PE Week Wire: Tues., Feb. 12, 2008

Well, it doesn’t look like either Microsoft or Yahoo are slowing down their VC-backed acquisition pace. First came yesterday’s news that Microsoft has agreed to buy Danger, a provider of software and services for mobile handsets. Today it’s Yahoo’s turn, with an announcement that it has acquired video hosting company Maven Networks for $160 million.

Yahoo originally signed its letter of intent for Maven last November, and news first leaked out two weeks ago via blogs TechCrunch and NewTeeVee. Less than 24 hours later, however, Microsoft unveiled its hostile takeover attempt for Yahoo, and speculation ran rampant that the Maven deal was stalled. Apologies for lending my voice to that, as I’m now told that February 11 was always the close date, and it finished up as scheduled.

This sale is a big win for Maven’s venture capital backers – General Catalyst Partners, Accel Partners and Prism VentureWorks — which had invested around $24 million. The most recent round was a $12 million Series C round in mid-2006, at a pre-money valuation of just $30 million. It’s particularly good for GC, which originally invested in 2003 at a $7.5 million pre-money. And GC could really use it, because it’s also pumped a ton of money into Maven competitor Brightcove – including a recent round at around a $210 million post.

*** Back in early 2001, I was interim editor of a weekly newsletter called The IPO Reporter. It was like trying to fillan XFL pullout section of Sports Illustrated. There are just so many ways to describe inaction.

Today’s IPO market isn’t quite that bad, but that’s only because we’re still working through all the registration withdrawals. The latestis Forum Oilfield Technologies, which had planned to raise$345 million. McLeod USA also pulled, but it’s not really PE-backed, so we’ll ignore it for our purposes.

So far in 2008, 11 PE-backed or VC-backed companies have withdrawn or indefinitely postponed IPOs, citing some version of “unfavorable market conditions.” There also are about half a dozen more that pulled after agreeing to be acquired (coming soon: Danger). For context, there have only been 11 such companies to file for IPOs in 2008, and just two thathave managed to price. In other words, the stable is painfullystable.

Glad The IPO Reporter died off, or else someone else would be stuck trying to fill those pages…

*** Carl Icahn is stepping into the ADS/Blackstone fray. Good, something else for me to ask him about, during our keynote interview at Buyouts East.

*** Speaking of self-promotion: One final reminder that tomorrow afternoon I’ll be moderating the panel discussion at ACG Boston’s 2008 Dealmakers Outlook Conference. My esteemed crew includes Josh Bekenstein (Bain Capital), Kevin Callaghan (Berkshire Partners), Jill Greenthal (Blackstone) and Marty Mannion (Summit Partners). We’ve got a lot to discuss, so I hope to see some of you there…

Top Three

TPG Capital and Sumitomo Heavy Industries have made an unsolicited $544 million offer to acquire Axcelis Technologies Inc. (Nasdaq: ACLS). The $5.20 per share offer represents a 29% premium to last Friday’s closing price. Axcelis makes ion implantation devices for chip makers.

Infinia Corp., a Kennewick, Wash.-based developer of solar thermal engine technology, has raised $50 million in Series B funding. GLG Partners led the round, and was joined by Wexford Capital and return backers Vulcan Capital, Khosla Ventures, EQUUS Total Return Inc., Idealab and Power Play Energy LLC.

Benchmark Capital has closed its sixth fund with around $500 million in capital commitments. peHUB broke the news yesterday.

VC Deals

NGM Biopharmaceuticals Inc., a Hillsborough, Calif.-based drug startup focused on metabolic diseases, has raised $25.55 million in Series A funding, according to a regulatory filing. So far it had called down around $8.5 million. Backers include Column Group, Prospect Venture Partners and Rho Ventures.

NetMagic, an Indian managed IT services provider, has raised $20 million in second-round funding co-led by Fidelity International and Nexus India Capital.

Voxify, an Alameda, Calif.-based provider of speech recognition technologies for automating customer call centers, has raised $15 million in fourth-round funding. Intel Capital led the deal, and was joined by return backers El Dorado Ventures, Palomar Ventures and Sigma Partners. The company previously had raised around $20 million.

Tizor Systems Inc., a Maynard, Mass.-based provider of enterprise data auditing and protection solutions for the data center, has raised $8.3 million in Series C funding. Longworth Venture Partners led the round, and was joined by Hummer Winblad Venture Partners, Masthead Venture Partners, Navigator Technology Ventures and Common Angels. The round officially closed last November.

The Point, a Chicago-based group action network for solving problems, has raised $4.8 million from New Enterprise Associates.

Axis Network Technology, a UK-based provider of re-configurable digital radio platforms, has raised Gbp3 million from Bessemer Venture Partners.

Pyxis Technology Inc., a design-for-manufacturability routing company based in Santa Clara, Calif., has raised $5.25 million in additional Series B funding. The round total now stands at $14.45 million. KT Venture Group was joined on the new tranche by return backers Austin Ventures, CMEA Ventures and Formative Ventures.

First Thirty Days Inc., a New York-based provider of online self-help content, has raised $5 million in Series A funding. Hearst Interactive Media led the round, and was joined by New York City Investment Fund, former Time Warner CEO Dick Parsons and other individual angels. Most of the round closed in early 2007.

Rocketon Inc., a South San Francisco-based MMO game developer, has raised $5 million in Series B funding from D.E. Shaw. It previously raised $800,000 in Series A funding led by Bertram Ventures.

