PE Week Wire — Tuesday, August 2

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Returns, Nightmares and More…

Thomson Venture Economics and the National Venture Capital Association this morning released domestic venture capital and leveraged buyout fund performance data through the end of Q1 2005, with some mixed results. One-year and five-year horizon figures for venture capital funds declined to 3.6% and -6.3%, respectively, while three-year horizon returns rose to -1.4% (10 and 20-year horizon returns remained fairly constant). Overall, however, fairly uninspiring across the board, even when J-curve effects are taken into account. Here’s the data:

Venture Economics’ US Private Equity Performance Index (PEPI)
Investment Horizon Performance through 03/31/2005

Fund Type	1 Yr	3 Yr	5 Yr	10 Yr	20 Yr
Early/Seed VC	1.4	-5.5	-8.6	45.8	19.8
Balanced VC	5.8	1.2	-4.2	17.0	13.0
Later Stage VC	-0.4	0.6	-6.6	15.2	13.7
All Venture	3.6	-1.4	-6.3	25.4	15.6
Small Buyouts	24.1	5.4	1.6	8.7	26.7
Med Buyouts	17.8	4.3	-3.2	10.6	17.7
Large Buyouts	16.8	9.6	0.9	10.9	14.5
Mega Buyouts	20.6	9.0	2.7	7.7	9.7
All Buyouts	19.8	8.5	1.8	8.7	13.0
Mezzanine	8.5	3.7	1.8	6.9	9.2
All Private Equity	14.0	5.3	-0.5	12.5	13.8
NASDAQ	0.3	2.7	-15.3	9.4	11.4
S & P 500	4.8	1.0	-4.7	9.0	10.8

*The Private EquityPerformance Index is based on the latest quarterly statistics from Thomson Venture Economics? Private EquityPerformance Database analyzing the cashflows and returns for over 1750 USventure capital and private equity partnerships with a capitalization of $585 billion. Sources are financial documents and schedules from Limited Partners investors and General Partners. All returns are calculated by Thomson Venture Economics from the underlying financial cashflows. Returns are net to investors after management fees and carried interest. Buyout funds sizes are defined as the following: Small: 0-250 $Mil, Medium: 250-500 $Mil, Large: 500-1000 $Mil, Mega: 1 Bil +

***Financial folks always like to talk about the old Burning Bed deal, and I think part of the fascination is simply the alliterative nickname. But the Akins buyout ultimately has proven to be a folly of similar stature ? although the specifics are obviously different ? so it too deserves a name that will cause it to be endlessly referred to at conferences. How about the Nutritional Nightmare?

***Someone the other day asked me where all of our reporters are located. I responded that I was based in Boston, that Jerry Borrell roved throughout Asia and that we had bureaus in New York, San Francisco and London. I also added that we once had a regular freelancer based in Brazil, but that the Brazilian/Argentine economic crises brought with them a giant sucking sound of private equity interest in Latin America. As such, it no longer seems to justify fulltime coverage.

Not only was this answer justifiably offensive to Wire readers working in the region, it also is at odds with at least a handful of U.S.-based firms that are ramping up their interest. A few weeks back saw Darby Overseas committing at least another $100 million to buyouts of Brazilian companies, and now Boston-based Advent International is raising its third Latin America fund, according to a variety of regulatory filings. It?s hard to get a firm read on the target size, but it seems to be a bit under $200 million, with lots of commitments already in from groups like HarbourVest Partners and The Alcoa Master Trust. The firm?s previous Latin American fund was capped at $265 million in 2000.

LatAm is one of those emerging markets that come with levels of risk unimaginable in Palo Alto or Waltham, but firms like Darby and Advent seem to be making a calculated bet that the hazards will be outweighed by the competitive void (particularly when compared to Asian emerging markets). Could be interesting to see if other firms that used to have LatAm programs will come back?

***Thank you Tampa Bay Devil Rays for saving Theo Epstein from himself. Someone needed to do it…

Top Three

 

Summit Partners has acquired a 33% equity position in Coast Asset Management LLC, a Santa Monica, Calif.-based alternative inv*stment manager serving institutional and high-net-worth clients. The transaction was valued at approximately $126.8 million. www.summitpartners.com www.coastasset.com

Vista Equity Partners has agreed to acquire MSDI Mobile Data Solutions Inc. (TSX: MMD; Nasdaq: MDSI), a British Columbia, Canada-based provider of mobile workforce management software. The total transaction is valued at approximately US$70 million, or $8 per share. The deal is expected to close late next month, assuming both regulatory and shareholder approvals. www.vistaequitypartners.com www.mdsi.ca

Nujira Ltd., a Cambridge, UK-based developer of power amplifier technology for the wireless industry, has raised $7.75 million in Series A funding. 3i Group and seed backer Amadeus Capital Partners co-led the deal, and were joined by existing shareholders Cambridge Gateway Fund, Cambridge Capital Group and the Cambridge Angels. www.nujira.com

VC Deals

Kiyon Inc., a La Jolla, Calif.-based provider of broadband wireless mesh networking systems, has raised $10 million in Series B funding. Siemens Venture Capital led the deal, and was joined by the Jacobs Capital Group. www.kiyon.com

Lucid, a Tel Aviv, Israel-based developer of advanced processing solutions for 3D graphics, has raised $4 million in first-round funding co-led by Giza Venture Capital and Genesis Partners.

Buyout Deals

Welsh, Carson, Anderson & Stowe has participated in a recapitalization of AGA Medical Corp., a Golden Valley, Minn.-based maker of medical devices for use in cardiovascular applications. Company CEO and co-founding shareholder Franck Gougeon led the deal and becomes AGA?s new majority shareholder, while the transaction also included the buyout of AGA?s previous founding shareholders, new equity and subordinated notes from WCAS and the creation of new senior loan facilities. www.amplatzer.com www.welshcarson.com

The Carlyle Group and Eurazeo have agreed to sell their 100% stake in Groupe Terreal, a France-based maker of clay construction products, to LBO France for 860 million euros. www.eurazeo.com www.terreal.com

General Electric Co. (NYSE: GE) is in talks to acquire certain parts of oilfield services company Vetco International Ltd. from 3i Group, Candover and JPMorgan Partners, according to The Wall Street Journal. The deal could be valued at more than $1 billion.

Barclays Private Equity has sold its stake in Fosbel Holding Ltd. to American Capital Strategies for approximately Gbp57 million. Fosbel is a UK-based provider of ceramic welding maintenance and repair services to coke oven and glass furnace operators. Barclays sponsored a Gbp20 million management buyout of Fosbel in July 2003. www.fosbel.com

T-Mobile International AG reportedly has bid 1.3 billion euros to buy Austria-based mobile phone company Tele-Ring from Western Wireless Corp. (Nasdaq: WWCA), which just agreed to be acquired by Alltel Corp. (NYSE: AT). This is approximately 70 million euros higher than an existing offer from UK-based private equity firm Permira. Neither group has been allowed to see Tele-Ring?s books, according to Austrian newspaper Presse.

Manchester Technologies Inc. (Nasdaq: MANC) has received shareholder approval of a $56 million buyout offer from Caxton-Iseman Capital. Also included in the deal is Manchester subsidiary Electrograph Systems Inc., which distributes plasma display monitors. www.emanchester.com

Apax Partners has sold 2.5 million shares of its holdings in Life Time Fitness Inc. (NYSE: LTM), generating approximately $90 million. www.apax.com

Jubilant Organosys Ltd., an India-based provider of outsourced manufacturing and research services to the global pharmaceutical market, has sold 990,000 newly-issued equity shares to General Atlantic for approximately Rs1.09 billion (approx. $25 million). GA held a 4.98% ownership stake prior to the deal, and now will own around 8.39 percent. www.jubl.com www.generalatlantic.com

The Carlyle Group has agreed to buy a 12% stake in Germany-based diesel engine maker MTU Friedrichshafen for an undisclosed amount, according to AFX News. The sellers are family shareholders, as the remaining 88% is owned by DaimlerChrysler.

Goldman Sachs received European Union approval for its pending acquisition of German packaging materials company Treofan Group. The debt-for-equity deal will result in existing Treofan creditors Bain Capital and DOR Chemicals Ltd. becoming minority shareholders.

SeatonCorp., a Chicago-based provider of staffing and recruitment services, has received an undisclosed amount of private equity funding from Leeds Weld & Co. SeatonCorp is the parent company of both Staff Management and PeopleScout. www.seatoncorp.com

PE-Backed IPOs

ArcSoft Inc., a Fremont, Calif.-based, provider of digital media software and firmware has withdrawn its proposed $46 million IPO, citing current market conditions. The company filed for the IPO last August, with RBC Capital Markets serving as lead underwriter. It had raised a small amount of VC funding from Taiwan-based Alliance III Venture Capital Corp. www.arcsoft.com

PE-Backed M&A

Dexterra Inc., a Bothell, Wash.-based provider of mobile workforce and field service software, has acquired Toronto-based OctaneWave for an undisclosed amount of cash and Dexterra stock. In order to help finance the acquisition, Dexterra also raised $11 million in third-round funding from return backers Canaan Partners, Motorola Ventures, Intel Capital, SagusCapital and Sigma Partners. www.dexterra.com

Continuum Photonics Inc. of Billerica, Mass. has agreed to merge with fellow optical switch subsystem company Polatis Ltd. of Cambridge, UK. The deal is expected to close on August 15, with existing VC backers of both companies providing an undisclosed amount of additional growth capital. Continuum has raised over $35 million in venture funding since its 1998 inception, from firms like Flagship Ventures, Prism Venture Partners, JK&B Capital, Boston Millennia Partners, Harris and Harris Group, GE Capital, MTDC, Arcadian Venture Partners and Gainesborough Inv*stments. Polatis has raised over $20 million since its 2000 founding, from firms like 3i Group, Alta Berkeley, Prelude and EonTech. www.continuumphotonics.com www.polatis.com

Advanced Drainage Systems Inc., a Hilliard, Ohio-based maker of HDPE corrugated plastic piping, has acquired Hancor Inc., a Findlay, Ohio provider of drainage and water conservation solutions. No financial terms were disclosed. Advanced Drainage Systems has received private equity funding from Berkshire Partners.

Anthony International, a San Fernando, Calif.-based portfolio company of Aurora Capital Group, has acquired Pike Machine Products Inc., an Elizabeth, N.J.?based manufacturer of glass display doors for the supermarket, vending machine, restaurant, convenience store and wine chiller markets. RSM EquityCo Capital Markets served as exclusive financial advisor to Pike Machine Products.

Shandong ApS, a China-based private equity firm, has paid $2 million to acquire Commerce Energy Group Inc.?s (AMEX: EGR) minority holdings in Turbocorp BV, a Dutch holding company with inv*stments in the oil-free centrifugal compression industry. Shandong now is Turbocorp?s majority shareholder.

Firm & Fund News

The Carlyle Group has closed its fourth real estate fund with $950 million in capital commitments. www.carlyle.com

Human Resources

JP Gan has joined China-based wireless interactive entertainment company KongZhong.com Corp. (Nasdaq: KONG) as CEO. Gan previously served as a Hong Kong-based director for The Carlyle Group, focused on venture capital opportunities for Asian tech and business services companies. www.kongzhong.com

Edward Messman has joined Hercules Technology Growth Capital as managing director for the Southeast region. He will work out of the firm?s new office in Boulder, Colo., and previously served as the regional market manager of structured finance at Silicon Valley Bank. www.herculestech.com

Fried, Frank, Harris, Shriver & Jacobson LLP has elected 10 new partners. They are: Emil Buchman (corporate), Israel David (litigation), Michael de Leeuw (litigation), Michelle Gold (tax), Gary Kaplan (bankruptcy and restructuring), Walid Khuri (corporate, focused on fund-related work), J. Christian Nahr (corporate, focused on cross-border M&A), Harry Silvera (real estate), Paul Tropp (corporate) and Teresa Venezia (litigation). www.friedfrank.com

FRIDAY, JULY 28

Random Ramblings

I spent most of yesterday on a plane instead of on the phone, so just a few notes to move us into the weekend?

*** Legislation has been introduced to essentially revive the U.S. Small Business Administration?s venture capital program. Offered up by Rep. Don Manzullo (R-IL), the SBIC Participating Debenture Act of 2005 would replace the SBIC Participating Securities program that was shuttered last year, and would offer more SBA-friendly terms that theoretically would prevent the types of losses that plagued the older system. I?m not too up-to-date on this issue, so I asked colleague Matthew Sheahan for his take. The verdict, Matthew says, is that it?s far too early for a verdict since it is impossible to know what the final version will look like. As for its legislative prospects: ?The session ends today and it will be lucky to get passed this year, but the posturing that politicians have been doing on this for the past year leads me to believe they?ll be generally supportive. The Administration may be a bit harder to read. It?s hard to gauge how much support [President Bush] really has for the program, considering the way [he] let the old one die ? or be suspended, etc. ? last year.?

*** Life sciences VCs should be elated this morning that Sen. Bill Frist (R-TN) is formally supporting the Stem Cell Research Enhancement Act, which would lift President Bush?s 2001 edict that restricted the number of embryonic stem cell lines that could be used by researchers receiving federal funding.

The Majority Leader?s statement is up on his website, and his support could be influential enough to finally break the logjam on a bill that already has received House approval. It is worth noting that First believes the bill ? as currently written ? has several ?shortcomings? that he believes should be addressed, but the gist is that he now formally recognizes that current limitations are slowing ?our ability to bring potential new treatments for certain diseases,? and that the original promise of 78 available lines has been severely unfulfilled (only 22 are actually eligible). Bush may still veto it ? after all, you?d think he?d have to veto at least one bill during a two-term presidency ? but Frist?s support could ultimately help build a veto-proof majority. Welcome Dr. Frist ? it?s better late than never.

*** American Airlines should know better than to show ?Fever Pitch? on a flight to Boston. The only saving grace was that there wasn?t enough time to also screen ?Celtic Pride? as a double-feature.

*** Finally, grab a copy of the latest Economist magazine if it?s still on your newsstands (still the best written and thought-out business/political pub around, in my opinion). Interesting piece on women breaking through ? or, more specifically, not breaking through ? the C-level glass ceiling (CEO, CFO, COO, etc.). Private equity obviously doesn?t have the same corporate structure, but the number of female general partners remains distressingly low. Lots of female CFOs (at least judging by Tuesday?s conference), but very few who earn the big carry or sit on investment committees?.

