PE Week Wire: Tues., March 4, 2008

Today is Super Tuesday, Part Deux – so it seems appropriate to talk some politics. But don‘t worry, nothing about Clinton, Obama, McCain, Texas or Ohio. Instead, this is about a candidate for U.S. Senate from New Jersey, who has accused a private equity firm of sabotaging his campaign website.

The candidate is Murray Sabrin, a university professor who once ran on the Libertarian ticket for governor of New Jersey. He’s now running for U.S. Senate as a Republican, and last week received an endorsement from political soul-mate Ron Paul. More specifically, Paul sent out a so-called “Money Bomb” for Sabrin, which is basically an email asking supporters to immediately make an online donation. The idea is to raise lots of money in a single day, and then use the windfall as evidence of growing grass-roots support.

Soon after Paul lit the fuse, however, the Sabrin website crashed. It and some associated email accounts were down for approximately 16 hours, before being put back online. The campaign was furious. It had discussed the expected traffic surge with Network Solutions beforehand, and that it had been assured the site would be fine. Network Solutions, for its part, said that the crash was related to internal coding problems on Sabrin’s end, and that it worked as fast as it could to get the site back online.

This is where it gets just bizarre. The Sabrin campaign seemed to have two choices at this point: Either accept that the crash was caused by its own coding mistake, or blame Network Solutions for having faulty technology. But it went for an unexpected third avenue: Accuse Network Solutions of taking down the website for partisan political purposes. And how does it know that Network Solutions is anti-Republican? Because it’s controlled by private equity firm General Atlantic, which happens to have some prominent Democratic donors in its ranks.

Sabrin’s campaign sent out a press release late Friday titled: “Democratic Private Equity Firm Halts Ron Paul Revolution!” Its first line? “A $17 billion private equity firm, managed by major Democratic donors, General Atlantic, shut down Dr. Murray Sabrin’s website last night immediately after Dr. Ron Paul sent out a nationwide email asking his supporters to participate in his online fundraising drive.”

Part of me wanted to ignore this whole thing, because it’s just so silly. But conspiracy kooks should sometimes be called on their kookiness. So here goes.

The press release identifies General Atlantic as a “Democratic private equity firm,” because some of its managers have donated to Democratic candidates. This is true, although GA managers also have donated to GOP candidates. For example, it points out that General Atlantic CEO Bill Ford has given to Democrats. It doesn’t mention that he’s also made recent donations to Rudy Giuliani and a Republican PAC that supported such candidates as George Allen and John Conryn. It also tries to use “guilt” by association, pointing out that Ford sits on the board of Amherst College – alongside a deputy managing director of the New York Times. How’s that for reaching (note: Ford may well be a card-carrying Democrat, but Sabrin hasn’t proved it).

More importantly, it would not matter if every member of General Atlantic was a Democratic super-delegate in Denver this summer. Even under that scenario, it is extremely unlikely that the firm would interfere in the day-to-day operations of one of its portfolio companies, in order to hinder an underdog GOP candidate. For the record, GA denies having any role in the website shutdown, and Network Solutions says that there were no political motives.

I asked Sabrin campaign spokesman George Ajjan if he had any evidence that General Atlantic was involved in the shutdown (political or not). In fact, I asked him six separate times. He refused to answer the question – which is an answer in its own right. He did say that the campaign plans to sue Network Solutions (and possibly GA) for a service agreement violation, but would not provide a shred of evidence that it was done (A) Intentionally, or (B) Intentionally for political motives. It was pathetic.

If I were General Atlantic, I’d sue first: For libel.


In Memoriam

Phil Tate of UK buyout and turnaround shop Endless LLP, who died Sunday from a skiing accident while on vacation in France.


*** I’m in New York, where Buyouts East begins in just a few hours. Hope to see a bunch of you here… For those who can’t make it, I’ll be blogging the event over at peHUB.

*** Many of you have asked for a better News Section at peHUB, and we’ve now begun that process. We just reorganized the section as a river, with the latest news up top, no matter the “type” (VC deal, IPO, etc.). I update news throughout the day, and using the page is a great way to get information before the Wire goes out. For example, most of today’s VC Deals were on the site by 8am ET.

We also have fixed the News RSS feeds. If you want an RSS feed for all news, just go here: It will work with most every RSS reader.

If you want type-specific RSS feeds (Buyouts Deals, for example), just go here. If you have any troubles, don’t hesitate to email me…

Top Three

Taylor Nelson Sofres PLC has agreed to acquire Compete Inc., a Boston-based provider of website analytics. The deal is valued at up to $150 million in cash, including a $75 million up-front payment and $75 million in earn-outs. Compete recorded 2007 revenue of $14.9 million, which represented 50% growth over 2006. The company has raised $43 million in total VC funding since 2000, from firms like Charles River Ventures, idealab, Split Rock Partners and William Blair Capital Partners.

Cellcom Telecommunications Ltd., a mobile carrier operating in West Africa, has raised $20 million from Emerging Capital Partners. The funds will be used to expand Cellcom’s network and operations in Liberia, and to launch service in Guinea and Sierra Leone.

Natural Gas Partners has closed its ninth fund with $4 billion in capital commitments. The an Irving, Texas-based private equity firm focuses on upstream energy assets, and already has committed around $550 million of the new fund for nine companies. Its prior fund closed on $1.3 billion in 2005.

VC Deals

Tzero Technologies, a Sunnyvale, Calif.-based provider of ultra-wideband technology and wireless video products, has raised $18 million in third-round funding. CID Group led the round, and was joined by return backers August Capital, Lightspeed Venture Partners, OVP, U.S. Venture Partners and VentureTech Alliance.

