PE Week Wire: Tues., Oct. 30, 2007

Running late this morning, due to both a VC news burst and the fact that I’m working Boston hours while simultaneously playing Las Vegas hours. So just some very quick notes:

*** Why be a limited partner in private equity funds, when you can just buy into the general partner? That seems to be China’s thinking, as the FT today reports that the country’s $61.5 billion social security fund has held talks to acquire ownership stakes in Carlyle Group, KKR and TPG. It’s unclear how far among any of these discussions are, but China has already shown this year that it’s willing to pull the trigger — having acquired positions in both The Blackstone Group and Bear Stearns.

*** Quiz Time #1: Can you name the former fund-of-funds executive who is back in market with a $1 billion vehicle. Hint: He’s not doing it with his old firm, as the branding is instead tied to a struggling venture capital shop in the same geographic area.

*** Quiz Time #2: Can you name the VC firm that is about to get more carry than it deserves, thanks to a stock distribution based on a trading average that is nearly 25% higher than the stock price at the time of distribution? Hint: Both the firm’s name and the portfolio company’s business involve swift movement.

*** I was in Chicago Friday to moderate a discussion on private equity investment in the travel and tourism sector. The event was unfortunately off-the-record, so I can’t share the particulars. But I can at least provide some data from Daddy Thomson, in regards to PE-backed acquisitions of travel services, hotel and lodging companies.

Top Three

Hidden City Games Inc. of Seattle has raised $15.01 million in Series B funding, according to a regulatory filing. Backers include Trinity Ventures and Rustic Canyon Ventures. The company’s filing says that it focuses on pharmaceutical product scanning and software, but let’s just assume that a legal type forgot to use whiteout on his template. In reality, Hidden City makes collectible trading card games. Its execs previously were responsible for such trading card games as Pokemon and Magic: The Gathering.

Relypsa Inc., a Santa Clara, Calif.-based developer of polymeric drugs has raised $33 million in Series A funding. 5AM Ventures and New Leaf Partners co-led the deal, and were joined by Sprout Group, Delphi Ventures, CMEA Ventures and Mediphase Venture Partners. Replypsa is a spinout of Ilypsa, which had raised venture capital from many of the same firms before being acquired by Amgen for $420 million in July. .

CCMP Capital has closed its first independent fund with $3.4 billion in capital commitments. CCMP is the former buyout and growth equity team of JPMorgan Partners, and used Credit Suisse as its placement agent. .

VC Deals

Acceleron Pharma Inc., a Cambridge, Mass.-based drug company focused on regenerative therapeutics, has raised $31 million in Series C funding. Bessemer Venture Partners led the round, and was joined by MPM BioEquities, QVT Financial and return backers Advanced Technology Ventures, Flagship Ventures, OrbiMed Advisors, Polaris Ventures, Sutter Hill Ventures and Venrock.The company has now raised around $87 million in total VC funding. .

OnLive Inc., a Palo Alto, Calif.-based data and networking storage startup, has raised $16.5 million in Series B funding, according to a regulatory filing. Backers include Maverick Capital and Warner Brothers.

vMix Media Inc., a San Diego-based online media platform, has raised $16.5 million in Series B-1 funding, according to a regulatory filing. ATA Ventures and JK&B Capital were joined by return backers Mission Ventures and Enterprise Partners.

Dataupia Inc., a Somerville, Mass.-based provider of enterprise computing data management solutions, has raised $16 million in Series B funding, according to a regulatory filing. Fairhaven Capital Partners was joined by return backers Polaris Venture Partners and Valhalla Partners.

Skinkers Ltd., a UK-based provider of P2P technology for live content delivery, has raised $16 million in second-round funding. Acacia Capital Partners led the deal, and was joined by return backer Spark Ventures and company management.

Imagine Communications, a Cardiff By The Sea, Calif.–based provider of digital video platforms, has raised $15 million in Series B funding. Court Square Ventures led the deal, and was joined by return backers Columbia Capital and Carmel Ventures. The company has now raised just under $25 million in total funding. .

Vitreo Retinal Technologies Inc., an Irvine, Calif.-based developer of diagnostic and therapeutic systems for the treatment of serious ocular diseases, has raised nearly $12 million in Series A funding led by De Novo Ventures, according to a regulatory filing. The deal included around $9.35 million in preferred stock, and $2.6 million worth of warrants.

Tactile Systems Technology, a Minneapolis-based maker of products to treat vascular diseases like lymphedema, has raised $11.8 million n new VC funding led by Galen Partners. .

GridNetworks, a Seattle-based provider of Internet television infrastructure, has raised $9.5 million in Series A funding. Panorama Capital led the deal, and was joined by two strategic investors that were not named. .

WellGen Inc., a North Brunswick, N.J.-based biotech company that uses nutrigenomics to discover and develop food ingredients for wellness products, has raised $9.5 million in Series C funding. The only identified participant was return backer Amphion Innovations PLC.

Critical Links, a Portugal-based provider of a converged multi-function business gateway targeted at SMBs and enterprise branch offices, has raised $5.7 million in Series A funding. Backers include InovCapital, Change Partners and ASK/ISQ Capital. .

VRT Insurance Services, an Oakland insurance brokerage launched earlier this year, has raised $5 million from Belvedere Capital. .

Worktopia, a New York-based online booking engine for meeting space in hotels, airport lounges and other venues, has raised $5 million in Series A funding. DFJ Gotham Ventures led the deal, and was joined by Milestone Venture Partners and High Peaks Venture Partners. .

PicksPal Inc., a Mountain View, Calif.-based provider of an online sports gaming service, has raised $3 million in Series C funding, according to a regulatory filing. Return backers include Bay Partners and Canaan Partners.