Top Three

 

CVC Capital Partners of London has closed its fourth fund with 6 billion euros in limited partner commitments. It is the most capital ever raised by a European private equity fund. www.cvceurope.com

The Carlyle Group has agreed to acquire cable operator Insight Communications Company Inc. (Nasdaq: ICCI) for $11.75 per share. The deal values Insight at $2.1 billion, and includes $710 million of equity. The acquiring group also includes Insight Communications co-founders Sidney Knafel and Michael Willner. www.carlyle.com

Rob Chaplinsky is transitioning out of his general partner role with Mohr, Davidow Ventures, where he has led the firm?s semiconductor effort. He continues to maintain his MDV board seats (at least for now) and an office in MDV?s Menlo Park headquarters. No details yet on his future plans, except that it will be in the private equity space, and that he will retain an informal relationship with MDV. www.mdv.com

VC Deals

Digital Harbor Inc., a Reston, Va.-based provider of software for building and using composite applications, has raised $11 million in Series B funding. FTVentures led the deal, and was joined by return backer Insight Venture Partners. www.digitalharbor.com

Whaleback Systems Inc., a Portsmouth, N.H.-based provider of broadband phone systems for the enterprise, has raised $3 million in Series A funding from Ascent Venture Partners. www.whalebacksystems.com

WestBridge Capital Partners and Sequoia Capital have teamed up to acquire a 15% stake in IndiaTimes.com from Indian publishing group Bennett Coleman, according to The Financial Times. The $36 million deal values IndiaTimes.com at $240 million, and represents a loss for fellow bidder 3i Group.

Oxsensis Ltd., a UK-based developer of advanced instrumentation for gas turbines in the aviation and power sectors, has received Gbp890,000 in venture funding at a post-money valuation of approximately Gbp2 million. Participants included Strathdon Inv*stments, Seven Spires Inv*stments and the Rainbow Seed Fund. www.oxsensis.com

Buyout Deals

PAI Partners has closed its $1.4 billion acquisition of the food ingredient operations of Denmark-based Chr. Hansen Holding. www.paipartners.com

MacQuarie North America Ltd., an Australia-based private equity firm, has offered $2.1 billion for Ontario, Canada?s electronic land registry service (Teranet Inc.), according to The Globe & Mail. Teranet became a private company in 2003, when the government sold it to a group of pension funds and Montreal-based Eric Baker. It is unclear if government regulators would allow the company to be acquired by a non-Canadian firm.

ABN AMRO Capital has sponsored a management buyout of Nueva Terrain, a Vitoria, Spain-based maker of tubes and accessories for residential plumbing, heating and drainage systems. No financial terms were disclosed. www.abnamro.com www.nuevaterrain.com

SunGard (NYSE: SDS) shareholders yesterday approved the $36 per share buyout offer from Silver Lake Partners, Bain Capital, The Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co., Providence Equity Partners and Texas Pacific Group. The $11.3 billion deal is expected to close on August 11, and will be the second-largest leveraged buyout in history. www.sungard.com

Hyundai Motor Corp. reportedly is preparing a bid of up to $2 billion for a majority stake in South Korean auto parts maker Mando Corp. The position is being offered up a private equity group that includes JPMorgan Partners and Affinity Capital.

Cortec Group, a New York-based private equity firm, has agreed to sell Royce Medical Holdings to Iceland-based prosthetics company Ossur HF for approximately $216 million. Royce is a Camarillo, Calif.-based maker of orthotic products. www.ossur.com

Oracle Corp. (Nasdaq: ORCL) reportedly is interested in acquiring a control position in I-Flex Solutions Ltd., an India-based maker of banking software that recently was put on the auction block by Citigroup Venture Capital. Press reports value the 43% stake at approximately $675 million. www.oracle.com www.iflexsolutions.com

Industrias CH SA de CV of Mexico has acquired Republic Engineered Products Inc., a Fairlawn, Ohio-based producer of special-bar quality (SBQ) steel that had been majority-owned by Perry Capital. No financial terms were disclosed.

PE-Backed IPOs

Golf Galaxy Inc., an Eden Prairie, Minn.-based retailer of golfing goods, priced 3.95 million common shares at $14 per share, for an IPO take of approximately $55.3 million. It had filed to sell 3.33 million shares at between $11 and $13 per share. Piper Jaffray and William Blair & Co. served as lead underwriters, and the company will trade on the Nasdaq under ticker symbol GGXY. Significant shareholders include William Blair Capital Partners, Primus Capital and FdG Capital Partners. www.golfgalaxy.com

PE-Backed M&A

Capella Healthcare Inc. of Brentwood, Tenn. has agreed to buy five hospitals from HCA Inc. (NYSE: HCA) for an undisclosed amount. The facilities include: Grandview Medical Center in Jasper, Tenn.; River Park Hospital in McMinnville, Tenn.; Southwestern Medical Center in Lawton, Okla.; Capital Medical Center in Olympia, Wash.; and North Monroe Medical Center in Monroe, La. Capella was formed earlier this year by private equity firm GTCR Golder-Rauner as an acquisition and holding platform in the acute-care hospital space. www.gtcr.com

DaVita Inc. (NYSE: DVA) has agreed to sell 70 freestanding renal dialysis centers to Nashville, Tenn.-based RenalAmerica Inc. for $320.5 million in cash. Welsh, Carson, Anderson & Stowe is helping RenalAmerica finance the acquisition. www.davita.com

Firm & Fund News

Apollo Management has increased the maximum cap for its sixth buyout fund to $10 billion, according to Private EquityInsider. It originally began fund-raising with a $6 billion target.

Brynwood Partners of Greenwich, Conn. has closed its fifth private equity fund with $250 million in committed capital. The firm had held a first close on the fund in August 2004. www.brynwoodpartners.com

Human Resources

Ken Ludlum has joined Morgenthaler Ventures as an entrepreneur-in-residence, focused on opportunities in the medical devices space. He most recently served as chairman, president and CEO of Revivant Inc., a Sunnyvale, Calif.-based provider of an automated, hands-free CPR device. www.morgenthaler.com

Guy du Parc Braham has joined Goldman Sachs? European leveraged buyout team as a managing director, after having served in a similar role with Deutsche Bank. www.gs.com

Daniel Regis, a managing director of Digital Partners, has been named chairman of the board of directors at Art Technology Group Inc. (Nasdaq: ARTG), effective immediately. He has served on the board since ATG?s October 2004 acquisition of Primus Knowledge Solutions, and replaces Paul Shorthouse, who is leaving to devote his energies to an unnamed Massachusetts startup company. www.atg.com

Patrick Sullivan has joined Warburg Pincus as a New York-based managing director focused on domestic real estate opportunities. He previously worked in the real estate group of JPMorgan Partners. In other Warburg Pincus real estate team news, the firm recently added Pedro Aznar to its London office. www.warburgpincus.com

Ritchie Capital Management has hired: Bill DeMars as senior managing director of the firm?s life science and tech finance group, after previously working with GE Commercial Finance as managing director of technology lending; Mark King as head of risk for the life science and tech finance group, after having served as senior vice president of risk management for GE Commercial Finance; and Michael Marziani as managing director of the life science and tech finance group, after having been a senior vice president with GE Commercial Finance, where he originated debt facilities for emerging and growth-stage tech, life sciences and energy companies. www.ritchiecapital.com

THURSDAY, JULY 27

Let Me Rephrase

Based on some of feedback I received about yesterday?s column, some of you may have gotten the wrong idea that I was advising private equity firms to violate SEC regulations or that journalists should assist firms in doing so. This certainly was not my intent ? nor do I believe I did so ? but the matter deserves a bit more clarification. All apologies for my apparent lack of adequate articulation. So let?s discuss a bit further?

Regulation D under SEC rules includes the following language in regards to the private placement of a fund:

Neither the issuer nor any person acting on its behalf shall offer or sell the securities by any form of general solicitation or general advertising, including, but not limited to, the following: (1) Any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio; and (2) Any seminar or meeting whose attendees have been invited by any general solicitation or general advertising.

Fund formation attorneys everywhere have interpreted this clause as requiring their clients to decline any discussion of fund-raising with the press.

I certainly understand where the ?Don?t talk fund-raising with the press? advice comes from. I also should acknowledge that every attorney I?ve spoken with seems to impart similar statements (even though some privately admit that it is an exercise in extreme caution). Where it seems I differ, however, is in interpreting the actual Reg D language. This admittedly comes off as arrogant for someone whose only exposure to law school is his mother?s hopes and dreams (happy belated b-day mom), but here goes?

The most important words in the clause, to me, are ?offer or sell the securities by any form of general solicitation or advertising.? Everything else is predicated on this phrase, including all that stuff about articles, etc. In short, I simply do not believe that responding to a reporter?s question about a news event (which fund-raising is, at least for the trade press) constitutes offering or selling anything, so long as the GP doesn?t say something like: ?Yeah, we?re looking for $200 million, and really could use some additional public pension funds in the Southeast, so please call our placement agent at 555-1000.? Replies like, ?Yes, your information is correct? or ?We hope to conclude fund-raising by next month? are in no way offering or selling anything, and likewise do not constitute solicitation or advertising (so long as no one paid or specifically requested to have the article published). Spinning and soliciting are not equivalents.

In closing, I?d like to reiterate that I never meant to suggest that firms stealthily violate SEC rules by speaking to the press while fund-raising. Instead, I believe that the SEC rules do not restrict such conversations, so long as they are initiated by a reporter, are for the primary purpose of news-gathering rather than for offering/selling (assuming that the reporter/publisher has no financial stake in the fund) and does not disclose anything that could reasonably be viewed as likely to damage to the fund. But, again, I’m no lawyer, so you’ll have to make your own determinations…

Top Three

 

Alien Technology Corp., a Calif.-based RFID company, has raised $66 million in Series H funding. SunBridge Partners led the deal, and was joined by return backers Advanced Equities, Digital Bandwidth, Equitek Capital, Lago Ventures and Miami Valley Venture Fund. Alien Technology has raised more than $200 million in total VC funding since its 1999 inception. www.alientechnology.com

The Carlyle Group has agreed to acquire inv*stment and financial management software provider SS&C Technologies Inc. (Nasdaq:SSNC) for approximately $941 million, or $37.25 per share in cash. Leverage will be provided by Wachovia, JPMorgan and Bank of America. Also as part of the deal, SS&C CEO William Stone will contribute certain of his shares of SS&C common stock in exchange for 28% of the equity in an acquisition vehicle being created by Carlyle for the purposes of this deal. www.carlyle.com www.ssctech.com

Sandy Weill has decided to remain as chairman of Citigroup until his previously-scheduled resignation next April. He had generated controversy within Citigroup by expressing interest in an earlier departure so that he could form a $5 billion private equity fund with Saudi Arabia’s Prince Alwaleed bin Talal (a top Citigroup shareholder).

VC Deals

Altea Therapeutics, a Tucker, Ga.-based developer of trans-dermal patches for the delivery of proteins and water-soluble drugs, has raised more than $30 million in Series C funding. Aperture Venture Partners led the deal, and was joined by return backers Domain Associates, Venrock Associates and vSpring Capital, together with KBC, Quilvest, CX Ventures and Rockport Ventures. www.alteatherapeutics.com

BladeLogic Inc., a Waltham, Mass.-based provider of data center automation, has raised $6.8 million in Series D funding, according to a regulatory filing. MK Capital was joined on the deal by return backers Battery Ventures, Bessemer Venture Partners and Globespan Capital Partners. BladeLogic has raised approximately $35 million in total VC funding since its 2001 inception. www.bladelogic.com

StarGen Inc., a Marlborough, Mass.-based fablesss semiconductor company, has raised $15.86 million in Series B-1 convertible preferred funding, according to a regulatory filing. The company has raised over $70 million in VC funding since its 1999 inception, from firms like St. Paul Venture Capital, Intel Capital, Morgenthaler Ventures, Ironside Ventures and Commonwealth Capital Ventures. www.stargen.com

Ecrio Inc., a Cupertino, Calif.-based provider of software for voice and data services on fixed and mobile networks, has raised $3 million in Series B funding, according to a regulatory filing. MTFG Venture Capital of Tokyo participated on the deal, alongside return backers Nexit Ventures and Cdb Web Tech. www.ecrio.com

Buyout Deals

Nautic Partners has sponsored a recapitalization of American Communications Resource Inc., an Egan, Minn.?based reseller of Avaya voice and data communications systems to corporations. The deal was done in partnership with company management, and NACR CEO Tom Roles retained a substantial equity interest and will continue to lead the company. No other financial terms were disclosed. www.nacr.com

Can-Con Gas Service Ltd., an Edmonton-based maker and distributor of fittings for oil and gas transport pipelines, has been acquired by an undisclosed Canadian buyout group. RSM EquiCo Capital Markets served as advisor to Can-Con on the deal. No financial terms were disclosed.

The Courtney Group has led a buyout of Borga Inc., a Fowler, Calif.-based manufacturer of pre-engineered metal buildings and components. Other participants included Hancock Park Associates, Pegasus Management and Borga president Johan Gidstedt. No financial terms were disclosed. www.thecourtneygroup.com www.borga.net

ResMAE Financial Corp., a Brea, Calif.?based wholesale residential mortgage originator and servicer, has received a $100 million inv*stment from TPG-Axon Capital. www.resmae.com

Arbor Private Inv*stment Co. has completed its acquisition of Allied Specialty Foods Inc., a Vineland, N.J.-based maker of specialty raw and fully-cooked beef and poultry items. No financial terms were disclosed. Steven Zoll, an Arbor operating partner and former president of ConAgra Foods Refridgerated Foodservice Co., will serve as Allied?s chairman, while Susan Spencer will retain her role as company president. www.arborpic.com

U.S. Equity Partners has made a bid for the business information assets of KKR-controlled Primedia Inc., according to The Deal. The group?s bid is reported to be worth between $380 million and $390 million, and will have to compete with competing offers from groups backed by The Blackstone Group and Spectrum Equity Inv*stors. www.primedia.com

General Atlantic is expected to offer around $240 million for a 20% stake in the New York Mercantile Exchange (NYMEX), according to The Wall Street Journal. NYMEX already has a standing offer for the position from The Blackstone Group and Battery Ventures, which reportedly was raised last month from $180 million to $200 million.

PE-Backed IPOs

IRobot Corp., a Burlington, Mass.-based maker of the Roomba floor vacuuming robot, has filed to raise $115 million via an IPO of common stock. It plans to trade on the Nasdaq under ticker symbol IRBT, with Morgan Stanley and JPMorgan serving as lead underwriters. Significant shareholders include Acer Technology Ventures (13.1% pre-IPO stake), Trident Capital (11%), First Albany (7.1%) and Fenway Partners (6.7%). www.irobot.com

Advanced Life Sciences Holdings Inc., a Woodridge, Ill.-based pharmaceutical company, has changed its proposed IPO terms to 5 million common shares being offered at between $8 and $9 per share. It originally filed to sell 4.5 million shares at between $11 and $13 per share. The company plans to trade on the Nasdaq under ticker symbol ADLS, with C.E. Unterberg Towbin and ThinkEquity Partners serving as lead underwriters. ALS was recapped last December, with Flavin Ventures taking a majority ownership position. Flavin Ventures is a business accelerator run by ALS founder and CEO Michael Flavin, but it also has other portfolio companies. Abbott Labs is also a significant shareholder. www.advancedlifesciences.com

DealerTrack Holdings Inc., a New York-based provider of software and data solutions for the auto retail industry, has filed to raise $172.5 million via an IPO of common stock. It plans to trade on the Nasdaq under ticker symbol TRAK, with JPMorgan and Lehman Brothers serving as lead underwriters. Significant shareholders include J.P. Morgan Chase and GRP Partners. www.dealertrack.com

Patriot Capital Funding Inc., a Westport, Conn.-based business development company sponsored by Compass Group International, has priced around 9.33 million common shares at $14 per share, for an IPO take of approximately $130 million.