Buyout Deals

IMI, a listed UK engineering company, saw its shares rise today on speculation that The Blackstone Group is considering a bid. IMI’s market cap is approximately $2.38 billion. Blackstone had made an approach last year, when IMI was worth around twice what it’s worth today.

Industrial Opportunity Partners has sponsored a recapitalization of Gulf Coast Machine & Supply Co., a Beaumont, Texas-based manufacturer of large forgings for use in the oil and gas, petrochemical, wind energy and general industrial markets. No financial terms were disclosed. PNC Business Credit and Monroe Capital provided senior debt, while Gulfco’s family owners were represented by Mills & Stowell Investment Bankers.

Argantis, a Cologne-based private equity firm, has acquired W.I.S. Group, a provider of security technology and services to German businesses. No financial terms were disclosed, except that Mezzanine Management supported the deal with €18.6 million in financing.

Sage Holdings, an acquisition platform backed by The Riverside Company, has acquired UK-based financial communications firm M:Commuinications and global proxy solicitation firm D.F. King & Co. No financial terms were disclosed.

PE-Backed IPOs

BCD Semiconductor Manufacturing Ltd., a Shanghai-based analog integrated device manufacturer, has postponed its IPO, due to market conditions. The company had filed for a $75.9 million offering in late January, with plans to list on the Nasdaq. It later lowered its upper target to $66 million. Deutsche Bank Securities is serving as lead underwriter. BCD has raised around $64 million in VC funding since 2002, from Core Capital (23.29% pre-IPO stake), Venrock (7.24%), New Enterprise Associates (7.03%), SAIL Financial Group (5.38%), Intel Capital, iD Ventures America, Redpoint Ventures, Jafco and Granite Global Ventures.

Forum Oilfield Technologies Inc., a Houston-based maker of drilling and flow control products for oil and natural gas drilling and production applications, has withdrawn registration for a $345 million IPO, citing “market conditions.” It had planned to trade on the NYSE, with Credit Suisse and JPMorgan serving as co-lead underwriters. SCF Partners helped form the company in 2005, and holds a majority ownership position.

PE Exits

Yahoo has acquired online video hosting and distribution company Maven Networks for $160 million. Maven had raised around $24 million in VC funding since 2004, including a $12 million Series C round at a pre-money valuation of approximately $42 million. Backers include Accel Partners, General Catalyst Partners and Prism VentureWorks.

GB Merchant Partners has sold Andrew Marc, a maker of upscale handbags and outerwear, to G-III Apparel Group (Nasdaq: GIII). The deal was valued at approximately $42 million, while Andrew Marc recorded 2007 net sales of approximately $80 million. Financo represented Andrew Marc on the transaction.

Montagu Private Equity reportedly is close to selling Stabilus, a German producer of gas springs used in automotive and industrial applications, for upwards of €500 million.

Newron Pharmaceuticals SpA (SWX: NWRN) has agreed to acquired Hunter-Fleming Ltd., a UK-based developer of drugs to treat neurodegenerative and inflammatory disorders. The deal includes an upfront payment of €8 million, plus up to €17 million in earnouts (payable in Newron shares). Hunter-Fleming has raised over $20 million in VC funding from firms like Advent International, Equity Ventures Ltd., Yorkshire Fund Managers, MTI Partners and Bridgepoint Capital.

PE-Backed M&A

Atempo Inc., a Palo Alto, Calif.-based provider of cross-platform data protection and archiving solutions, has acquired Lighthouse Global Technologies Inc., a Greenwich, Conn.–based developer of an open architecture e-mail archiving solution. No financial terms were disclosed. Atempo raised a $22 million Series B round last year from Intel Capital, Steelpoint Capital Partners and Ridgewood Capital.

Buckeye GP Holdings (NYSE: BGH) has completed its $145.5 million cash acquisition of regional fuel distributor Farm & Home Oil Co. Buckeye is partially owned by ArcLight Capital Partners, Kelso & Co. and Lehman Brothers.

Copper Conferencing, a Broomfield, Colo.-based provider of conference calling services to small and medium-sized businesses, has acquired San Diego-based The Conference Depot for $11 million. NewWest Capital Partners provided equity to sponsor the deal, while subordinated debt was provided by Bush O’Donnell Capital Partners.

Harmony Information Systems, a provider of software for the health and human services sector, has acquired Synergy Software Technologies Inc., a Burlington, Vt.-based provider of case management software for federal, state and local governments. Harmony is backed by JMI Equity and Updata Partners. Synergy Software was advised on the sale by GE Equity.

onTargetjobs, a portfolio company of Warburg Pincus, has acquired, a network of over 350 geographically focused Internet job boards. No financial terms were disclosed, although Classified Intelligence pegs the figure at $100 million.

Bad News

Holley Performance Products Inc., a Bowling Green, Ky.-based car parts maker owned by Kohlberg & Co., has filed for Chapter 11 protection. The company has been involved in restructuring efforts since 2005, and Kohlberg last year stopped providing cash that allowed Holley to service its debt. As of late last month, the company had $106 million in assets and $243 million in debts.

Firms & Funds

HRJ Capital has closed its fifth VC fund-of-funds with $273 million in capital commitments..

Human Resources

Kevin Fong has left Mayfield Fund, where he had been a partner for nearly 20 years.

John Kanas has joined WL Ross & Co. as a senior advisor, with a focus on distressed financial services opportunities. Kanas previously served as CEO of North Fork Bank, until it was acquired by Capital One Financial in 2006. He will continue as an advisor to Capital One.

Brian Best has joined Leader Ventures as a managing director. He had spent the past decade with Western Technology Investment, most recently as an investment partner.