OwnerIQ, a Newton, Mass.–based provider of customized, ownership-targeted media programs, has raised $2 million in Series A funding. Backers include Atlas Venture, CommonAngels and Massachusetts Technology Development Corp. ., a San Francisco-based provider of online discussion of current events, has raised nearly $2 million in seed funding. Backers include Adobe Systems and Will Hearst. TechCrunch describes the site was wanting to be the C-Span of the web.

Apollo Mobile Media Inc. has raised $1.2 million in Series A funding, according to a regulatory filing. Backers include Madrona Venture Group and Trilogy Equity Partners. The Seattle-based company describes itself as a “next-generation, integrated Web 2.0 and mobile consumer social shopping service.”

TeleSoft Partners has acquired a majority interest in Energy Software & Consulting I and II, which combined is the largest preferred shareholder in Nexant, an energy software, engineering and consulting firm. No financial terms were disclosed. Other Nexant shareholders include The Beacon Group, Morgan Stanley Global Energy Group, Hellman & Friedman, Nth Power, MC Capital, and IBM. .

Buyout Deals

Platinum Equity has agreed to acquire Covad Communications Group Inc. (AMEX: DVW), a San Jose, Calif.-based provider of integrated voice and data communications. The total deal is valued at around $417 million, with Covad stockholders to receive $1.02 per share in cash. Barclays Capital is advising Covad on the deal, while Platinum is being repped by Houlihan Lokey Howard & Zukin. .

FastBooking, a France-based provider of online hotel booking services, has raised €35 million from 3i Group and Edmond de Rothschild Investment Partners. Part of the proceeds will be used to buy out existing shareholders like Iris Capital, with 3i and Rothschild gaining a 62% equity position. .

Industrial Renaissance has sponsored a recapitalization of Russell-Newman, a maker of sleepwear and intimate apparel. No financial terms were disclosed for the deal, which was done in partnership with Russell-Newman senior management. GW Equity represented Russell-Newman. .

Parthenon Capital has bought Alarm Security Group from Waud Capital Partners and Northwest Capital Appreciation. No financial terms were disclosed. .

PE-Backed IPOs

Genoptix Inc., a Carlsbad, Calif.-based provider of personalized medicine services for management of hematolymphatic disorders, raised $85 million in its IPO. The company priced five million common shares at $17 per share ($14-$16 range), for an initial market cap of approximately $265 million. It will trade on the Nasdaq under ticker symbol GXDX, while Lehman Brothers served as lead underwriter. Genoptix had raised around $49 million in VC funding since 1999, from firms like Enterprise Partners, Chicago Growth Partners, William Blair Capital Partners, Alliance Technology Ventures, Tullis-Dickerson and Excelsior Venture Partners.

Akrion Inc., an Allentown, Pa.-based provider of batch-immersion and single-wafer wet cleaning systems for the semiconductor industry, has withdrawn plans for a$86.25 million IPO. No reason was provided. Akrion had planned to trade on the Nasdaq with Credit Suisse and Deutsche Bank serving as co-lead underwriters. This is the second such withdrawal for Akrion. The company filed for a $50 million IPO in 2004, but withdrew registration last December, citing “current market conditions.” Sunrise Capital Partners holds a 97.7% ownership position.

Entropic Communications Inc., a San Diego-based provider of home networking for digital entertainment, has set its IPO terms to 10 million common shares being offered at between $9 and $11 per share. It would have an initial market cap of approximately $766 million, were it to price at the high end of its range. The company plans to trade on the Nasdaq under ticker symbol ENTR, with Credit Suisse and Lehman Brothers serving as co-lead underwriters. Entropic has raised over $75 million in total VC funding since 2001, from firms like Anthem, CMEA, Comcast, Revolution, Cisco Systems, Intel Capital, Liberty Associated Partners, Mission Ventures, Motorola Ventures, Panasonic Ventures, Redpoint Ventures, Time Warner and YAS Broadband Ventures.

PE-Backed M&A

Boston Ventures has agreed to sell Vista III Media, an Atlanta-based regional provider of cable television, high-speed Internet and telephony services, to Harron Communications LP, a Frazer, Penn.-based multi-system cable and communications services company doing business as MetroCast Communications. No financial terms were disclosed. Boston Ventures also is an investor in Harron. .

Fender Musical Instruments Corp., a Scottsdale, Ariz.-based guitar maker partially owned by Weston Presidio, has agreed to acquire Kaman Music Corp. from Kaman Corp. (Nasdaq: KAMN) for approximately $117 million in cash. .

Firms & Funds

AIG Highstar Capital, a private equity group focused on the public service infrastructure sector, has closed its third fund with $3.5 billion in capital commitments. Merrill Lynch and AIG Equity Sales Corp. served as placement agents. .

Lehman Brothers has raised approximately $670 million for the Lehman Brothers Loan Opportunity Fund, which will buy up leveraged loans from a variety of lenders. The total fund would be worth approximately $3 billion, including leverage.

Hellman & Friedman has agreed to acquire a minority stake in Grosvenor Capital Management, a hedge fund-of-funds manager that manages around $24 billion in client capital. No financial terms were disclosed.

Human Resources

Mark Huang has left GE Energy Financial Services, where he was a senior vice president in charge of cleantech investing. No word yet on future plans. The news was first reported by Greentech Media.

Bill Sheehan has joined MFC Global Investment Management as a managing director, responsible for sales and business development in the institutional investment market. He previously was a founder and managing partner of VC firm Ironside Capital Group (which was funded by MFC).