Vincera Inc., Austin, Texas-based provider of user activity management software, has withdrawn registration for a proposed $9.29 million IPO on the OTC BB, because it ?has not obtained the approvals of state securities regulators in a timely manner. The company was founded in 1999 as MoveMoney.com Inc., and later changed its name to Smarte Solutions. In August 2004, it acquired Vincera Software Inc., and changed its name to Vincera. Draper Fisher Jurvetson is listed as a significant shareholder. www.vincera.com

PE-Backed M&A

WIL Research Laboratories, an Ashland, Ohio?based pre-clinical contract research organization, has acquired NOTOX Beheer BV, a Dutch provider of safety assessment and product development-related toxolicological services. The deal is valued at $60 million, with leverage provided by ABN Amro Bank. WIL Research Laboratories was acquired by Behrman Capital acquired WIL as part of a management buyout in September 2004, while TPG Ventures provided equity in connection to the NOTX acquisition. Behrman currently holds approximately 80% of the combined company, with TPG Ventures and company management holding the remainder. www.wilresearch.com

3i Group is selling its stake in UK-based wireless technology company UbiNetics to Cambridge Silicon Radio for approximately $48 million. The deal comes just months after the sale of UbiNetics? test and measurement business to Aeroflex, and represents a bit of circularity for 3i, which had backed Cambridge silicon Radio prior to its April 2004 flotation on the London Stock Exchange. www.3i.com www.ubinetics.com www.csr.com

Netcentrex, a France?based provider of converged voice and video solutions, has agreed to acquire France-based session border control company NeoTIP. Netcentrex has raised VC funding from such firms as CDC Enterprises Innovation, Crescendo Venture Management, Innovacom, Intel Capital, Newbury Ventures and T-Venture Holdings. www.netcentrex.net www.neotip.com

ActivCard Corp. (Nasdaa: ACTI) has agreed to acquire Protocom Development Systems Pty Ltd., an Australia-based provider of credential management solutions. The deal is valued at approximately $28 million, including $21 million in cash plus the issuance of 1.65 million shares of ActivCard common stock. Protocom shareholders also could receive up to 2.1 million additional ActivCard shares upon the achievement of an $18.7 million revenue milestone. Protocom has raised VC funding from Australia?s Equity Partners Management Pty Ltd. www.activcard.com www.serversystems.com

Fiserv Inc. (Nasdaq: FISV) has agreed to acquire BillMatrix Corp., a Dallas, Texas?based provider of electronic bill payment services. The deal is valued at approximately $350 million. BillMatrix was backed by Great Hill Partners, while Lane, Berry & Co. served as BillMatrix?s exclusive financial advisor on the deal. www.fiserv.com

Firm & Fund News

New Leaf Venture Partners announced its launch today, featuring the former members of Sprout Group?s healthcare technology team. It will continue to manage Sprout?s healthcare tech portfolio, which is valued at over $800 million.

Human Resources

Chrysalis Ventures has promoted Wright Steenrod from senior associate to principal. He joined the firm in June 2001, and focused on the media and communications sectors. www.chrysalisventures.com

William Flanz has been named to the inv*stment committee of Baring Private EquityAsia. He has served as a senior advisor to the group since January 2003, and previously served as CEO of Sterling Enterprises Ltd. Among his other current roles are an advisory spot with both Sterling and with Boston-based buyout firm J.W. Childs. www.bpep.com

Ed Neihaus, a partner with Cypress Ventures, has joined the board of the Foresight Nanotech Institute, a Menlo Park, Calif.-based think tank and public interest organization focused on nanotech. The group?s board also will welcome Peter Diamandis, CEO of the X Prize Foundation and CEO of Zero Gravity Corp., and James Von Her II, founder and CEO of Zyvex Corp. www.foresight.org

WEDNESDAY, JULY 26

Random Ramblings

My keynote address yesterday to the Private Equity CFO conference discussed how private equity firms ? and their CFOs, in particular ? should handle journalists who come looking for information on fund-raising and personnel changes (from the perspective of a firm?s best interest, not that of journalists). The talk was fairly long given how fast I generally speak, but the gist of the fund-raising piece was as follows:

Almost every fund formation attorney currently tells his or her clients to avoid all fund-raising discussions with the media until a final close. It?s kind of like an informal quiet period, designed to protect safe harbor exemptions under Regulation D. This is fine, except that talking to the press during fund-raising can produce certain benefits. For example, if a new fund-raising effort is mentioned in this space (typically for a non-brand-name firm), it could spark the interest of a pension fund manager who hadn?t yet seen the book, and possibly wouldn?t have seen the book (this has happened on numerous occasions).

Moreover, safe harbor under Reg D means that you have to put together an actual Reg D filing, which folks like me read. Why does this matter? Because to save the time and cost of multiple filings, many firms fill out Reg Ds with fund max caps, not fund targets. If you decline to comment when a reporter calls about the filing, he?ll have little choice but to assume that the ?offering price? listed on the Reg D is a target, when it really may be a max cap. So imagine you?ve got a book price of $150m and a cap of $200m. You close on an oversubscribed $175m, but there is now a report out there saying that you had a $200m target. The result can be artificial fund-raising failure, when the reality is fund-raising success. Lots of firms have been known to retroactively reduce fund-raising targets for PR purposes, so few journalists will buy the ?We were only looking for $150m? statement following a final close.

So what to do? My best advice is to split the difference. Talk to reporters (ones you trust) about your fund-raising if asked, but only on a condition of background that can?t be directly linked to you or your firm. This tact won?t wake the SEC, will prevent LPs from potentially complaining about pre-close publicity, could attract new sources of capital and prevent the dissemination of misinformation.

*** In last week?s column on Seattle Biodiesel, I mentioned that the company?s first institutional round of funding could, in part, take the form of a project finance deal. For guidance on how this might look, New Energy Capital (backed by VantagePoint Venture Partners) has led a $10 million financing deal for Mid-Atlantic Biodiesel Co., which just broke ground on a new facility in Delaware. Lots of talk with folks yesterday about the clean-tech/energy-tech space, particularly with how it looks like CalPERS is finally ready to make good on its promise to support funds focused on the space.

*** Charity Auction update: I am still working out the tech angles, but am pleased to announce the two non-profits that will split the auction’s proceeds: Third Street Community Center in San Jose, Calif., and YouthBuild Bostonin Boston. Each organization has a program focused on digital divide issues, providing basic computer training courses and refurbished computers to lower-income residents of their respective communities. Please check out their websites for more info (look at the DECLA program for Third St., and the Tech & Training Program for YouthBuild Boston), and please keep the donations rolling in.

Top Three

 

Cendant Corp. (NYSE: CD) has agreed to sell its marketing services division to an affiliate of Apollo Management for approximately $1.83 billion. www.cendant.com

 

Macrovision Corp. (Nasdaq: MVSN) has agreed to acquire Trymedia Systems Inc., a San Francisco-based provider of secure digital distribution products and services for the video gaming industry. The deal is valued at $34 million in cash, and is expected to close this week. Trymedia has raised around $5.6 million in VC funding from such sources as Intel Capital and Dot Edu Ventures. www.macrovision.com www.trymedia.com

France Telecom has won the auction for an 80% stake in Spanish mobile phone company Amena from Auna SA, with a bid of 6.4 billion euros. The victory signals a loss for a pair of private equity consortia. The first was led by KKR (which dropped out late last week), while the other was led by Providence Equity Partners.

VC Deals

Revenue Cycle Solutions Inc., a Westchester, Ill.-based provider of outsourced receivable management services to hospitals, has raised $12.4 million in venture funding from Austin Ventures and InvestRx. The company also secured a $4 million credit facility from Silicon Valley Bank. www.revcs.com

Knovel Corp., a Binghamton, N.Y.-based provider of Web-based information services, has raised around $3.23 million in Series C funding, plus another $1.25 million in convertible note financing. Credit Suisse First Boston led the deal on behalf of the New York State Common Retirement Fund. Other participants included Himalaya Capital Venture Partners, New York Small Business Technology Investment Fund, Silicon Alley Venture Partners, Milestone Venture Partners and Stonehenge Capital. www.knovel.com

Salis Inc., a Roswell, Ga.-based provider of state and local tax management services, has raised around $3.5 million in funding from Baird Venture Partners and existing shareholder Austin Ventures. www.salisinc.com

TravelPost.com Inc., a San Francisco-based provider of hotel reviews and travel journals, has raised more than $1 million in need funding from firms like Amicus Capital and Arba Seed Inv*stment Group. www.travelpost.com

Fluid Logic LLC, a Portland, Ore.-based specialty chemicals company focused on colloidal silicas, has received a ?significant inv*stment? from Riverlake Partners. No additional terms were disclosed. www.riverlakepartners.com

PeerMe Inc., a Mountain View, Calif.-based P2P communications technology company focused on enabling secure Internet connections, has raised $1.5 million in new venture funding. www.peerme.com

Buyout Deals

 

Blacksand Energy LLC, a Houston-based oil and gas company, has completed a financial recap that includes up to $50 million in equity commitments from Kayne Anderson Capital Advisors, Jefferies Capital Partners and Wells Fargo Energy Capital. Blacksand also received a loan commitment from Wells Fargo.

CrimStone Partners has acquired AAA Pallet for an undisclosed amount. AAA Pallet is an Irving, Texas-based maker of wood pallets, and was advised on the deal by RSM EquiCo Capital Markets. No financial terms were disclosed. www.aaapallet.com

The Carlyle Group and Caterpillar Inc. (NYSE: CAT) are in talks to acquire a 51% stake in China-based Xugong Machinery from Xuzhou Construction Machinery Group, according to The South China Post.

Texas Pacific Group is in talks to sell its 35% stake in Ducati Motor Holdings SpA, according to Italian press reports. Multiple groups are said to be interested in the deal.

AlpInv*st Partners reportedly has bought a 50% stake in Dutch travel agency Sunweb Vliegreizen for an undisclosed amount. www.alpinvest.com

PE-Backed IPOs

Pike Electric Corp., a Mt. Airy, N.C.-based provider of outsourced electric distribution and transmission services, priced 13.5 million common shares at $16 per share (high end of $14-$16 range), for an IPO take of approximately $216 million. It plans to trade on the NYSE under ticker symbol PEC, while Citigroup and JPMorgan served as lead underwriters. Pike Electric was acquired in 2002 by Lindsay Goldberg & Bessemer, which planned to sell over 3 million shares in the IPO. Lindsay Goldberg & Bessemer also was to receive a $4 million management agreement termination fee once the company went public. www.pike.net

LifeCycle Pharma, a Danish biotech company focused on cardiovascular disease and immunosuppression, has hired Morgan Stanley to manage an IPO, according to Reuters. Shareholders include Alta Partners, Novo AS, Nordic Biotech Advisors and Lacuna Apo BioTech Fonds. www.lifecyclepharma.com

PE-Backed M&A

AXIA Health Management, a portfolio company of Nautic Partners, has acquired American WholeHealth Networks Inc., a Sterling, Va.-based provider of integrative medicine services and a network of complementary and alternative medicine practitioners for managed care organizations and health plans. No financial terms were disclosed. American WholeHealth had raised VC funding from such firms as Essex Woodlands Health Ventures, DLJ Merchant Banking, Frazier Healthcare Ventures, HLM Venture Partners, Kline Hawkes & Co., Prism Venture Partners and Sprout Group. www.axiahealth.com www.americanwholehealth.com

Atlantic Tele-Network Inc. (AMEX: ANK) has agreed to acquire a 95% stake in Commnet Wireless LLC, an Atlanta-based provider of wireless voice and data roaming networks in rural markets. The deal is valued at approximately $59 million (including repayment of $5.4 million in Commnet debt) in cash. Commnet is backed by such private equity firms as Summit Partners. www.atni.com www.commnet.com

Various Inc., the parent company of dating website company FriendFinder, has acquired Spring Street Networks Inc., a New York-based provider of online dating personals. No financial terms were disclosed. Spring Street has raised over $7 million in VC funding, with Battery Ventures serving as its primary backer. www.springstreetnetworks.com

Firm & Fund News

Viscogliosi Brothers LLC, a New York-based merchant bank focused on VC and private equity opportunities in the musculoskeletal and orthopedic sectors of the healthcare industry, has formed an I-banking subsidiary named Viscogliosi & Co. www.vcoinc.com

Edwards & Angell and Palmer & Dodge, a pair of corporate law firms, are in merger talks, according to The Boston Globe.

Industry Ventures of San Francisco is looking to raise upwards of $150 million for its fourth fund, according to a regulatory filing. www.industryventures.com

Human Resources

Battery Ventures has made two promotions: Roger Lee from partner to general partner, and Sunil Dhaliwal from principal to partner. Lee is based in Menlo Park, and is currently a board member at both Friendster and PrimeRevenue. Dhaliwal is based in Wellesley, Mass., and sits on the board of Netezza and as a board observer with CipherTrust. www.battery.com

Ingrid Swenson has joined Mayfield as controller, after previously having worked with PricewaterhouseCoopers. Mayfield is soon expected to close its twelfth fund with between $300 million and $350 million, according to sources familiar with the process. www.mayfield.com

Lawrence Friend has been named an advisor to the board of directors at Hercules Technology Growth Capital. Friend served as chief accountant to the SEC?s Division of Inv*stment Management from 1978 to 1998, at which point he joined PricewaterhouseCoopers? regulatory consulting group. www.herculestech.com

Jim Hoffman has joined The Pritzker Group, a merchant bank representing the Pritzker family interests, as a senior vice president. He previously served as a managing director in the M&A group at Robert W. Baird & Co. www.thepritzkergroup.com

Barry Lynn, a director with Shoreline Venture Management and CEO of Be eXel Management Inc., has joined the board of Alacritech Inc., a San Jose, Calif.?based provider of solutions enabling scalable networked systems. www.alacritech.com

TUESDAY, JULY 25

Disbursement Data and an Un-Raised Fund

A couple of notes before ironing out the old blue suit and head downstairs for the Private Equity CFO Conference (I know that you?re not supposed to iron suits, but my attempt to steam it was an abject failure).

