent International has recruited Dan Morgan and Albena Vassileva as principals for its Central & Eastern Europe team. Morgan previously worked for Kaupthing as director of the bank’s specialist private equity division. Vassileva has joined Advent’s new Prague office. She has spent seven years with ABN AMRO Capital, most recently as a vice president and a senior investment manager.
CinTel Corp. (Nasdaq: CNCN) has named Jungho Kim a board member. Kim is a director of Woori Private Equity Fund, a subsidiary of Woori Financial Group which is a financial company based in Korea.
Jefferies & Co.’s principal operating subsidiary of Jefferies Group Inc. (NYSE: JEF) has named Matthew J. Gorelik and John L. Sullivan II as managing directors in the firm’s Private Client Services Group in Los Angeles and San Francisco, respectively. Gorelik was most recently a senior vice president and portfolio manager in the wealth management group at Citigroup Smith Barney. Sullivan was a director at Credit Suisse Private Banking USA. www.jefferies.com
Peter B. Corr is joining Stephen Evans-Freke as a general partner in Celtic Therapeutics Management, a global private equity firm formed to build on the investment model established by Celtic Pharma. Celtic Therapeutics is expected to operate on a significantly larger scale than Celtic Pharma. Corr is a retired Pfizer Inc. executive. He served as senior vice president, science and technology from 2002 to 2006. www.celticpharma.com
Correction
Advent International Corp. focuses on buyouts and private equity transactions. An item published Monday incorrectly described Advent as a venture capital company.
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