Handango, a Hurst, Texas-based provider of smartphone content, has raised $9.5 million in Series C funding. Return backers include Institutional Venture Partners, Advanced Technology Ventures, Centerpoint, Neo Carta Ventures, Pharos Capital Group and SSM Partners. The company had previously raised over $78 million since 1999.

OreCon Ltd., a UK-based wave energy device developer, has raised €12 million in VC funding. Advent Venture Partners led the round, and was joined by Venrock, Wellington Partners and Northzone Ventures.

Moberg Derma, a Swedish pharmaceutical company focused on skin diseases, has raised SEK 40 million ($6.5m) in new VC funding. Return backer Baltic Sea Foundation was joined by an undisclosed new investor. The company has raised SEK 73 million in total VC funding since its March 2006 inception.

YieldBuild, a San Francisco–based provider of online ad format and placement optimization solutions, has raised $6 million in Series B funding. Storm Ventures led the round, and was joined by return backer Hummer Winblad Venture Partners.

ManiaTV Network Inc., a Denver-based Internet television network, has raised $5.5 million in Series C funding, according to a regulatory filing. DAG Ventures led the round, and was joined by return backers Benchmark Capital, Centennial Ventures and Intel Capital. ManiaTV has now raised around $23 million in total VC funding since late 2004.

Chesson Labs, a Durham, N.C.-based developer of healthcare products made from a patented polymer, has raised $3.3 million in Series A funding. No investor information was disclosed.

Ubiquisys Ltd., a UK-based provider of 3G femtocell access points for the residential market, has raised an undisclosed amount of funding from T-Mobile Venture Fund. It previously had raised $42 million over two funding rounds from backers like Google, Accel Partners, Atlas Venture and Advent Venture Partners.

Buyout Deals

HSBC Private Equity has bought Britton Group from private equity firm LDC for £77 million. Britton Group is a UK-based extrusion and plastic packaging manufacturer, and was advised by Clearwater Corporate Finance. LDC originally acquired Britton Group in 2004 for £42 million.

LNK Partners hascompleted its previously-announcedrecapitalization of sandwich shop chain Au Bon Pain, in partnership with company management. The sponsors invested more than $100 million in equity for a majority position, while leveraged financing was provided by CapitalSource and Intermediate Capital Group. The Compass Group, which owned Au Bon Pain from 2002 to 2005, retained an equity position, while subsequent buyer PNC Mezzanine Capital sold its stake.

Cinven is interested in bidding on Trillium, the property management unit of Land Securities Group PLC, according to Dow Jones. Land Securities today announced that it had received an approach for the division, which has annual revenue of just over $1.5 billion.

Sun Capital Partners has received European Commission approval to acquire partners proposed acquisition of parts of Arcandor AG’s mail order unit The transaction was analyzed under the EU’s ‘simplified’ merger review procedure for cases which the commission believes do not pose competition concerns. No financial details were disclosed.

PE Exits

Industrial Growth Partners has agreed to sell Microporous Products to Polypore International Inc. (NYSE: PPO) for approximately $76 million. Microporous is a Piney Flats, Tenn.-based maker of rubber and polyethylene battery separators for the lead-acid battery industry. It expects 2008 sales of between $580 million and $605 million.

Rockwell Collins Inc. (NYSE: COL) has agreed to acquire Athena Technologies Inc., a Warrenton, Va.-based maker of flight control and navigation systems for the unmanned aerial vehicle market. No financial terms were disclosed. Athena Technologies has raised around $5 million in VC funding from firms like Global Environment Fund and BEI Technologies.

PE-Backed M&A

NetCentrum, operator of Czech web portal, has acquired Slokak web portal from EPIC Holding. The deal is valued at more than €20 million, and will result in 4.9 million combined monthly users. NetCentrum is controlled by Warburg Pincus.

Nuprecon, a Snoqualmie, Wash.-based demolition contractor owned by Evergreen Pacific Partners, has merged with fellow demolition contractor CRS Environmental, which is based in Brea, California. No financial terms were disclosed. Evergreen Pacific provided equity for the deal, while debt was provided by Banc of America Capital Solutions, Prudential Capital Group and Prudential Capital Partners. Houlihan Lokey provided advisory services.

Veritext, a court reporting firm owned by The Riverside Company, has acquired Staten Island-based Priority One Court Reporting Services Inc. No financial terms were disclosed.

Vitamin Shoppe, a North Bergen, N.J.-based retailer and direct marketer of vitamins, minerals and nutritionalsupplements, has agreed to acquire five Nutrition Depot retail locations in Florida’s Broward and Palm Beach Counties. It will convert each of them into Vitamin Shoppe stores. No financial terms were disclosed. Vitamin Shoppe has been owned by Bear Stearns Merchant Banking in 2002.

Bad News

AllPeers Ltd., a UK-based developer of a FireFox extension that enabled P2P sharing, has closed its doors. The company had raised a round of funding in early 2006 from Index Ventures and Mangrove Capital Partners.

Firms & Funds

National Pension Service of South Korea said that it will invest $300 million in a $7 billion distressed fund being raised by TPG Capital.

Swander Pace Capital is planning to target $500 million for its fourth fund, according to LBO Wire. The San Francisco-based private equity firm focuses on consumer products businesses with annual revenue of between $20 million and $30 million.

HRJ Capital has closed its third global real estate fund-of-funds with $155 million in capital commitments.

Human Resources

James Howland has joined Morgan Stanley Private Equity as a managing director and operating partner. He previously was president of Dun & Bradstreet.

Akitoshi Nakamura has joined Sun Capital Partners as chairman and CEO of the firm’s Japan affiliate. He previously served as vice chairman and director of Nikko Principal Investments Japan Ltd.

Scott Murray has joined the advisory board of WHI Capital Partners. He is a former managing director of Madison Capital Partners, and co-founder of Pfingsten Partners.