*** Q2 2005 venture capital disbursement data was released this morning by the MoneyTree Three of PricewaterhouseCoopers, the National Venture Capital Association and Thomson Venture Economics (a unit of PE Week Wire publisher Thomson Financial). The short story is that 750 U.S.-based companies raised approximately $5.8 billion between April and June. This is a jump of 18.48% over Q1, although it?s a 4.94% drop Q2 2004 volume. It also is the third straight time that Q2 has outpaced its preceding Q1, with the proceeding third quarter volume dropping in both 2003 and 2004. In all, there has been around $10.46 billion raised in the first half of 2005, compared to $11.18 billion raised in the first half of 2004 (although the 2005 figures are expected to rise slightly as additional info comes into MoneyTree Central).

The quarter?s largest deal was the $311.77 million round for insurance startup Integro Ltd., while the $200 million for VC glutton Vonage came in second. The top five rounds out with a $100 million calldown for Jazz Pharmaceuticals, $63.21 million for Espirit Pharma and $63.21 million for Legend Pictures. In terms of sector, life sciences had a relatively strong showing by grabbing 28.85% of all VC disbursements, although it still can?t hold a candle to the unremitting IT sector (57.19%).

More VC dollars went into Northern California than into any other state region (per usual), although the New York Tri-State area unexpectedly jumped into the number two spot, no doubt aided by Integro and Vonage. Southern California came in third, with New England placing a disappointing fourth (it usually sits in second). Finally, later-stage deals made up 41% of all Q2 disbursements, which represents a 10-year high.

As regular readers know, I generally dismiss most of the fanfare that comes with disbursement data, since high or low deal volume doesn?t necessarily correspond to smart or dumb deal-making. For example, there were tons of deals done in 2000 and relatively few in 2002. Which overall portfolio would you prefer to hold? The proof is ultimately in the returns pudding.

That said, I have a generally favorable outlook toward the Q2 deal-making activity ? particularly since there seem to be fewer ?We need to spend this excess fund capital? transactions. One thing to keep watching out for, however, is the continued growth of next-generation, whiz-bang Internet deals. Part of this is simply perception since $3 million dotcom startups backed by Kleiner or Sequoia get far more pub (particularly from the VC blogs) than do $50 million drug deals backed by Domain or MPM. Nonetheless, there is a troubling truth that the exit prospects for many of these newfangled dotcomers seem inextricably tied to the continued success and buying power/interest of Google and Yahoo. Obviously it’s impossible to predict the exit environment in one year from now — let alone in five — but I’d think you’d like a bit of a wider M&A target window…

*** A reader yesterday asked: ?Why didn?t you mention the Bloomberg report that Blackstone Group closed its new fund with $12.5 billion?? My immediate reaction was ?Oh, $@$%,? so I called Blackstone to basically ask ?What the $@#@%.? Blackstone responded that Bloomberg jumped the gun, and that I should stop speaking in symbols. The $12.5 billion simply represents indications of LP interests (which shouldn?t surprise anyone in this contuing age of LP overhang), but that the firm is still a few months away from holding a first close, let alone a final one. This eventually will rank as the largest private equity fund in history, but not yet?

Top Three

 

Labcyte Inc., a Sunnyvale, Calif.-based provider of liquid and plate handling systems and plastic lab supplies for the life sciences market, has raised $21 million in Series C funding. Cross Atlantic Partners led the deal, and was joined by Hambrecht & Quist Capital Management and the Bay Area Equity Fund, plus return backers Abingworth Management, Alloy Ventures, Delphi Ventures and the Sprout Group. Labcyte Inc. was formed in October 2003 by the merger of Picoliter Inc. and Labcyte LLC. www.labcyte.com

Cisco Systems Inc. (Nasdaq: CSCO) has agreed to acquire Sheer Networks Inc., a San Jose, Calif.-based provider of intelligent network and service management products to service providers and large enterprises. The deal is valued at approximately $97 million in cash, plus the possibility of an additional $25 million in development and product milestone payments. Sheer Networks has raised around $56 million in total VC funding since its 1999 inception, from firms like JVP, JK&B Capital, Nortel Networks, Rein Capital, SVM Star Ventures. www.cisco.com www.sheernetworks.com

The California Public Employees? Retirement System (CalPERS) reported a 12.7% overall return for the one-year period ending June 30, 2005. Its alternative asset program generated the second-highest rate of return with 22.8 percent, trailing only the system?s real estate portfolio. www.calpers.com

VC Deals

Identrus LLC, a New York-based provider of identity authentication solutions, has raised $20 million in Series B funding. Enterprise Partners Venture Capital and Rho Ventures co-led the deal, and were joined by return backer Zions Bancorporation. www.identrus.com

Inlet Technologies Inc., a Raleigh, N.C.-based provider of encoding solutions for content creation and distribution, has raised $5 million in Series B funding. Participants include Technology Venture Partners, Telecommunications Development Fund and Capitol Broadcasting Co. www.inlethd.com

Buyout Deals

 

Vector Capital has agreed to acquire BroadVision Inc. (Nasdaq: BVSN), a provider of Web self-service software solutions, for $0.84 per share. Under a separate agreement with holders of Broadvision?s outstanding convertible notes, the company will receive approximately $16 million from Vector to retire the notes and associates warrants. The total transaction is expected to close by year?s end. www.broadvision.com

The Riverside Co. has acquired American Professional Bracing, an Eatontown, N.J.-based provider of back braces for people suffering from herniated discs and other serious back problems. No financial terms were disclosed. Riverside will combine APB with existing platform company FLA Orthopedics. www.riversidecompany.com www.apbracing.com

Insight Venture Partners has paid $63 million for a majority ownership position in Strategic Financial Solutions LLC, according to multiple press reports. SFS is a Reno, Nev.-based provider of software solutions for inv*stment professionals. http://pertrac.pertracnet.com

Berkshire Partners has agreed to acquire National Vision Inc. (AMEX: NVI) for $7.25 per share (42.16% premium over yesterday?s $5.10 closing price). In related news, National Vision agreed to acquire all the outstanding common stock of Consolidated Vision Group Inc. for approximately $88 million, including around $48 million in debt repayment. Consolidated Vision is a portfolio company of Kelso & Co. www.berkshirepartners.com www.nationalvision.com

The Carlyle Group, Thomas H. Lee Partners and Bain Capital are interested in the restaurants business of Pernod Ricard, according to The Boston Globe. The included brands would include Dunkin? Donuts, Baskin Robbins and Togo, which today are being acquired by Pernod Ricard as it closes its acquisition of Allied Domecq. Earlier press reports also suggested that The Blackstone Group is interested in the brands, after having lost out to Pernod Ricard in the Allied Domecq auction.

PE-Backed IPOs

ITC Holdings Corp., a Novi, Mich.-based electricity transmission company, priced 12.5 million common shares at $23 per share (above $19-$21 offering range). It will trade on the NYSE under proposed ticker symbol ITC, while Lehman Brothers, CSFB and Morgan Stanley served as lead underwriters for the IPO. ITC Holdings originally was the transmission unit of DTE Energy, but was bought out in 2002 for $610 million by Kohlberg Kravis Roberts & Co. and Trimaran Capital Partners. www.itctransco.com

Refco Inc., a New York-based provider of risk management and inv*stment services, has set its proposed IPO terms to 25 million common shares between $19 and $21 per share. The company plans to trade on the NYSE under ticker symbol RFX, with CSFB, Goldman Sachs and Banc of America Securities serving as lead underwriters. Thomas H. Lee Partners led a buyout of Refco last August. www.refco.com

Reddy Ice Holdings Inc., Holdings Inc., a Dallas-based manufacturer and distributor of packaged ice, has set its proposed IPO terms to 10.2 million common shares being offered at between $16 and $18 per share. It plans to trade on the NYSE under ticker symbol FRZ. Since August 2003, Reddy Ice has been controlled by Trimaran Capital Partners and Bear Stearns Merchant Banking. www.reddyice.com

PE-Backed M&A

Videsh Sanchar Nigam Ltd. (NYSE: VSL) has agreed to acquire Teleglobe International Holdings Inc. (Nasdaq: TLGB), a Bermuda-based provider of wholesale voice, data, IP and mobile signaling devices. The deal is valued at $239 million ? or $4.50 per share — with the main selling party being private equity firm Cerberus Capital Management, which acquired a 66.2% ownership stake via a 2003 financial restructuring. www.teleglobe.com

ASIP Inc. of Somerset, N.J. and T-Networks Inc. of Allentown, Pa. have agreed to merge into a single optical components company named Apogee Photonics Inc. The combined venture also has received $9.7 million in venture capital funding from existing ASIP backers Atlas Venture, BlueRun Ventures, Finaventures, Intel Capital (also a T-Networks backer) and Redpoint Ventures, plus from T-Networks shareholder TL Ventures. Other existing T-Networks investors Greylock, Sequoia Capital and U.S. Venture Partners did not participate on the new deal and will not hold board seats with Apogee, but will remain shareholders. www.asipinc.com www.t-networks.com

Human Resources

James Coady and Paul Murphy have been promoted from principal to partner with Sentinel Capital Partners, a New York?based private equity firm focused on smaller middle-market companies. www.sentinelpartners.com

MONDAY, JULY 24

Greetings from San Francisco, where tomorrow I?ll be providing a keynote address at the PwC Private Equity CFO Summit. Unfortunately I took a redeye last night, so no column this morning (exhaustion takes precedence). All apologies. Be back at full verbosity tomorrow with Q2 venture capital disbursement numbers and analysis?

Top Three

 

Maytag Corp. (NYSE: MYG) has received a sweetened buyout offer from Whirlpool Corp. (NYSE: WHR). The rival appliance maker has upped its $17 per share bid to $18 per share, and Maytag issued a statement saying that it now plans to provide information to Whirlpool. Maytag currently has a pending $14 per share agreement with Ripplewood Holdings. Last week, a possible buying consortium of Bain Capital, Blackstone Group and Haier America Trading dropped out of the process. www.maytag.com

Pinnacle Systems Inc. (Nasdaq: PCLE), a Mountain View, Calif.?based provider of digital video solutions, has rejected a $200 million cash buyout offer from Vector Capital and Tennenbaum Capital. Pinnacle instead plans to continue pursuing a pending merger with Avid Technology Inc. (Nasdaq: AVID). www.pinnaclesys.com

SurgRx Inc., a Palo Alto, Calif.-based medical device company focused on surgical hemostasis, has raised $21 million in Series E funding. New Enterprise Associates led the deal, and was joined by Trellis Health Ventures and return backers Alta Partners, Prospect Venture Partners and California Technology Ventures. www.surgrx.com

VC Deals

HealthMedia Inc., an Ann Arbor, Mich.?based provider of health behavior change programs, has raised $2 million in a new VC funding round co-led by Arboretum Ventures and return backer Chrysalis Ventures. www.healthmedia.com

Omni Explorer Technologies Inc., a Palo Alto, Calif.-based Internet search company, has raised $5 million in first-round funding ($4.8m in equity) from firms like Clearstone Venture Partners and Leapfrog Ventures, according to a regulatory filing. www.omni-explorer.com

RiverOne Inc., an Irvine, Calif.-based provider of supply chain software and services for the electronics industry, has raised $6 million in third-round funding co-led by return backers Rustic Canyon Ventures and Baker Capital. www.riverone.com

Buyout Deals

 

Trimaran Capital Partners and Kier Group have completed their financial recapitalization of New York-based retailer Fortunoff. No financial terms were disclosed for the deal, which allows the Fortunoff and Mayrock families to continue their active operating roles in the company. www.fortunoff.com

Ford Motor Co. is receiving buyout interest in its Hertz Corp. unit. The news was first reported by The New York Post, with today?s Wall Street Journal saying that one group includes Carlyle Group, Clayton Dubilier & Rice and Merrill Lynch Global Private Equity, while another includes Texas Pacific Group, Thomas H. Lee Partners and Bain Capital. The Blackstone Group also is reported to be looking at the deal, which could generate more than $6 billion. www.hertz.com

Kirtland Capital Partners has acquired Rugby Manufacturing Co. from Hanover Partners and Tuckerman Capital for an undisclosed amount. Rugby Manufacturing is a Rugby, N.D.?based maker of medium-duty truck bodies and related equipment, and was advised by Goldsmith Agio Helms on the deal. In related news, Kirtland also has acquired truck body manufacturer Ox Bodies Inc., and will combine the two companies. www.kirtlandcapital.com www.rugbymfg.com

The Riverside Co. is sponsoring a management buyout of promotional product company Adventures in Advertising Inc. from UK-based 4Imprint Group PLC. No financial terms were disclosed, except that the deal is part of Riverside?s new micro company inv*stment strategy, focused on companies with under $3 million in EBITDA. www.advinadv.com

JLL Partners has acquired a majority position in a Bryn Mawr, Pa.?based specialty finance company J.G. Wentworth from company founders, according to The Deal. No financial terms were disclosed for the deal, which included leverage from Deutsche Bank. www.jgwentworth.com

Legal & General Ventures has acquired Verna Group, a UK-based provider of pulp and infection control products to UK hospitals, for approximately Gbp60 million. www.legalandgeneralventures.com

PE-Backed IPOs

K&F Industries Holdings Inc., a New York-based maker of aircraft wheels, brakes, brake control systems and flexible bladder fuel tanks, has set its proposed IPO terms to 18 million common shares being offered at between $16 and $18 per share. It plans to trade on the NYSE under ticker symbol KFI, with Goldman Sachs and Lehman Brothers serving as lead underwriters. Aurora Capital is K&F?s controlling shareholder, with other shareholders including GE Pension Trust and CalPERS.

A4S Technologies Inc., a Kalispell, Mont.-based developer of technology for use by the U.S. Air Force, priced 1.2 million units at $6 per unit, for an IPO take of approximately $7.2 million. The company will trade on the Nasdaq SmallCap under ticker symbol SWATU, with underwriters including Newbridge Securities Corp., Bathgate Capital Partners and Joseph Gunnar & Co. Shareholders include Livingston Capital and Cambridge Holdings. www.shiftwatch.com

PE-Backed M&A

United Parcel Service (NYSE: UPS) has agreed to acquire UK-based parcel carrier Lynx Express Ltd. for $96.5 million in cash. The deal is expected to close before year-end. Bridgepoint Capital is the selling party, having sponsored a Gbp34.3 million management buyout of Lynx in 1997. www.ups.com www.lynx-express.com

PepsiCo Inc. told French regulators that it is not planning to buy publicly-traded yogurt maker Groupe Danone, which counts Eurazeo as a minority shareholder. www.pepsi.com

Firm & Fund News

Wellington Partners of Munich has closed its Wellington Partners III Technology Fund at its max cap of 150 million euros. European Inv*stment Fund served as cornerstone inv*stor, and was joined by other limited partners like Access Capital, AGF Private Equity, AlpInvest, CDC, Global Vision ? MPC, Messerschmitt Stiftung, National Innovation Fund of Kazakhstan, Swiss Re, VCM, VenCap, von Braun & Schreiber, Westfälische Provinzial and Württembergische Versicherungen. This will be Wellington?s first fund featuring Eric Archambeau as a general partner. He joined the firm earlier this year from Benchmark Capital Europe, and previously worked with Atlas Venture. www.wellington-partners.com

Electra Partners, a London-based buyout firm, has closed its second fund with 1.25 billion euros. www.electraeurope.com

FRIDAY, JULY 22

Friday Feedback

The sun is shining, Manny saved Schilling and I?ve got to find some time to work on next Tuesday?s keynote address in San Francisco. In other words, it?s time for some Friday Feedback.

