PE Week Wire: Tuesday, August 26, 2008

Yesterday we sold more than 200 tickets to peHUB Across America II, which will be taking place next month in Denver, San Francisco and Seattle. It’s like a series of extended happy hours, except for the open bars and a disproportionate number of men wearing blue button-down shirts. We do it in part to promote peHUB, but mostly to give readers an excuse to meet each other and talk shop. Good time to be had by all…

Tickets cost just $10, with proceeds going to a local charity that will be voted on by event attendees (you can nominate a charity when signing up). Here’s the info:

• Denver

Tuesday, Sept. 23

The Wynkoop Bewing Co.

• San Francisco

Wednesday, Sept. 24

Pete’s Tavern (across from AT&T Park)

• Seattle

Thursday, Sept. 25

The Chapel Bar

BIG thanks to Square 1 Bank, which has stepped up as our regional sponsor. Also, mega appreciation to local sponsors Headwaters MB and the Rocky Mountain Venture Capital Association in Denver; Goodwin Procter and Gunderson Dettmer in San Francisco; and Cascadia Capital in Seattle.

*** Don’t KKR and Lehman Brothers kind of look like two firms that need each other right now? The former is going public to create a “public currency” to help expand the firm’s asset management firm via acquisition. The latter is looking to sell a bunch of its asset management units.

For example, CNBC yesterday reported that KKR is showing strong interest in Lehman’s Neuberger & Berman money management unit. Probably not at the terms Lehman wants – 70% stake sold at a $10b valuation, with an option to reacquire at a later date – but it’s still interest. It’s also possible that KKR could be considering Lehman carve-outs via more traditional LBO structures, but the timing would seem to favor the “public currency.”

I’m certainly simplifying things (for example, I didn’t mention South Korea), but sometimes things just make too much sense not to happen.

*** What happened to the European VC market last quarter? New data from Dow Jones indicates that just 167 deals were completed in Q2, which is the lowest quarterly tally in the nine years that DJ has tracked such things. Moreover, the €858 million disbursed is off 35% from the same period in 2006.

For context, VC investment in U.S. companies was basically flat between Q2 2007 and Q2 2008, and last quarter was actually up on Q1 2008. Is this just some sort of delayed drag? An anomaly? Or is there something fundamentally wrong across the pond?

*** Quiz Time: Can you name the venture capitalist who is set to take over as executive chairman of Rutberg & Co., the San Francisco-based investment bank focused on emerging growth companies in the wireless and digital media industries? Expect him to remain in his current VC gig, which is part-time. Hint: He and Bryan Rutberg once worked together at Montgomery Securities…

Top Three

JumpTap, a Cambridge, Mass.-based mobile search and advertising company, has raised $26 million in Series D funding. AllianceBernstein led the round, and was joined by return backers General Catalyst Partners, Redpoint Ventures, Summerhill Venture Partners, Valhalla Partners and WPP. The company has now raised around $73 million in total VC funding.

Dr Pepper Snapple Group Inc. has acquired a minority stake in Big Red Ltd., a Waco, Texas-based maker of carbonated soft drinks. The seller was Citicorp Venture Capital, which acquired Big Red last summer for an undisclosed amount.

ReachOut Healthcare America, a provider of mobile dental services primarily to underprivileged children in schools and foster programs, has acquired Mobile Dentists, a Farmington Hills, Mich.-based provider of at-school preventative dental services. No financial terms were disclosed. ReachOut is a portfolio company of Sentinel Capital Partners

VC Deals

Solazyme Inc., a South San Francisco, Calif.-based developer of biofuels through the use of microalgae, has raised $45.4 million in Series D funding, according to a regulatory filing. The deal included around $6.4 million of convertible securities. Braemar Energy Ventures and Lightspeed Venture Partners were joined by return backers like The Roda Group and Harris & Harris Group., a San Mateo, Calif.-based online advertising network, has raised $10 million in Series B funding. Norwest Venture Partners led the round, and was joined by return backer InterWest Partners.

Supponor Ltd., a Helsinki, Finland-based provider of digital billboard replacement solutions, has raised €6 million in Series A funding. Northzone Ventures and return backer Conor Venture Partners co-led the round.

Mall Networks, a Lexington, Mass.-based provider of merchant-funded loyalty shopping solutions, has raised $7 million in Series B funding. Dace Ventures led the round, and was joined by return backers Flybridge Capital Partners, Venture Capital Fund of New England and LBO Enterprises.

