PE Week Wire — Tuesday, December 28

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In Memoriam

Some tragic news from the St. Louis venture community, as David Bergmann of Advantage Capital Partners has passed away at the age of 55. He had been successfully rescuing one of his dogs from a local pond, when he fell through the ice and drowned. Bergmann had co-founded Advantage Capital Partners in 1992, to enable economic development in traditionally underserved areas like St. Louis, New Orleans and Tampa. He had served as senior managing director of the firm’s St. Louis office, and previously had spent 15 years in the high yield securities department of Drexel Burnham Lambert.

A graduate of both Northwestern University (B.A.) and Washington University (M.B.A.), Bergmann served as a delegate to the White House Conference on Small Business on 1995, received an Ernst & Young entrepreneur of the Year award in 1998, received a Financial Services Advocate award in 1999 from the U.S. Small Business Administration and was active in Old Newsboys Charities, which funds children’s charities in St. Louis.

He leaves behind wife Peggy, daughter Katherine, son John, brother Stephen and sister Susan Calhoun. A memorial service will be held today at 2pm at St. Peter’s Episcopal Church in St. Louis. In lieu of flowers, the family requests that donations be sent to either: Old Newsboys Charities; 14522 S. Outer 40 Drive; Chesterfield, Mo. 63017 or Epworth Children & Family Services; 100 N. Elm Ave; Webster Grove, Mo. 63119.

Publishing Note: The PE Week Wire will not be published again until Monday, January 3 (unless something particularly newsworthy occurs before then). See you in the New Year…


Accuride Corp., an Evansville, Ind.-based maker of trailer and heavy-duty truck wheels, has agreed to acquire Transportation Technologies Inc. (TTI), a Chicago-based maker of truck components and subassemblies. TTI is controlled by Trimaran Capital Partners, while Accuride is controlled by Kohlberg, Kravis, Roberts & Co. Following the acquisition, existing Accuride shareholders will own 65% of the combined entity’s common stock, while TTI shareholders will hold the remaining 35 percent. No pricing terms were disclosed. In related news, TTI is expected to withdraw registration papers on a pending $150 million IPO.

Remon Medical Technologies Inc., a Waltham, Mass.-based medical device company with R&D facilities in Israel, has raised $26 million in Series C funding. New investors included Triathlon Medical Ventures, Medica Venture Partners and Guidant Corp., while return backers included Polaris Venture Partners, Concord Ventures, Lilly Ventures, KBL Healthcare Ventures and Ofer Hi-Tech. The company has raised approximately $46 million in total VC funding since its 1997 inception.

The Blackstone Group is interviewing I-banks to manage a $500 million IPO for New Skies Satellites NV, according to The New York Post. Blackstone acquired the Dutch satellite company just over one month ago.

Sandburst Corp., an Andover, Mass.-based fabless semiconductor company, has raised $15 million in Series E funding. New investor NeoCarta Ventures was joined by return backers Matrix Partners, Greylock, Investor Growth Capital and 3i Group. The company has raised over $70 million in total VC funding since its 2000 inception.

IC Media Corp., a San Jose, Calif.-based developer of CMOS image sensors, has raised $12 million in a Series D funding round led by return backer UMC Capital.

Quickie Manufacturing Corp., a Cinnaminson, N.J.-based provider of retail household cleaning tools, has received an undisclosed amount of private equity funding from private equity firm Centre Partners.

EntreMed Inc. (Nasdaq: ENMD) has raised $14 million via a PIPE financing. Buyers of the common stock and warrants included OrbiMed Advisors, Perceptive Life Sciences, Quogue Capital and Domain Associates.

Allied Capital Corp. has received letters from the U.S. Attorney for the District of Columbia, requesting that the firm preserve and produce information related to subsidiary Business Loan Express LLC, in connection with a criminal investigation. Allied Capital has been under informal SEC investigation for the past several months, due to allegations made by short-sellers that Allied has inflated certain valuation information. Allied has agreed to cooperate with the U.S. Attorney’s request.

   Monday, December 28

Monday Mouth-Off

The snow just stopped falling, gifts have been opened/returned and industry press releases have slowed to a trickle. In other words, it’s time for a bit of Monday Mouth-Off.

Most emails last week concerned Spectrum Equity’s fund-raising effort, and my contention that today’s niche-obsessed LPs may be reticent to invest in a firm that does both expansion-stage VC and LBO deals (even though it features a strong industry focus). Michael writes: “Your comments on Spectrum bring out a common problem in financial services. trying to be all things to all people. Michael Porter possibly said it best when he defined strategy as determining what you aren’t going to do. Strategy means having a focus, and staying away from things outside of that focus. Marketing (or fundraising in the case of private equity) depends on having recognition in the marketplace for that focus. A common example comes from discount retailers: Wal-Mart is the low cost provider, and Target the high style outlet – which is why K-Mart has had such a hard time; the low and high end niches are ‘full.’ You would think that more sophisticated private equity general par! tners would have realized this a long time ago. While this lack of focus is Spectrum’s current problem, I think you are letting them off too easily by saying it is not their fault – it is their business and they are responsible for running and growing it, understanding market trends, and evolving to focus on what the market needs.