First up are some emails about the China-based securities scam that involves the identity theft of U.S. buyout and venture capital firms like The Carlyle Group and Battery Ventures. Jason writes: ?That faux-Battery site is absolutely shameless. I love the fact that they used a picture of the Renaissance Center in Detroit in the ?About Battery? section.? Susanna gets more serious: ?Was that Chinese Battery site a joke? I was outraged and humiliated at the same time since I am Chinese myself. I have always had a career interest to do business in China, but these kinds of articles make me think twice. Not that we don?t have any scoundrels in our own country, but that was blatantly scandalous? I hope www.usa-big.com goes down in flames.?

A bunch of you wrote in to ask what Battery and Carlyle are doing about the con, and what you should do if you discover something similar. Without getting too specific, I can say that both private and public investigators (both in the U.S. and in Europe) are looking into the matter, with possible violations ranging from securities and wire fraud to copyright and trademark infringement. I also spoke with John Stark, who runs Internet enforcement for the SEC. He declined to comment on ongoing investigations ? or even to confirm the existence of an investigation ? but urged any firm whose site has been mimicked to contact him via phone, or via email at enforcement@sec.gov. Also, I?ll have a much more in-depth article on this situation (including specific details on where some of the con-artists are operating) in Monday?s print edition of PE Week.

Lots of you also wrote in about Wednesday?s column on Martin Tobias, Seattle Biodiesel and the general topic of alternative energy. Michael writes: ?Coming from Europe, I take delight that the U.S. is finally catching on to the biodiesel idea? Although I do subscribe to the model of locally delivering energy — thus being able to use more of the primary energy being produced — I am not sure that it is the best approach for a refinery (no matter the oil base). I could imagine that your transportation cost is higher when trucking soybeans across the Rockies than when you would just truck the diesel across, mind the eco-balance. So unless Tobias has some other way of doing something good with the leftover soybean mash — or unless he could grow so much locally that the eco-balance would work out — Iowa I am skeptic with respect to profitability. So I would long-term expect these refineries rather go up in the agriculture heartland than in the more acreage-expensive coasts.?

Indeed, it seems that we have a bunch of skeptics out there, including half a dozen folks who chided me for not at least mentioning a new study suggesting that the actual production of biodiesel and ethanol uses more fossil fuels that its application saves. The study can be found at http://petroleum.berkeley.edu/papers/Biofuels/NRRethanol.2005.pdf, and Tobias? response to a Seattle Times article on the study can be found here. A quick Google search can also lead you to much more debate, and VC Rob Day provides some insights on his blog.

Finally, a goodly amount of feedback on the Charity Auction, including: ?What is the status of the Charity Auction.? Seems such things take a bit longer to plan than anticipated, but I?m still working on it. We?ve got some VC firms, LPs, law firms, PR folks, etc. who are willing to put up some of their time (deal pitches, fund pitches, consulting, etc.), plus a bunch of other interesting stuff. Please keep your suggestions flowing (i.e. email me) as I hammer out the final details.

And remember, if you want to submit feedback ? or, even better, a news or gossip tip ? without me knowing who you are, just use the handy Top Secret button on the right-hand side (scroll down a bit). I?ll be on the West Coast next week, but your Wire will continue to be published at the same time? Enjoy the weekend.

Top Three

Kohlberg Kravis Roberts & Co., Bain Capital and Vornado Realty Trust have completed their $6.6 billion buyout of Toys ?R? Us Inc., including the Toys ?R? Us and Babys ?R? Us businesses. Each buyer has an equal stake in the company, which will no longer be publicly traded. www.toysrus.com

ADC (Nasdaq: ADCT) has agreed to acquire Fiber Optic Network Solutions Corp., a Marlborough, Mass.-based maker of passive optical components and fiber optic cable packaging, distribution and connectivity solutions. The deal is valued at $172 million in cash, and is expected to close during the next 30 to 90 days. FONS has raised around $42.5 million over two rounds of VC funding, including a $27.5 million Series B infusion in 2001 at a post-money valuation of approximately $185 million. Shareholders include Morgenthaler Ventures, Intel Capital and Oak Inv*stment Partners. www.adc.com www.fons.com

Oaktree Capital Partners is looking to raise up to $1.25 billion for its second mezzanine fund, according to a regulatory filing. www.oaktreecapital.com

VC Deals

HelloSoft, a San Jose, Calif.-based provider of signal processing technology and software-defined radio solutions, has raised $16 million in Series B funding. TD Capital Ventures led the deal, and was joined by Mitsui & Co. Venture Partners, Entrepia Ventures and return backers Venrock Associates, Sofinnova Ventures and Jump Startup. www.hellosoft.com

GraniteEdge Networks Inc., a Bellevue, Wash.-based provider of network security intelligence solutions, has raised $5 million in Series A funding. Outlook Ventures led the deal, and was joined by existing shareholder OVP Venture Partners. www.graniteedge.net

Business Signatures Corp., a Redwood City, Calif.-based provider of Web analytics focused on e-tail customer intent, has raised a total of $12 million in VC funding from firms like Walden International and TPG Ventures, according to SiliconBeat.com. www.businesssignatures.com

Buyout Deals

SunGard Data Systems Inc.(NYSE: SDS) said that shareholders will vote on its $36 per share billion buyout agreement next Thursday, and that, if approved, the deal will close in August. The total transaction is valued at $11.3 billion, and includes Silver Lake Partners, Bain Capital, The Blackstone Group, Goldman Sachs Capital Partners, Kohlberg Kravis Roberts & Co., Providence Equity Partners and Texas Pacific Group. www.sungard.com

The Carlyle Group has agreed to acquire Plano, Texas-based long-term acute care provider LifeCare Holdings Inc. from majority shareholder GTCR Golder-Rauner. No financial terms were disclosed, although The Deal pegs the transaction price at around $555 million. The deal is expected to close next month, at which point W. Earl Reed, founder of The Allegro Group and longtime healthcare executive, will be installed as LifeCare?s new CEO. www.carlyle.com www.lifecare-hospitals.com

Fox Paine & Co. reportedly will sell its majority stake in Belgian auto parts maker VCST Industrial Products NV. No pricing terms are being disclosed for the sale, which is being arranged by Citigroup. Fox Paine bought VCST last September. www.vcst.be

Platinum Equity has acquired American Racing Equipment Inc., a Rancho Dominguez, Calif.?based maker of automotive wheels for aftermarket customers, from a subsidiary of Falconbridge Ltd. (NYSE: FAL). No financial terms were disclosed. www.platinumequity.com www.americanracing.com

CVC Capital Partners, Permira and PAI Partners have agreed to team up as equal partners to acquire Spanish clothing retailer Cortefiel SA for 1.44 billion euros. CVC originally had made an individual takeover bid, but soon a rival bid from Permira and PAI.

PE-Backed IPOs

Maidenform Brands Inc., a Bayonne, N.J.-based intimate apparel maker, priced nearly 12.8 million common shares at $17 per share, for an IPO take of approximately $217.43 million. It originally had filed to price 10 million shares at between $14 and $16 per share, but raised the total share volume earlier this week. It will trade on the NYSE under ticker symbol MFB, and USB Inv*stment Bank and Credit Suisse First Boston served as lead underwriters. Ares Management held a pre-IPO majority position in Maidenform, due to a May 2004 buyout from Oaktree Capital Management, which maintained a minority position. AIG also was listed as a minority shareholder www.maidenform.com

James River Group Inc., a Chapel Hill, N.C.-based insurance holding company, has set its proposed IPO terms to over 4.44 million common shares being offered at between $16 and $18 per share. The company plans to trade on the Nasdaq under ticker symbol JRVR, with Keefe, Bruyette & Woods serving as lead underwriter. Trident Capital holds a 28.9% pre-IPO ownership position. www.jamesriverins.com

Hittite Microwave Corp., a Chelmsford, Mass.-based maker of integrated circuits, modules and subsystems for RF, microwave or millimeter-wave applications, priced 4.5 million common shares at $17 per share (above $14-$16 range), for an IPO take of approximately $76.5 million. It will trade on the Nasdaq under ticker symbol HITT, while Lehman Brothers served as lead underwriter. Hittite raised a $15 million Series A funding round in 2000 led by Summit Partners, at a post-money valuation of approximately $148 million. www.hittite.com

Consolidated Communications Illinois Holdings Inc., a Mattoon, Ill.-based rural local exchange carrier in Illinois and Texas, priced 15.67 million common shares at $13 per share (below its $14-$16 range), for an IPO take of approximately $203.71 million. It will trade on the NYSE under ticker symbol CNSL, while Credit Suisse First Boston and Citigroup served as lead underwriters. The company was owned, in equal parts, by Central Illinois Telephone, Providence Equity Partners and Spectrum Equity Investors. www.consolidated.com

Firm & Fund News

Madrona Venture Group has held a first close on approximately $71 million for its third fund. The Seattle-based firm is marketing the vehicle with a cover price of $150 million, but is hoping to secure at least $200 million with a 20% carried interest structure.

Human Resources

Joel Strauch has joined Updata Capital as a vice president in the firm?s Reston, Va. Office. He previously served as a senior vice president with Katalyst. www.updata.com

Malcolm Goepfert has left the School Emploees? Retirement System of Ohio, where he oversaw the system?s real estate and private equity portfolios. He now serves as a portfolio and inv*stment manager for the W.K. Kellogg Foundation. www.wkkf.org

THURSDAY, JULY 21

Just Linking Around

Print deadlines beckon, so I?ll let other folks do my Wire work:

*** A few things up for general consumption at the Venture Capital Journal site, including: Why Angels and Founders Can?t Get Along and Howard Anderson Defends his Farewell to VC. Also a preview of the July cover story on Pop VC (paid subscribers can access the entire article, plus the rest of the issue).

*** Buyouts Magazine has a piece on PE Pros Chipping Away at the Old Boys Club, plus some info on the Vestar Capital Partners fund-raising effort and 5 Questions with Josh Lerner of Harvard Biz School.

*** Jeff Bussgang of IDG Ventures Boston blogs on the internal torment of VC-backed founders

*** Bill Burnham of Celsius Capital does some math on News Corp.?s acquisition of VC-backed Intermix Media (which operates MySpace.com).

Top Three

Alloy Ventures of Palo Alto, Calif. has closed its fifth fund with approximately $330 million, according to a regulatory filing. www.alloyventures.com

Business Objects SA (Nasdaq: BOBJ) has agreed to acquire SRC Software, a Portland, Ore.-based vendor of financial planning and performance management software. The all-cash deal is valued at approximately $100 million, and is expected to close later this quarter. SRC is majority-owned by San Francisco-based Vista Equity Partners. www.businessobjects.com www.srcsoftware.com

 

Baidu.com Inc., a Beijing, China-based Chinese language Internet search engine provider, has set its proposed IPO terms to 3.7 million American depository shares at between $19 and $21 per ADS. It plans to trade on the Nasdaq under ticker symbol BIDU, with Goldman Sachs (Asia) and CSFB serving as lead underwriters. Significant shareholders include Draper Fisher Jurvetson (28.1% pre-IPO stake), Integrity Partners (11%), Peninsula Capital (10.1%) and IDG Technology Ventures (4.9%) and Google Inc. (2.6%). www.baidu.com

VC Deals

Farecast Inc. (f.k.a. Hamlet Inc.), a Seattle-based developer of data mining technologies to improve the online travel experience, has raised $7 million in Series B funding. Greylock led the deal, and was joined by return backers Madrona Venture Group and WRF Capital. www.farecast.com

APT Pharmaceuticals Inc., a Tuscan, Ariz.-based drug company focused on developing corticosteroid-alternative therapies, has raised $6 million in Series A funding. Charter Life Sciences led the deal, and was joined by existing shareholder Research Corporation Technologies.

Aceva Technologies Inc., a San Mateo, Calif.-based provider of enterprise applications for revenue and receivables management, has raised around $5.28 million in Series D funding, according to a regulatory filing. Sequoia Capital was joined on the deal by return backers Clearstone Venture Partners and Accel Partners. www.aceva.com

Fresco Microchip, a Toronto-based developer of silicon tuner and demodulator products for television and consumer electronics applications, has secured US$14.7 million in Series A funding co-led by Celtic House Venture Partners and Ventures West. The deal is split into three tranches, with the initial tranche already called down. www.frescomicrochip.com

SeeWhy Software, a UK-based provider of operational business intelligence software, has raised Gbp2 million in Series B funding. LogiSpring led the deal, and was joined by return backers Pentech Ventures and Delta Partners. www.seewhy.com

RedSky Technologies Inc., a Chicago-based provider of E-911 software solutions to enterprise and government customers, has raised an undisclosed amount of first-round funding from CID Equity Partners and Dunrath Capital. www.redskytech.com

VIOlight Inc., an Elmsford, N.Y.?based maker of an ultraviolet bulb-based product to sanitize toothbrushes, has raised an undisclosed amount of private equity funding from JH Partners of San Francisco. www.violight.com

Echovox SA, a Switzerland-based provider of mobile content delivery and monetization solutions, has raised $5 million in venture funding from Newbury Ventures. www.echovox.com

Buyout Deals

 

Odyssey Inv*stment Partners has closed its acquisition of Norcross Safety Products LLC, an Oak Brook, Ill.?based provider of branded products in the personal protection equipment industry. www.nspusa.com

PE-Backed IPOs

Genco Shipping & Trading Ltd., a New York-based dry-bulk carrier, has reduced its proposed IPO terms. It originally planned to sell 11.5 million common shares at between $24 and $27 per share, but now plans to offer 11.3 million common shares at between $22 and $23 per share. set its proposed IPO terms to 11.5 million common shares to be offered at between $24 and $27 per share. Jefferies & Co. and Morgan Stanley are serving as lead underwriters, while Oaktree Capital Management serves as the company’s controlling shareholder, via an entity called Fleet Acquisition Co.