Qik (f.k.a. Vivisio), a San Mateo, Calif.-based mobile video broadcasting service, has raised an undisclosed amount of new funding from Marc Andreessen (co-founder of Ning and Netscape) and Ben Horowitz (co-founder of Loudcloud). It had previously raised a $3 million Series B round from individual angels like Marc Benioff (Salesforce), Arjun Gupta (Telesoft Partners) and George Garrick (Jingle Networks).

TripHub Inc., a Seattle-based online travel site operator, has closed its doors. The company had raised a small amount of VC funding from Madrona Venture Group.

Buyout Deals

GenNx360 Capital Partners has agreed to acquire Precision AeroPower Group from GSC Group. No financial terms were disclosed. PAG provides manufacturing and engineering services to the commercial aerospace, defense, and power generation industries. No financial terms were disclosed.

Hammond Kennedy Whitney & Co. has acquired Orlando, Fla.-based Crane Rental Corp., according to LBO Wire. No financial terms were disclosed.

Huron Capital Partners has acquired Response Mail Express from DME Holdings, for an undisclosed amount. RME is a Tampa, Fla.-based provider of direct marketing services for customers in such sectors as financial, insurance and mortgage services.

Marlin Equity Partners has acquired a controlling interest in Financial Consulting & Trading International Inc., a Los Angeles-based independent owner of ATMs throughout the U.S. No financial terms were disclosed.

Norske Skog has agreed to cut 100 million Norwegian crowns off the sale price of its South Korean paper mills to Morgan Stanley Private Equity Asia and Shinhan Private Equity.

The Riverstone/Carlyle Global Energy and Power Funds has completed its acquisition of Hudson Products Corp. from The Sterling Group. No financial terms were disclosed. Hudson Products is a Sugar Land, Texas-based provider of air-cooled heat exchangers and axial flow fans to the energy markets.It was advised on the deal by Harris Williams & Co.

Sopra Capital has acquired HouseMaster, a provider of home inspection services in the U.S. and Canada. No financial terms were disclosed.

TPG Capital has decided to pull out of the auction process for UK buy-to-let lender Paragon (LSE: PARA), according to The Financial Times. Other private equity firms, including Blackstone Group and Bridgepoint, are believed to still be conducting due diligence on Paragon.

PE Exits

Blackstreet Capital Partners has sold Houston Harvest Inc. and Gift Products Inc. to Signature Brands, a subsidiary of Switzerland-based Hero AG. No financial terms were disclosed. HHI/GPI is a Franklin Park, Ill.-based supplier of seasonal food gifts to big-box retailers like Wal-Mart.

Perseus has agreed to sell its stake in Workflow Management Inc. to blank check acquisition company Enterprise Acquisition Corp. (AMEX: EST), as part of a $669 million merger agreement. Perseus will retain an ownership position. Workflow Management provides print and promotional products and fulfillment solutions in North America.

PE-Backed M&A

DriverSide Motors, a San Francisco-based operator of an automotive research and information website, has acquired FairBenjamin, a website for finding local mechanics. No financial terms were disclosed. DriverSide has raised an undisclosed amount of VC funding from Catamount Ventures.

Orchard Brands, a portfolio company of Golden Gate Capital, has agreed to acquire the misses apparel catalogs of Charming Shoppes Inc. (Nasdaq: CHRS). The deal is valued at $35 million in cash.

Firms & Funds

CLSA Capital Partners has launched a new fund that will invest in the Asian water and waste management sector. It is initially capitalized with $35 million from an undisclosed London-based firm.

Citic Capital of China is in talks to raise a yuan-denominated private equity fund. It is expected to receive a 1 billion yuan ($146m) commitment from government-owned National Social Security Fund, and another 1 billion from its parent company Citic Group.

Human Resources

Jon Mansfield has joined mezzanine debt provider Praesidian Capital Investors, after having been a partner with WP Global Partners. LBO Wire first reported the news, which peHUB has since confirmed.

Alan Resnikoff and Kevin Diestel have joined Shamrock Capital Advisors as a senior associate and associate, respectively. Resnikoff is rejoining the firm after receiving his MBA from Stanford, while Diestel previously was an I-banker with Merrill Lynch.

DLA Piper has added eight partners to its corporate and finance practice, from the law firm of Thelen Reid Brown Raysman & Steiner. This includes Jeffrey Steiner, who will serve as the co-chair of DLA Piper’s finance practice.