Michael: Some interesting observations, but two quick points. First, I neglected to point out in my original column that Spectrum is not completely stage-agnostic, as it only invests in companies with enterprise values of $100 million or more. My bad. As for the suggestion that I let Spectrum off too easily, I see this as a “damned if you do, damned if you don’t” situation. If Spectrum maintains its semi-generalist (I know they despise that term) stance, LPs might pass on the fund. On the other hand, a decision to significantly change its strategy, could lead to the infamous criticism that the firm has strayed from its knitting, for the primary purpose of raising a fund. In other words, they have no legitimate foundation. Pick your poison.

Moving on to Dell Ventures, which recently met its maker (as first reported in this space). Linda writes: “Let me get this straight: All of these technology companies start VC units during the bubble, and then dismantle them in 2004. Do they understand nothing about investment cycles? At least stick around to make some money now, when valuations are reasonable and the economy is on the rebound.” Ron asks some of the same questions I asked Dell (to little avail): “If Dell Ventures made strategic investments in 2002 or 2003, why sell them off now? Are they no longer strategic? If so, whose strategy changed; the portfolio company’s or Dell’s? Did they just copy down all of the proprietary knowledge, and file it away somewhere?” By the way, the Dell Ventures website has been taken down.

Finally, a reader asked if there were any private equity/VC firms affected by yesterday’s tragedy in South Asia. I’ve done a bit of looking, but found no answers. I am aware that the Wire has readers in each of the affected countries, and sincerely hope that you and your families are safe. If there is anything you need, please let me know, and I’ll reach out to the larger Wire readership. You’re in our thoughts and prayers.


Landmark Partners has completed a $950 million secondary purchase of limited partnership interests in third-party private equity funds. The seller was J.P. Morgan Chase & Co., which inherited the interests as part of its acquisition of Bank One. One Equity Partners had been managing the relationships.

The Credit Suisse Group has agreed to sell its 19.9% position in Warburg Pincus back to the private equity firm. No financial terms were disclosed on the deal, which is expected to occur on January 1, 2005. Credit Suisse first acquired the stake in July 1999, and said that the sale would not affect any existing limited partner commitments to Warburg Pincus funds. The move comes less than a month after Credit Suisse’s investment banking division (Credit Suisse First Boston) announced plans to spin out its leveraged buyout group.

The Cypress Group and Goldman Sachs Capital Partners have completed their previously-announced $1.165 billion acquisition of the Cooper-Standard Automotive unit of Cooper Tire & Rubber Co. (NYSE: CTB). Cooper-Standard Automotive is a manufacturer of engineered components serving the automotive OEM market.

Barrett Xplore Inc., a New Brunswick, Canada-based wireless broadband service provider, has raised Cdn$30 million from Sandler Capital Management.

TetraData Corp., a Greenville, S.C.-based provider of educational data analysis software for the K-12 market, has received $4.3 million in VC financing from the Edison Venture Fund.

IKobo Inc., a Marietta, Ga.-based provider of online electronic payment and remittance services, has raised over $3.39 million in Series A funding. Total Technology Ventures led the deal, and was joined by Council Ventures, WS Investments LLC and seed-stage backers Global Bank of Commerce, company chairman John Chamberlin and company co-founder Emeka Ohuche.

Tectura Corp., a San Mateo, Calif.-based provider of Microsoft-integrated business solutions to mid-market companies and large enterprise divisions, has received $10 million in private equity funding from the General Electric Pension Trust.

JPMorgan Partners and Apollo Management have completed their previously-announced acquisition of movie theater chain AMC Entertainment Inc. The deal gives JPMorgan Partners a 50.1% interest, while existing AMC shareholder Apollo Management re-invested in exchange for a 49.9% stake. The entire transaction was valued at approximately $2 billion, including $1.67 billion in equity and the assumption of approximately $750 million in indebtedness, less around $400 million in cash and cash equivalents. AMC de-listed from the AMEX after close of trading last Thursday.

Lone Star Funds has agreed to acquire BI-LO Holdings LLC from Dutch retailer Royal Ahold NV for up to $660 million in cash. The deal is expected to close next quarter. BI-LO Holdings is the parent company of Southeastern U.S. supermarket chains BI-LO LLC and Bruno’s Supermarkets Inc.

CVC Capital Partners has beaten out The Carlyle Group in an auction for Spanish metal container company Mivisa Envases SA, according to The Financial Times. The winning bid is said to be valued at over 500 million euros, which had been the proposed price tag when PAI and Suala Capital Advisors put the company up for sale back in October.

Sunesis Pharmaceuticals Inc., a South San Francisco-based drug company focused on oncology and inflammatory diseases, has filed to raise $86.25 million via an IPO of common stock on the Nasdaq under proposed ticker symbol SNSS. The company has raised over $90 million in total VC funding since its 1998 inception, from significant shareholders like Abingworth Management, CSFB Private Equity, Mayfield, Venrock Associates and Warburg Pincus.

Madison River Communications Corp., a Mebane, N.C.-based rural local exchange carrier (RLEC), has filed to raise $345 million via an IPO. Shareholders include Madison Dearborn Partners, Goldman Sachs and Providence Equity Partners.

Craig Adas has been named managing partner of the Silicon Valley office of law firm Weil, Gotshal & Manges LLP. He is a corporate partner who runs the office’s private equity practice, and will replace Matthew Powers, who is stepping down after more than 12 years in the managing partner position.


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