Maidenform Brands Inc., a Bayonne, N.J.-based intimate apparel maker, has increased the number of common shares being offered in its proposed IPO from 10 million to around 12.79 million. It still plans to price the shares at between $14 and $16, with USB Inv*stment Bank and Credit Suisse First Boston serving as lead underwriters. Ares Management holds a majority position in Maidenform, due to a May 2004 buyout from Oaktree Capital Management, which still maintains a minority position. AIG also is listed as a minority shareholder www.maidenform.com

Adams Respiratory Therapeutics Inc., a Chester, N.J.-based drug company focused on respiratory diseases, priced 7.95 million common shares at $17 per share, for a total IPO take of approximately $135.15 million. It originally planned to only price 7.08 million shares at between $14 and $16 per share. Morgan Stanley and Merrill Lynch served as lead underwriters. Adams Respiratory has raised over $30 million in total venture capital funding, with significant shareholders including Equity Group Inv*stors, Perseus-Soros, Tullis-Dickerson & Co., Merrill Lynch Ventures, Talon Equity Partners and Marquette Venture Partners. www.adamslaboratories.com

Coley Pharmaceutical Group Inc., a Wellesley, Mass.-based drug company, has set its proposed IPO terms to 6 million common shares being offered at between $14 and $16 per share. The company plans to trade on the Nasdaq under ticker symbol COLY, with Merrill Lynch and JPMorgan serving as lead underwriters. The company has raised around $138 million in VC funding from shareholders like Thomas, McNerney & Partners, Techno Venture Management, Venrock Associates, Global Life Science Ventures and AlpInv*st. www.coleypharma.com

Heartland Payment Systems Inc., a Princeton, N.J.-based, has set its proposed IPO terms to $6.75 million shares being offered at between $14 and $16 per share. It plans to trade on the NYSE under ticker symbol HPY, with Citigroup serving as lead underwriter. Greenhill Capital Partners and LLR Equity Partners are listed as significant shareholders. www.heartlandpaymentsystems.com

Oxonica PLC, a UK-based nanotech company, raised Gbp7.1 million via an IPO on the LSE?s junior AIM market. VC backers include Foresight Venture Partners, BASF Venture Capital, NGEN Partners, Northern Venture Managers, Quester Capital Management and The Generics Group. www.oxonica.com

PE-Backed M&A

Essar Group of India reportedly has agreed to acquire BPL Mobile Communications Ltd. for approximately $1 billion, including $434 million in assumed debt. It then will merge the company with a company it co-owns with Hong Kong-based Whampoa Ltd. Sellers of BPL include Actis Capital and AIG Global Inv*stment Group. Essar late last year had bought a 9.9% stake in BPL Mobile from France Telecom. www.bplmobile.com www.essar.com

Microsoft Corp. (Nasdaq: MSFT) has agreed to acquire FrontBridge Technologies Inc., a Marina del Rey, Calif.?based provider of managed services that address corporate email, security, compliance and availability requirements. No financial terms were disclosed. FrontBridge has raised over $27 million in VC funding since its 1998 inception, from firms like BA Venture Partners, Focus Ventures, Sierra Ventures and Kummell Inv*stments. www.microsoft.com www.frontbridge.com

Ahlsell AB, a Sweden-based wholesale plumbing and heating parts maker controlled by Nordic Capital, has agreed to buy the Norwegian electrical wholesale operations of Nexans for an undisclosed amount. www.ahlsell.se

Firm & Fund News

KRG Capital Partners, a Denver-based buyout firm, has closed its oversubscribed third fund with $715 million in limited partner commitments. Probitas Partners served as placement agent for the fund-raising, which began in December 2004. www.krgcapital.com

Pouschine Cook Capital Management, a New York-based private equity firm focused on non-control deals for lower middle-market companies, has closed its second fund with $175 million in capital commitments. www.pouschinecook.com

Darby Overseas Inv*stments reportedly plans to increase its private equity activity in Brazil by more than two-thirds next year, and will inv*st at least a total of $300 million over the next two years. www.darbyoverseas.com

Human Resources

Karen Bechtel has joined The Carlyle Group as a managing director and co-head of the firm?s global healthcare team, effective in August. She has spent the past 28 years with Morgan Stanley. www.carlyle.com

Roy Ziegler has joined Partech International as a venture partner focused on the healthcare market. He most recently served as an executive vice president with First Consulting Group, which he joined in 1993. www.partechvc.com

WEDNESDAY, JULY 20

The Education of Martin Tobias

There are lots of reasons why I like my job, including the flexibility, people and multi-million dollar salary (in order of veracity). The best part, however, is a regular opportunity to completely immerse myself in the innovative minutia of emerging technologies that I previously was completely ignorant of. Sure, I forget most everything a week or two later (think most college courses), but the joy of learning trumps such petty problems.

Why mention this today? Because I spent some time on the phone yesterday with Martin Tobias, a venture partner with Ignition Partners who yesterday revealed that he has become chairman and CEO of an alternative energy company called Seattle Biodiesel. Before continuing, it is important to make two corrections to yesterday?s blurb on Seattle Biodiesel: (1) Tobias was originally hired as a venture partner at Ignition, and will remain one; (2) All of Seattle Biodiesel?s $2 million Series A round came from individuals, not from institutions. Moving on?

Tobias has absolutely no background in alternative energy, let alone biodiesel. He is a onetime consultant who moved on to Microsoft before making a bigger mark as founder and CEO of Loudeye Technologies. He joined Ignition in 2002, at which point he began making deals in the software/IT space. Understandable career path. Last year, however, Tobias ? a typical Seattle-ite in terms of environmental conservation — began looking for some decent energy-software companies, but didn?t find anything of interest. He then looked into ethanol, before concluding that the market was simply too mature for an early-stage play. Finally, he came upon biodiesel, which can most simply be described as vegetable oil-based fuel (interesting note: first diesel engine ran on peanut oil).

Biodiesel has all of the obvious environmental benefits like cleaner exhaust (apparently smells like a cross of French fries and popcorn) and lack of combustion, plus could certainly reduce U.S. dependence on foreign energy sources. Cost per gallon is comparable to petroleum (depending on the day and retailer), and the two can be mixed in the same tank without trouble.

What most biodiesel companies don?t have, according to Tobias, however, is a good business model. He says that the typical biodiesel company in the U.S. follows a European trend of centralized production, whereby you refine the fuel near the crops (like Iowa), and then ship it across the country (like Seattle). Seattle Biodiesel, on the other hand, features a refinery in Seattle and then sells its product locally (or at least has for the past two months). It still gets most of its soybeans from Iowa, but is negotiating with local farmers to increase their canola and/or mustard seed crops. This is a distributed model, and Seattle Biodiesel hopes to export it throughout the country (first satellite is expected to be launched in around six months, at which point the company will probably look for $12 million to $15 million in institutional VC/project finance funding).

Again, all of this is now being run by Tobias (with the help of existing company founders/management), who is basically a novice. What he has, however, is an obvious fascination with the space and an eagerness to learn. Just take a look at his Deep Green Crystals blog to see how far his attention has drifted from software to fuel.

Normally I?m a cynic who would say something like: ?Take a board seat or become an advisor, but don?t become CEO of a company whose business you don?t yet fully understand.? But I?ll play optimist this time, because of Tobias? obvious passion for what he?s doing. If successful, Tobias could ultimately become the modern version of John D. Rockefeller (ok, maybe a bit hyperbolic). At worst, he?ll become someone who took a risk, failed and learned a lot in the process.

Top Three

 

Maytag Corp. (NYSE: MYG) has one less prospective buyer, as the consortium that includes Bain Capital, Blackstone Group and Chinese appliance company Haier America Trading has dropped out of the process. The group was reported to be considering a $16 per share offer. The only formal bid on the table right now is a $14 per share offer from Ripplewood Holdings, although rival Whirlpool Corp. (NYSE: WHR) has approached Maytag about a $17 per share offer. www.maytag.com

 

Accel Partners has closed its second European venture capital fund ? named Accel London II ? with $450 million in limited partner commitments, according to a regulatory filing. The news comes one day after Accel announced that it had partnered with IDG to begin fund-raising for a $250 million-targeted VC fund that would focus on China. www.accel.com

 

Photoways Inc., a France-based operator of an online digital photo lab, has raised 24 million euros in Series A funding from Highland Capital Partners and Index Ventures. www.photoways.com

VC Deals

Westec InterActive, an Irvine, Calif.-based provider of video monitoring services for businesses, has received $17.5 million in venture capital funding from Clarity Partners. In addition, Westec CEO Gerald Vento inv*sted $2.5 million. www.westecnow.com

Engage Corp., a San Francisco?based online relationship community, has raised an undisclosed amount of first-round VC funding from The Founders Fund and Revolution Ventures. www.engage.com

Solicore Inc., a Lakeland, Fla.-based provider of lithium polymer batteries for the smart card, RFID and medical device markets, has raised $12.7 million in the first tranche of its Series C funding round. The company plans to close on an additional $2.3 million within the next 25 days, at which point it will have raised around $40 million in total VC funding since its 2001 inception. Rho Ventures led the latest infusion, and was joined by return backers Draper Fisher Jurvetson, Braemar Energy Ventures, Firelake Capital, OPG Ventures, Air Products & Chemical and several unnamed individuals. www.solicore.com

JasperSoft Corp., a San Francisco-based provider of commercial open-source reporting solutions, has raised $8 million in Series C funding at a post-money valuation of approximately $23.2 million. Partech International led the deal, and was joined by return backers DCM-Doll Capital Management and Morgenthaler Ventures. www.jaspersoft.com

Buyout Deals

 

Advent International has agreed to sell its majority stake in Moeller Group to Doughty Hanson & Co. for 1.1 billion euros (including pension liabilities and financial debt). The deal?s equity tranche is 192 million euros, and also includes a debt facility of around 650 million euros underwritten by Mizohu and Morgan Stanley. Moeller Group is a Germany-based supplier of low-voltage electrical distribution and automation components.

Arcapita has acquired the majority equity interest in Falcon Gas Storage Company Inc., a Houston, Texas-based natural gas storage company. The deal is valued at approximately 4100 million, with current Falcon management remaining in place and retaining and equity position. www.arcapita.com www.falcongasstorage.com

KRG Capital Partners has sold portfolio company HMS Healthcare Inc., a preferred provider organization (PPO) to Aetna (NYSE: AET) for $390 million. HMS was formed by KRG a little over a year ago, and serves 1.6 million people throughout Michigan, Colorado, Ohio, Kentucky, Wisconsin and parts of Indiana. www.krgcapital.com www.aetna.com

Urban Radio Communications LLC, a Mobile, Ala.-based radio broadcasting company, has received $17 million in combined equity and mezzanine debt financing from The Goldman Sachs Urban Inv*stment Group and 21^st Century Group. The capital will be used to acquire selected radio broadcasting stations and to finance capital expenditures and general working capital needs. www.gs.com/uig

3i Group has put London-based environmental consultancy Environmental Resources Management PLC on the block for approximately $500 million, according to The Times of London. Interested bidders reportedly include Bridgepoint, ABN Amro, Cinven and Exponent Private Equity. ERM advised the City of London on its successful bid for the 2012 Olympic Games. www.3i.com www.erm.com

PE-Backed IPOs

NxStage Medical Inc., a Lawrence, Mass.-based medical device company focused on renal disease and acute kidney failure, has filed to raise $75 million via an IPO of common stock. It plans to trade on the Nasdaq under ticker symbol NXTM, with Merrill Lynch & Co. serving as lead underwriter. NxStage has raised around $75 million in total VC funding since its 1998 inception, from firms like Sprout Group (36.5% pre-IPO stake), Atlas Venture (17.3%), Lightspeed Venture Partners (5.3%) and Adams Street Partners (5.3%). www.nxstage.com

Caribou Coffee Company Inc., a Brooklyn Center, Minn.-based operator of 322 gourmet coffeehouses, has filed to raise $90 million via an IPO of common stock. It plans to trade on the Nasdaq under ticker symbol CBOU, with Merrill Lynch & Co. and Thomas Weisel Partners serving as lead underwriters. Caribou Coffee is controlled by Arcapita. www.caribou-coffee.com

PRN Corp., a San Francisco-based operator of an in-store television network, has withdrawn its proposed $126.5 million IPO, due to public interest and the protection of inv*stors.? Significant shareholders include the Shamrock Capital Growth Fund, Moore Macro Fund, GE Capital, Allen & Co. and the State of Michigan. www.prn.com

Eschelon Telecom Inc., a Minneapolis-based provider of voice and data services and business telephone systems, has set its proposed IPO terms to around 4.68 million common shares being offered at between $15 and $17 per share. The company hopes to trade on the Nasdaq under ticker symbol ESCH, with Lehman Brothers and Jefferies & Co. serving as lead underwriters. Shareholders include Bain Capital (40.72% pre-IPO position), Wind Point Partners (32.54%) and Stolberg Partners (15.30%). www.eschelon.com

Republic Companies Group Inc., a Wilmington, Del.-based personal and commercial property and casualty insurance provider, has set its proposed IPO terms to 6 million common shares being offered at between $15 and 417 per share. It plans to trade on the Nasdaq under ticker symbol RUTX, with JPMorgan and Banc of America Securities serving as lead underwriters. Shareholders include Greenhill Capital Partners (46.7% pre-IPO stake), Brazos Private Equity (17.5%), Banc of America Capital Inv*stors (8.9%), 21^st Century Group (7.6%), Norwest Equity Partners (5.8%) and Wand Partners. www.republink.com

PE-Backed M&A

Aptuit Inc., a Greenwich, Conn.-based portfolio company of Welsh, Carson, Anderson & Stowe, has agreed to acquire three divisions of Durham, N.C.-based Quintiles Transnational for $125 million. The divisions focus on early-stage drug screening and packaging for drugs and testing supplies. www.aptuit.com www.quintiles.com

XSYS Print Solutions of Germany has agreed to merge with Flint Ink Corp. of Ann Arbor, Mich. No financial terms were disclosed for the deal, which would result in a company with combined 2004 revenue of approximately $2.6 billion. XSYS was formed late last year by CVC Capital Partners, following its acquisition of both BASF Printing Systems and ANI Printing Systems. The combined company will be jointly owned by CVC and management of both companies. www.flintink.com www.xsys-printsolutions.com

Broadcom Corp. (Nasdaq: BRCM) has agreed to acquire Siliquent Technologies Inc., a Mountain View, Calif.?based developer of 10GbE network interface controllers with Ethernet processing technology. The deal is valued at $76 million in cash. Siliquent has raised around $35 million in total VC funding since its 2000 inception, from firms like Greylock, Benchmark Capital, Thomas Weisel Partners and Alta Berkeley Venture Partners. www.broadcom.com www.siliquent.com

IBM has agreed to acquire PureEdge Solutions Inc., a Canadian provider of electronic forms-based business process management software and services. No financial terms were disclosed for the deal, which is expected to close on Friday. PureEdge has raised VC funding from Bank of Montreal, GrowthWorks, RoyNat Capital and Business Development Bank of Canada. www.ibm.com www.pureedge.com

BEA Systems Inc. (Nasdaq: BEAS) has acquired Compoze Software Inc., a Wayne, Pa.-based provider of collaborative software for enterprise portals and enterprise applications.. No financial terms were disclosed. Compoze software has raised a small amount of VC funding from SeaCap Ventures, bHive and Robin Hood Ventures. www.bea.com www.compoze.com

PartMiner Inc., a Melville, N.Y.-based provider of electronic components and information services to the electronics industry, has acquired PartLogic Software, a provider of validation and reporting for obsolescence risk and environmental compliance analysis. No financial terms were disclosed. PartMiner has raised approximately $110 million in VC funding from firms like Seacoast Capital, Cahners Business Information, Boston Ventures, Onex Corp. and Vulcan Capital. www.partminer.com www.partlogic.com

Firm & Fund News

Gerry Robinson, former chairman of Allied Domecq PLC, Granada Group and British Sky Broadcasting Group PLC, reportedly is launching a UK-based corporate turnaround firm called Raphoe Management. Robinson is the firm?s controlling shareholder, although Europa Partners Ltd. also has a sizable position.

