PE Week Wire — Tuesday 12/24

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Big Fish Communications Inc., a Marina Del Rey, Calif.-based provider of e-mail protection and message management services, has received $6.5 million in new funding led by Sierra Ventures.

Quanta Services Inc., a Houston-based provider of specialized contracting services, has closed on a $72.9 million equity investment from existing backer First Reserve Fund IX LP, a private equity fund managed by First Reserve Corp. First Reserve has purchased 2,430,741 shares of Series E Preferred Stock for $30 per share, each share of which, upon shareholder approval, will be convertible into 10 common shares. Proceeds from the sale of shares to First Reserve will be used initially to pay down outstanding balances under the company’s credit facility.

Intuit Inc. (Nasdaq:INTU) has signed a definitive agreement to sell its wholly owned Japanese business software subsidiary, Intuit KK, to Advantage Partners Inc., a Japan-based private equity firm. Under the terms of the agreement, Advantage Partners will purchase 100% of Intuit KK stock for 9.5 billion Yen (approximately $78 million).

TopSpin Medical, an Israel-based MRI technology platform developer, has raised $16.5 million in Series B funding led by Pitango Venture Capital and Giza Venture Capital. Other investors included Israel Seed Partners, Platinum and Neurone Ventures, Peregrine Ventures, IIRF and Johnson & Johnson.

Avaya Inc. (NYSE: AV), a Basking Ridge, N.J.-based enterprise network provider, has received $100 million from Warburg Pincus to be used for repurchasing $660.5 million of outstanding convertible bonds. In addition, Warburg will receive additional warrants and the opportunity to buy additional common stock. Prior to the deal, Warburg owned 14.5% of Avaya, thanks to $500 million of prior investments.

Nixon Peabody LLP, a national multi-practice law firm, and Boston-based Hutchins, Wheeler & Dittmar voted yesterday to combine their firms into a single entity that will retain the Nixon Peabody name.

The Dial Corp. has reached an agreement to sell its Argentina business to an entity designated by Southern Cross Group, a private equity investor in Argentina. The transaction is structured as a sale of the assets of Dial Argentina SA, which includes the stock it holds of its two subsidiaries, Sulfargen SA and The Dial Corp. San Juan SA.

MacDermid Inc. (NYSE: MRD), a Waterbury, Conn.-based provider of specialty chemicals, yesterday filed SEC documents that would allow shareholders Citicorp Venture Capital and Citicorp Mezzanine Partners to sell 1.2 million shares of MacDermid common stock. The stock closed trading yesterday at $23.54 per share.

The Financial Times is reporting that European private equity shops Cinven and Candover are planning a $1.03 billion joint bid for publishing company BertelsmannSpringer, a subsidiary of Germany’s Bertelsmann media group. Merryl Lynch is conducting the auction.

NEWS FROM MONDAY 12/23

WildBlue Communications, a Denver-based broadband provider, today announced that it has received $156 million in a combined investment from Intelsat, National Rural Telecommunications Cooperative, and existing investors Liberty Satellite & Technology Inc., Kleiner Perkins Caufield & Byers and WildBlue Chairman David Drucker. This transaction, which is scheduled to close at the end of Q2 2003, is subject to WildBlue meeting certain conditions, including FCC approvals.

Last Thursday, a Delaware judge found in a summary judgment that MVC Capital, formerly known as MeVC, must hold a special election for three of its five board seats. The finding came in response to a suit originated in April 2002 by Millennium Partners, a New York hedge fund which is the fund’s largest shareholder. Millennium and MVC have been in a public dispute involving a proxy fight and two lawsuits since February of last year. Under the ruling, the judge ordered the fund to hold new elections for the board seats held by fund CEO John Grillos, Larry Gerhard and a vacant seat previously held by the fund’s former investment advisor, MeVC Advisers. The last person to hold the MeVC Advisers seat was Peter Freudenthal, a founder of the fund who held the seat until he resigned from the investment advisor in June 2002.

Pintex Pharmaceuticals Inc., a Watertown, Mass.-based drug discovery company, announced today that it has raised $7.25 million in a Series B Preferred financing round. POD Holding and Zero Stage Capital led the financing, and the syndicate includes previous backers BioVentures Investors and Canaan Partners.

Castle Harlan Australian Mezzanine Partners Pty. Ltd. (CHAMP) announced that it is sponsoring a reorganization for United Australia Pacific Inc. (UAP), which was filed today in U.S. Bankruptcy Court in New York. Under the plan, CHAMP is offering $34.5 million (approximately A$61 million) for UAP’s majority interest in United Austar Inc. (a Colorado company that beneficially owns 80.7% of Austar). The offer represents approximately 7% of the face value of UAP’s outstanding bonds.
CMS Energy announced today that it has reached a definitive agreement to sell CMS Panhandle Cos., its interstate natural gas pipeline business and accompanying subsidiaries, to Southern Union Panhandle for $1.828 billion. The agreement calls for Southern Union Panhandle – a newly formed entity owned by Southern Union Co. and private equity firm AIG Highstar Capital – to pay $662 million in cash and assume $1.166 billion in debt.

SEI Investments has hired Michael Leahy as head of Alternative Investments Operations. Leahy joins SEI with over 17 years of operational experience, 11 of which were spent in Goldman Sachs’ Hedge Fund Strategies group. He was most recently treasurer and head of operations at Goldman Sachs Princeton.

Evergreen Investment Partners, an Israel-based venture capital fund specializing in wireless startups, has signed a cooperation agreement with Telecom Italia Mobile to give TIM access to Evergreen’s portfolio.

Robert Gordon, a former Cisco executive, was sentenced Friday to 5.5 years in prison for bilking his company out of more than $50 million. Among his transgressions, Gordon admitted to setting up offshore bank accounts, stealing company stock and going so far as to create a bogus venture firm (Bay Star Capital) to divert money from Cisco.

Ellen Roy, co-founder of failed Internet incubator I-Group/Hotbank New England, has been named Secretary of Environmental Affairs by Massachusetts Governor-elect Mitt Romney.

Nautic Partners recently led a $48.3 million investment in Harris Research Inc., a franchiser of carpet and upholstery cleaning businesses, to recapitalize the company in conjunction with senior management. Senior debt financing for the transaction was provided by Antares Capital Corp., Madison Capital Funding LLC and Merrill Lynch Capital. Barrington Associates acted as financial advisor to Harris Research.

Halsey Pharmaceuticals today announced that it has completed a private offering of 5% convertible senior debentures in the aggregate principal amount of approximately $26.385 million. The lead investors in the offering were Essex Woodlands Health Ventures, Care Capital LLC and Galen Partners III. The terms of the offering provide for additional investors in an amount that would raise the total aggregate principal amount of the offering to $35 million.
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