Human Resources

Laura Friedrich has been named a partner in the private equity group of law firm Chadbourne & Park LLP. She previously had been a member of Simpson Thacher & Bartlett?s private funds group since 1996. www.chadbourne.com

Tim Haines has agreed to join Abingworth Management as a London-based partner, effective in September. He currently is CEO of Abingworth portfolio company Astex Therapeutics. www.abingworth.com

Robin Dvorak has been named marketing director of Reston, Va.-based Updata Capital and its Updata Partners venture capital affiliate. Dvorak previously served as managing director of programs at Industrial Research Institute, a professional association of senior research and development executives. www.updata.com

Emergence Capital Partners, a San Mateo, Calif.-based VC firm focused on tech-enabled startups, has formed a strategic advisory board that includes: Board chairman John Dillon, former CEO of salesforce.com and current CEO of Navis; Gerry Mooney, IBM’s vice president of global strategy; Peggy Taylor, former COO of PeopleSoft; and Timothy Chou, former president of Oracle On Demand. www.emcap.com

Rich Ford has joined health-care focused merchant bank Galen Capital Group as a senior advisor. Ford is the former president of The Sage Group, a Nashville, Tenn.-based provider of workforce training to Fortune 500 companies. www.galencapitalgroup.com

America?s Growth Capital said that firm co-founder Maria Lewis Kussmaul will now lead its information security and data center I-banking practice, after previously having served as head of capital markets and senior information security and IT infrastructure analyst. In other America?s Growth Capital news, Rudy Minar has joined as a principal focused on the software and digital media infrastructure sectors. He previously was an executive director in the technology I-banking group of CIBC World Markets. www.americasgc.com

_____________________________
Corrections: Solexa Inc. is based in the UK, not in Hayward, Calif. Also, the name of Versatel Telecom International was misspelled.  

TUESDAY, JULY 19

Busiest news day in a long time, with lots of VC, LBO, M&A and market personnel activity. So just a few quick notes and a couple links:

*** In light of Tejas Ventures folding after being unable to secure enough LP commitments for its debut fund, I looked at some data about recent first-time fund-raising activity. Getting the first one done is never easy (most fail), but first-time VCs are faring particularly badly right now when compared to their first-time LBO peers.

According to data from Thomson Venture Economics, the percentage of first-time VC funds getting raised compared to overall VC funds getting raised goes as follows:

• 2000: 34.27%
• 2001: 33%
• 2002: 28.4%
• 2003: 31.3%
• 2004: 26.84%
• 2005: 16.67%

Compare this to first-time LBO funds as a percentage of all LBO funds getting raised:

• 2000: 21.47%
• 2001: 25.3%
• 2002: 36%
• 2003: 28.57%
• 2004: 21.15%
• 2005: 21.05%

So much for all of those emerging VC manager programs from a few years back…

*** I’m not usually one for blind items, but: Can you name the brand-name VC firm that has spent its current fundraising drive in crisis mode? It isn?t just bad returns that have LP noses out of shape, but a decision by the annual budget-based firm to apply the uncalled remainder of an ?up to 2.5%? management fee clause to pay off a clawback. It also had some strange secondary LP sales among the general partnership.

*** Full charity auction info tomorrow, including identities of the charities themselves.

*** SiliconBeat.com has uncovered another VC firm scam. This one affects JVP, and uses phishing instead of a plagiarized website.

*** Paul Kedrosky rightly worries that News Corp.?s acquisition of Intermix Media/MySpace.com is going to have the VC sheep lining up at the social networking trough (even more than they already have).

Top Three

 

Ilypsa Inc., a Santa Clara, Calif.-based polymeric drug company focused on renal and metabolic disorders, has raised $36 million in Series B funding. U.S. Venture Partners, Johnson & Johnson Development Corp. and Delphi Ventures co-led the deal, and were joined by fellow new backers CMEA Ventures and Mediphase Venture Partners. Returning shareholders included Sprout Group and 5AM Ventures. www.illypsa.com

Sandy Weill, chairman of Citigroup, reportedly is teaming up with Saudi Arabia?s Prince Alwaleed bin Talal (a top Citigroup shareholder) to launch a $5 billion private equity fund. The only sticking point right now is if Weill can negotiate himself out of his Citigroup deal, which has him staying no board until next April.

News Corp. (NYSE: NWS) has agreed to acquire Intermix Media Inc., a Los Angeles-based operator of entertainment and lifestyle websites, for $580 million in cash, or $12 per share. As part of the deal, Intermix will purchase the 47% of MuSpace.com that it doesn?t already own. VantagePoint Venture Partners is the largest Intermix shareholder with a 22.4% stake, while Redpoint Ventures holds a position in MySpace.com.

VC Deals

TherOx Inc., an Irvine, Calif.-based medical device company focused on restoring oxygen to oxygen-deprived tissue, has raised $30 million in new venture capital financing. New Science Ventures led the deal, and was joined by Aperture Venture Partners and Wasatch Advisors, plus return backers Kleiner Perkins Caufield & Byers and Integral Capital Partners. TherOx has raised approximately $82 million in total VC funding since its 1994 inception, including a $30 million infusion in 2001 at a post-money valuation of approximately $68 million. www.therox.com

Rearden Commerce Inc. (f.k.a. Talaris Corp.), a San Mateo, Calif.-based provider of e-commerce solutions, has raised $18.5 million in Series B-1 funding, according to a regulatory filing. Participants included Foundation Capital, Charter Ventures and Empire Ventures. The company has raised over $40 million in total VC funding since its 1999 inception. www.reardencommerce.com

ActiveGrid Inc., a San Francisco-based commercial open-source company, has raised $10 million in Series B funding. Worldview Technology Partners led the deal, and was joined by return backers Hummer Winblad Venture Partners and Allegis Capital. www.activegrid.com

Seattle Biodiesel, a Seattle-based bio-energy startup, has raised $2 million in seed funding from Ignition Venture Partners and new chairman and CEO Martin Tobias. Tobias was a general partner with Ignition, but now will shift to a venture partner role. www.seattlebiodiesel.com

MetroBridge Networks Corp., a Vancouver-based broadband wireless provider, has raised an undisclosed amount of second-round funding led by BC Advantage Funds. The company plans to raise a third round of funding next summer. www.metrobridge.com

Protalix Biotherapeutics Ltd., an Israel-based drug company focused on candidates expressed via plant cell culture and bioreactor systems, has raised $5.3 million in Series C funding. New backers included Tamares Capital, Docor International BV (subsidiary of Van Leer Group Foundation) and Atara Technology Ventures (VC arm of Phoenix Assurance), while returning shareholders included Biocell Ltd., Marathon Inv*stments Ltd. and several unnamed individuals. www.protalix.com

Home Décor Products Inc., an Edison, N.J.-based online retailer of home improvement products, has raised $7.1 million in Series B funding led by Kinderhook Partners. Nine individuals also participated. www.homeclick.com

Montgomery & Co., a Santa Monica, Calif.-based boutique I-bank, has received $7.5 million in private equity funding from Tudor Ventures. www.monty.com

Lucy Activewear Inc., a Portland, Ore.-based active-wear retailer, has raised $20.3 million in Series G funding. Chico?s FAS Inc. (NYSE: CHS) participated on the deal with a $10 million commitment, and was joined by return backers Lone Pine Capital, Maveron, Oak Inv*stment Partners and Sutter Hill Ventures. www.lucy.com

ICentera Inc., a Burnsville, Minn.-based provider of on-demand business communications portals, has raised $1.5 million in Series A funding from PrairieGold Venture Partners and Cargill Ventures. www.icentera.com

Mtivity Ltd., a UK-based provider of marketing management software, has raised Gbp1.5 million in venture capital funding from Albany Ventures and The Capital Fund. In other company news, Mtivity has named non-executive chairman Patrick Kremer as its new CEO. www.mtivity.com

Perfect Market Technologies Inc., a Pasadena, Calif.-based operator of the Snap.com search engine, has raised $10 million in new VC funding. Mayfield led the round, and was joined by return backer Idealab. www.snap.com

Zoom Systems, a San Francisco-based provider of automated retail stores, has raised $12 million in Series B funding. NeoCarta Ventures led the deal, and was joined by return backer Sierra Ventures (largest single commitment to the round), Phil Schlein of U.S. Venture Partners and Bruce Quinnell, Zoom Systems chairman and former president and COO of Borders Group. www.zoomsystems.com

Artifact Network Inc., a Baltimore?based provider of on-demand software for managing global application development, has raised $5 million in Series A funding. Intersouth Partners and the New Markets Growth Fund co-led the deal, and were joined by Draper Atlantic. www.artifactnetwork.com

Buyout Deals

 

Berkshire Partners has completed the sale of its 74% stake in The Holmes Group Inc. to Jarden Corp. (NYSE: JAH) for approximately $625 million. The deal is structured with $420 million in cash, and 6.2 million of Jarden common stock. Holmes Group is a Milford, Mass.?based maker and distributor of home environment and small kitchen electric products under brand names like Bionaire, Crock-Pot and White Mountain. Company founder and CEO Jerry Kahn also sold his position. www.theholmesgroup.com

MidOcean Partners has acquired LA Fitness PLC, a UK-based health club chain operator. No pricing terms were disclosed. Senior note financing was provided by RBS, Calyon and Lloyds TBS, while Cerberus provided mezzanine financing. www.lafitness.co.uk

The Home Depot Inc. (NYSE: HD) has agreed to buy National Waterworks Holdings Inc. from JPMorgan Partners and Thomas H. Lee Partners for an undisclosed amount. National Waterworks is a Waco, Texas?based distributor of water and wastewater transmission products in the U.S., and had 2004 net sales of $1.5 billion. It currently is in registration for a $400 million IPO, although it is now expected to pull the offering. www.nationalwaterworks.com

Spirit Airlines, a Ft. Lauderdale commercial airline operator, has received $100 million in new private funding. Return backers Oaktree Capital Management and company management provided $70 million, while the remaining $30 million came from Goldman Sachs Credit Partners. No equity-to-debt breakdown was disclosed. www.spiritair.com

Choice Cable TV (f.k.a. Centennial Puerto Rico Cable TV), a portfolio company of Hicks Muse Tate & Furst since last December, has completed a financial recap. As part of the deal, Choice Cable secured a new credit facility arranged by Toronto Dominion Securities, which also provided financing for HMTF?s initial acquisition of the company. No other recap terms were disclosed.

Colony Capital LLC, a U.S.-based private equity firm, has agreed to pay $859 million to acquire the hotel business of Raffles Holdings Ltd.

PE-Backed IPOs

Dresser-Rand Group Inc., an Olean, N.Y.-based provider of energy conversion technologies, has set its proposed IPO terms to 22.5 million common shares being offered at between $19 and $21 per share. It plans to trade on the NYSE under ticker symbol DRC, with Morgan Stanley and Citigroup serving as lead underwriters. Dresser-Rand was acquired last year for $1.2 billion by First Reserve Corp. from Ingersoll-Rand Company Ltd. (NYSE: IR). www.dresser-rand.com

Advanced Analogic Technologies Inc., a Sunnyvale, Calif.-based provider of power management semiconductors for mobile consumer electronic devices, has set its proposed IPO terms to 10.6 million common shares being offered at between $8.50 and $9.50 per share. It plans to trade on the Nasdaq under proposed ticker symbol AATI, with Morgan Stanley and Merrill Lynch serving as lead underwriters. Advanced Analogic has raised VC funding from such firms as Battery Ventures, Sunsino Ventures, Maton Fund and Vision 2000 Venture Ltd. www.analogictech.com

Unica Corp. a Waltham, Mass.-based provider of enterprise marketing management software, has slightly reduced its proposed IPO offering price from $9.50-$11.50 per share to $9-$11 per share. It still plans to offer 4.8 million common shares. The company has raised over $10 million in total VC funding since its 1992 inception, with backers including Summit Partners and JMI Equity. Deutsche Bank Securities is serving as lead underwriter for the IPO. www.unicacorp.com

PE-Backed M&A

Contex Scanning Technology AS of Denmark and Z Corp. of Burlington, Mass. have agreed to merge into a single provider of color scanning and 3D printing solutions for the engineering market. No financial terms were disclosed, except that existing Contex backer EQT Partners continues to support the company. The deal is expected to close sometime this quarter, with the combined company expected to generate over $100 million in annual revenue. www.contex.com www.zcorp.com

Roche has agreed to acquire GlycArt Biotechnology AG, a Switzerland-based biotech company focused on developing proteins and antibodies for unmet medical needs in areas like oncology, for Chf235 million ($180.17 million). GlycArt has raised VC funding from Gilde Inv*stment Management, Deutsche VC, ABN AMRO Capital, BioMedinv*stor, Life Science Ventures, Novartis and Quester Capital Management. www.glycart.com

Sosei Co. Ltd. of Japan has agreed to acquire Arakis Ltd., a UK-based drug company focused on inflammatory diseases and pain management. The deal is valued at Gbp106.5 million, including Gbp11.7 million in cash and the new issuance of 35.630 shares of Sosei stock (Sosei trades on the Tokyo exchange). Arakis has raised VC funding from 3io Group, Merlin Biosciences, Alice Ventures, De Novo Ventures, Nomura International, Novo AS and Scottish Equity Partners. www.arakis.com

H.J. Heinz Co. (NYSE: HNZ) has agreed to acquire frozen quiche and appetizer maker Nancy?s Specialty Foods Inc. from affiliates of Kohlberg & Co. for an undisclosed amount. www.nancys.com

Firm & Fund News

Accel Partners and IDG Technology Venture Investment have launched a $250 million fund to back emerging technology companies in China. It will be managed by IDG Technology Ventures (which has managed IDG?s VC funds in China since 1992). www.accel.com www.idgventures.com

C.E. Unterberg Towbin, a New York-based I-bank, has partnered with the Chesapeake Innovation Center, a business accelerator focused on homeland security, on a research endeavor that also will capitalize on homeland security sector opportunities from both an inv*stment and strategic perspective. www.cic-tech.org

Ciclad, a France-based private equity firm, has closed its fourth fund with 120 million euros, according to PrivateEquityOnline. Limited partners include HarbourVest Partners, Candover, LGT Capital Partners, SVG Capital, Credit Agricole and Martin Currie. www.ciclad.com

Human Resources

John Joyce has agreed to join Silver Lake Partners as a managing director based in New York. He has been with IBM Corp. for 30 years, and most recently served as senior vice president of IBM, and as group executive of IBM Global Services. www.silverlake.com

Danial Faizullabhoy has joined JatoTech Ventures as a managing director. He previously served as a managing director with Walden International. JatoTech is an Austin, Texas-based VC firm focused on early-stage semiconductor companies. www.jatotech.com

Fred Reynolds has been named president, COO and CFO of Evercore Partners, effective early next month. Since 2001, he has served as president and CEO of Viacom Television Stations Group and, before that, as executive vice president and CFO of Viacom Inc. and its predecessor companies CSB Corp. and Westinghouse Electric. www.evercore.com

Theresa Boni has joined Nutter McClennen & Fish as an associate in the law firm?s business department. She previously served as associate general counsel of Thermo Electron Corp. (NYSE: TMO). www.nutter.com

Brett Crabtree has joined Bridge Healthcare Finance as a director and head of the firm?s new Irvine, Calif. office. He most recently served as vice president of Marsh & McLennan?s private equity and M&A global services group. www.bridgehcf.com

Christian Strain has joined Summit Partners as a London-based vice president. He previously worked with Apax Partners in Paris. www.summitpartners.com

Elizabeth Hughes has joined Legg Mason Capital Management as senior vice president of corporate strategy. She previously was a principal with McKinsey & Co., working with asset management clients. www.leggmason.com

Peter Currie, president of Currie Capital LLC, has been named to the board of Safeco Corp. (Nasdaq: SAFC). He is a former managing member of General Atlantic and, before that, served as a partner and co-founder of The Barksdale Group. www.safeco.com

Arnaud Peres is joining the new Paris office of law firm David Polk & Wardwell as its first partner based outside the U.S., effective August 1. He previously served as a partner with Freshfields Bruckhaus Deringer, and focuses on public and private M&A, restructurings and equity capital market transactions. www.dpw.com

MONDAY, JULY 18

Battery Ventures Is Not Alone

Last Friday, this space briefly noted that a Beijing-based group of grifters had launched a website that virtually mirrored that of Wellesley, Mass.-based Battery Ventures, down to headshots of Battery Ventures general partners and the names of Battery Ventures portfolio companies. Copyright fraud is the obvious crime here, although securities fraud would be a close second if someone can prove that the folks calling themselves ?American Battery Investment Group? have traded on Battery Ventures? reputation to raise/steal capital of its own. In fact, Battery Ventures is taking the insidious imitation seriously enough to post a ?we are not affiliated? message on its homepage.

But Battery is only the latest in a growing line of firms that have seen their websites be used as scam templates. For example, take a look at this site for a group calling itself ?American Union International Investment Group.? The splash page might not look familiar, but go inside to a section like Assets Under Management. Now compare it to the Assets Under Management section on The Carlyle Group?s website. That?s right, an exact match.

Further exploration of the AUIIG site finds even more content copied and pasted directly from Carlyle?s site, plus a bunch of phony bios for a bunch of phony partners (plus a bunch of fictional advisory board members with familiar last names like Bush and Clinton). Had you looked at the site a couple weeks back, however, you would have found bios for actual Carlyle professionals with the first names changed (e.g., David B. Daniel suddenly became David B. Green). AUIIG also is a China-based site featuring an alternate phone number on the West Coast, although a private equity attorney I spoke with this morning says that he?s seen similar rip-off sites emanating from countries in Europe.

The reason all of this matters, of course, is because these sites are designed to steal people?s money. The Chinese-language version of the ?American Battery Investment Group? site implies that entrepreneurs can receive VC funding after paying a small processing fee. A source told me that the AUIIG folks had an in-person fund-raising meeting with someone in Asia, and only were discovered after that person called up Carlyle Group (with which he had an existing relationship) and said: ?Hey, this new group sounds like they do the same thing Carlyle does.?

While law enforcement and the SEC try sorting all of this out ? in part via the CA phone numbers and mailing addresses ? I would recommend that private equity firms do a bit of sleuthing on their own in order to learn if their own sites have been copied. Take phrases specific to your website and drop them into search engines like Google. Also probably a good idea to translate one into Chinese and drop it into Baidu.com. Make sure to let me know if you find something, so that we can warn PE Week Wire readers.

Top Three

 

Whirlpool Corp. (NYSE: WHR) has emerged as the third possible bidder for Maytag Corp. (NYSE: MYG), after submitting an unsolicited $17 per share proposal. Maytag originally accepted a $14 per share offer from private equity firm Ripplewood Holdings, but has since given consideration to a $16 per share offer from a consortium that includes Bain Capital, Blackstone Group and Chinese appliance company Haier America Trading. Ripplewood already has claimed that Maytag’s discussions with the Bain/Blackstone/Haier group could provide grounds for exercising the termination clause, while Maytag disagrees and says it will consider all three proposals. www.maytag.com

Affymax Inc., a Palo Alto, Calif.-based drug development company, has raised $60 million in Series D funding. Jafco Co. Ltd. and return backer Bear Stearns Health Innoventures co-led the deal. In addition to Jafco, new inv*stors included Bessemer Venture Partners, Merlin BioMed Group and Diamond Capital Co., while other return participants included Apax Partners, MPM Capital and Sprout Group. Affymax has raised over $150 million in total VC funding since its 2001 inception. Its lead drug candidate is being developed for the treatment of anemia in patients with chronic kidney disease and cancer. www.affymax.com

Thomson Venture Economics and the National Venture Capital Association have released Q2 2005 fund-raising data. It shows that 43 U.S.-based VC funds raised $6.1 billion last quarter, which is a 6.5% bump from the $5.7 billion raised by 61 funds in Q1 2005. Read the PE Week article at www.pewnews.com, and get the charts in today?s print edition. www.ventureeconomics.com www.nvca.com

VC Deals

Zazzle.com Inc., a Palo Alto, Calif.-based operator on an online customized products marketplace, has raised $16 million in Series A funding. Kleiner Perkins Caufield & Byers led the deal, and were joined by Sherpalo Ventures. www.zazzle.com

ConSentry Networks Inc. (f.k.a. Tidal Networks), a Milpitas, Calif.?based provider of enterprise network security solutions, has raised $17 million in Series C funding. Invesco Private Capital was joined on the deal by return backers Accel Partners and Sequoia Capital. The company has raised $31 million in total VC funding since its 2003 inception. www.consentry.com

Ellacoya Networks Inc., a Merrimack, N.H.-based provider of bandwidth management solutions for broadband service provider networks, has raised $13.5 million in Series D funding. BCE Capital led the deal, and was joined by Canaan Partners and return backers Atlas Venture, Flagship Ventures and Lightspeed Venture Partners. Ellacoya has raised over $163 million in total VC funding since its 1999 inception, including a December 2002 recap. www.ellacoya.com

RoyaltyShare Inc., an Encinitas, Calif.-based provider of online services for the management and accounting of royalty payments, has raised over $2.5 million in a Series A funding round led by Trident Capital, according to a regulatory filing. The company is planning to raise upwards of $5 million.

PeptImmune Inc., a Cambridge, Mass.-based drug company, has raised $20.4 million in Series C funding (this is inclusive of the $18.66 million reported here last month). Return backers include New Enterprise Associates, Prism Venture Partners, Vanguard Ventures, MPM Capital, Hunt Ventures and Boston Medical Inv*stors, while new supporters include Itochu Corp. and Silicon Valley Bank Capital. www.peptimmune.com

Columna, an Australia-based developer of spinal implant technology, reportedly has raised Au$3.5 million in VC funding from Queensland BioCapital Fund.

Quickshift Inc., an Austin, Texas-based developer of performance acceleration technologies, has raised $5.2 million in new venture capital funding from CenterPoint Ventures, InterWest Partners and STARTech Ventures. www.quickshift.com

Xention Discovery Ltd., a UK-based drug discovery company, reportedly has raised Gbp11 million in new VC funding from ABN AMRO Capital, Albany Venture Managers, BTG International, MVM Ltd. and Quester Capital Management. www.xention.com

Nevis Networks Inc., a Santa Clara, Calif.-based provider of LAN security systems, has raised $12.5 million in additional Series B funding. New Enterprise Associates was joined on the deal by return backers BlueRun Ventures and New Path Ventures. The Series B round total now stands at $22.5 million, while Nevis? total VC capitalization is $32.5 million. www.nevisnetworks.com

Mobidia Technology Inc., a British Columbia-based wireless technology company, has raised Cdn$2.5 million in second-round funding from Discovery Capital Management, Business Development Bank of Canada and B.C. Advantage Funds. www.mobidia.com

Buyout Deals

Questor Management Co. has agreed to sell Santa Ana, Calif.-based freight forwarder and logistics service provider GeoLogistics Corp. to Kuwait-based PWC Logistics. The deal is valued at approximately $454 million on a debt-free basis, with GeoLogistics senior management remaining in place. www.geo-logistics.com www.pwclogistics.com

Vector Capital has acquired WinZip Computing Inc., a Mansfield, Conn.-based maker of the WinZip compression utility. No financial terms were disclosed. www.vectorcapital.com www.winzip.com

Cendant Corp. (NYSE: JCD) today could announce the winning bidder for its marketing services division. Various press reports today suggest that Apollo Management may have topped Bain Capital in the auction, with both bids believed to be well in excess of $2 billion. www.cendant.com

Brookstone Inc. (Nasdaq: BKST), a Merrimack, N.H.-based specialty retailer, today announced amended terms for its proposed acquisition by a consortium led by Singapore-based retailer OSIM International. Also participating are private equity firms J.W. Childs Associates and Temasek Holding Ltd. Existing Brookstone shareholders originally were expected to receive $20.50 per share, but that price now has been lowered to $20 per share. In addition, terms of the financing commitment from Goldman Sachs, UBS Loan Finance and UBS Securities has been modified. www.brookstone.com

Apax Partners has agreed to pay 565 million euros for Verestal Telecom International?s German unit, assuming Tele2 is able to acquire Verestal under the terms of a proposed 1.34 billion bid. In related news, Apax reportedly is considering a play for Vodafone?s German unit Arcor.

LamTech Inc., an Ephrata, Pa.-based maker of countertops and vanity tops, has completed a financial recap sponsored by Kildare Enterprises. LamTech was represented on the deal by The Benchmark Group. No financial terms were disclosed.

Time Warner Inc. (NYSE: TWX), Goldman Sachs and Apax Partners will not bid on UK television broadcaster ITV, according to The Financial Times. The proposed consortium reportedly had been prepping an $11.7 billion offer, but ultimately decided to disband over worries about ITV?s pension fund deficit.

PE-Backed IPOs

Golf Galaxy Inc., an Eden Prairie, Minn.-based retailer of golfing goods, has set its proposed IPO terms to around 3.33 million common shares being offered at between $11 and $13 per share. It plans to trade on the Nasdaq under ticker symbol GGXY, with Piper Jaffray and William Blair & Co. serving as lead underwriters. Significant shareholders include William Blair Capital Partners, Primus Capital and FdG Capital Partners. www.golfgalaxy.com

Genomic Health Inc., a Redwood City, Calif.-based provider of genomic-based oncology diagnostics, has filed to raise $75 million via an IPO of common stock. It plans to trade on the Nasdaq under ticker symbol GHDX, with JPMorgan and Lehman Brothers serving as lead underwriters. The company has raised approximately $100 million in total VC funding from groups like Kleiner Perkins Caufield & Byers, Versant Ventures, TPG Ventures, Baker Tisch Inv*stments, Integral Capital Partners, Invesco Private Capital, Incyte Corp., J.P. Morgan Fleming, Pfizer and CHL Medical Partners. www.genomichealth.com

Quadrapoint Acquisition Corp., a newly-formed blank check acquisition company based in Chicago, has filed to raise $75 million via an IPO. The entity is owned and managed by: Paul Lapping, president of Lapping Inv*stments and a former general partner with both Minatour Partners and Merchant Partners; Peter Venetis, managing partner of Praxis Capital Ventures; and Brian Boorstein, former managing member of Gordian Inv*stment Partners.

PE-Backed M&A

SecurePipe Communications Inc., a Madison Wis.-based provider of managed network security services, has agreed to acquire the assets of Mycom Group Inc.?s (OTC BB: MYCM) managed services division and email management technologies. No financial terms were disclosed. SecurePipe has raised over $10 million in VC funding from groups like First Analysis Corp., Prism Capital and The Argentum Group. www.securepipe.com

IOCA Inc. (OTC BB: ICOA) has acquired LinkSpot Networks Inc., a Reston, Va.-based provider of broadband Internet networks and managed services in high-traffic public locations. No financial terms were disclosed. LinkSpot shareholders like Meritage Private Equity Funds will now become IOCA shareholders. www.linkspot.com

RAD Electronics Inc., an outsource provider of electronics manufacturing services, has raised $4.5 million in Series A funding. Chrysalis Ventures led the deal with a $3 million commitment, and was joined by Palisade Capital Management. RAD Electronics will use the proceeds to purchase the assets of electronics distributor Astrex Inc.

Firm & Fund News

San Francisco Equity Partners has launched as a private equity firm focused on expansion-stage opportunities in the IT, media, consumer and service industries. It was founded in partnership with LMS Capital, with founding managing partner Scott Potter having overseen LMS Capital?s North American private equity and VC portfolios over the past several years. SFEP?s initial capitalization is $80 million, and it already has the following five portfolio companies: Merriman Curhan Ford & Co. (AMEX:MEM), Method Products, Penguin Computing, Rave Motion Pictures and Modviz. www.sfequitypartners.com

Abingworth Management, a UK-based venture capital firm focused on life sciences, has held a $53 million first close on a new life sciences fund dedicated to publicly-traded companies. It is the firm?s first fund not dedicated to the private markets. www.abingworth.co.uk

KRG Capital Partners, a Denver-based private equity firm, has received $595 million in limited partner commitments for its third fund, according to a regulatory filing. It is seeking upwards of $690 million, with Probitas Partners serving as placement agent. www.krgcapital.com

Portfolio Advisors of Darien, Conn. has raised over $103 million to date for its third fund-of-funds, according to regulatory filings. Limited partners include the Archdiosesan Pension Plan of New York, Iowa West Foundation, Pennsylvania Medical Society Endowment Fund and the Snap-On Tools Collective Inv*stment Trust. The Fortress Group is serving as placement agent. www.portad.com

Human Resources

Jonathan Gilbert has joined New York-based I-banking consultancy Marlin & Associates as a transaction professional. He recently received his MBA from the Zicklin School of Busineess at Baruch College. www.marlinandassociates.com

Get last week’s complete PE Week Wire here.