PE Week Wire: Wed., April 18, 2007

Greetings from Day 2 of Buyouts Symposium East, where this afternoon I’ll be moderating a debate between Kevin Conway, managing partner of Clayton Dubilier & Rice, and Andrew Ross Sorkin, chief M&A reporter for The New York Times. The over-arching theme will be “Perceptions of Private Equity” – and the two will discuss everything from the propriety of management-led buyouts, increased shareholder opposition to take-privates, over/under leveraging of debt and whether or not the general biz press gives LBO firms a fair shake. Should be a good time had by all…

And I do mean ALL. This debate is the Symposium’s final event, and we’ve decided to open it up to the general public. No payment required, just a shirt, shoes and (preferably) jacket. Oh, and you need to tell the registration desk that you are a reader of PE Week Wire or peHUB. It begins at 3:30pm sharp in Ballroom B of the Grand Hyatt here in New York City, which is on 42nd between Lex and Park (right next to Grand Central Station). I hope to see a bunch of you there…

*** Congratulations to The Carlyle Group, which last night took home top honors as Buyout Firm of the Year. Deal of the Year went to Cerberus’ acquisition of GMAC. To see a full list of all the winners, just go here.

*** Speaking of Deals of the Year, there was a rumor going around that Parthenon Capital had won a few years ago for Atkins Nutritionals – which proved to be one of the bigger buyout blunders in history. But I’m relieved to report that I can find no record of such an award. On the flipside, however, Buyouts editor David Toll did note last night that Heartland Industrial Partners once won Firm of the Year, even though it has since become a sinkhole whose founder recently received a federal indictment for fraud. So sleep well tonight Carlyle and Cerberus, but not too well…

*** Am I the only one who just assumed that RIM would have a backup plan in case its Blackberry email service suffered a severe interruption? Bad day to be a biz traveler… Unless you use a Treo.

*** A (very) brief recap of Dan D’Aniello’s keynote address can be found here, while Alex did some transcribing of the LP Panel. Moving further south, Joanna Glasner reports in from the NVCA Annual Meeting in Washington D.C.

*** Best part of my “Take-Private” panel yesterday was the consistency with which the buyout pros – from Carlyle, TH Lee and TPG – deferred particularly sensitive questions to John Coyle, head of J.P. Morgan’s financial sponsors group. And he bailed them out each and every time…

Top Three

Orica Ltd., the world’s largest commercial explosives maker, has rejected an Au$9.95 billion buyout offer from Bain Capital and The Blackstone Group. In a statement, Orica chairman Don Mercer said that the Au$32 per share bid “significantly undervalues Orica and its growth prospects.”

Sientra Inc., a Santa Clara, Calif.–based medical device maker focused on the plastic surgery and aesthetics market, has raised $85 million in Series B funding. OrbiMed Advisors led the deal, and was joined by Clarus Ventures, Goldman Sachs and TIAA-CREF. In related news, Sientra has acquired Silimed Inc., a maker of plastic surgery implants for both cosmetic and reconstructive surgery. No financial terms were disclosed for the acquisition.

Stallion Oilfield Services Inc., a Houston, Texas-based provider of well-site support, construction and logistics services to oil exploration and production companies, has filed for a $400 million IPO. It had filed for a $287.5 million IPO in early 2006, but later withdrew in order to “be consistent with the public interest and the protection of investors.” The new offering uses the same underwriters – Lehman Brothers, Credit Suisse and UBS. Carlyle/Riverstone is the company’s largest single shareholder.

VC Deals

Cordys Holding BV, a Dutch provider of business process management software, has raised $80 million in private equity funding. Argonaut Private Equity led the round with a $67 million investment, in exchange for a significant minority ownership position. Company founder and majority shareholder Jan Baan also participated.

aTyr Pharma, a San Diego-based drug company focused on developing a novel class of naturally-occurring protein biologics for therapeutic application, has raised $10.5 million in Series B funding. Alta Partners and Polaris Venture Partners co-led the round, which also included Imagene and return backer Cardinal Partners.

Biocept Inc., a San Diego-based developer of cell enrichment and extraction technologies, has raised $9.43 million in Series F funding, according to a regulatory filing. Backers include Goodman Medical Ireland Ltd. and SMC Corp.

Buyout Deals

Bain Capital and Thomas H. Lee Partners reportedly will raise their offer for Clear Channel Communications from $37.60 per share to $39 per share. The firms have been holding firm for months, but have become concerned that they could fall short in the shareholder vote, which is expected to be postponed by a few more days.

Hellman & Friedman has agreed to acquire Catalina Marketing Corp. (NYSE: POS) for $1.7 billion (including $136 million of assumed debt). The $32.50 per share offer is $0.40 higher than an earlier buyout offer for Catalina from ValueAct Capital. Goldman Sachs is advising Catalina on the sale, while H&F has received financing commitments from Bear Stearns and Morgan Stanley.

The Carlyle Group has withdrawn its $5.5 billion buyout offer for listed Taiwanese computer chip tester Advanced Semiconductor Engineering. The move came after Carlyle declined to significantly raise its initial NT$39 per share offer (went up to NT$39.50), despite ASE objections that the offer didn’t “reflect the company’s true value.”

The Blackstone Group reportedly is in talks with Spain’s Supermercados El Arbol, about a joint bid for Catalan supermarket operator Caprabo.

Gambro Healthcare, owner of dialysis clinics in 15 countries, could be on the block for around $800 million, according to Bloomberg. Gambro’s owner is Sweden’s Wallenberg family, which has retained Goldman Sachs to explore a possible sale.

HitecVision has agreed to acquire a 49% position in Sorco Group, a Norway-based provider of systems and services to oil and gas industry. No financial terms were disclosed. Sorco Group expects to generate around $270 million in 2007 revenue.

Stonegate Production Co., a Houston, Texas-based startup oil & gas company, has raised $200 million from Pine Brook Road Partners and Soros Strategic Partners.

Excalibur Electronics Inc., a Miami, Fla.-based maker of electronic products sold to big-box retailers, has raised an undisclosed amount of private equity funding from Palm Beach Capital. No additional details were disclosed.

Apax Partners is considering a €50 per share offer for a 25% stake in Adidas, according to Financial Times Deutscheland.

PE-Backed IPOs

Masimo Corp., an Irvine, Calif.-based provider of non-invasive patient monitoring products, has filed for a $150 million IPO. It plans to trade on the Nasdaq under ticker symbol MASI, with Piper Jaffray and Deutsche Bank Securities serving as co-lead underwriters. The company has raised over $76 million in total VC funding since 1992, from firms like Invesco Private Capital (8.6% pre-IPO stake), Steelpoint Capital Partners (5.6%), DSV Partners (5.4%) and Franklin Templeton Group (5.3%).

Hhgregg Inc., an Indianapolis-based retailer of audio/video products, branded appliances and accessories, has filed for a $172.5 million IPO. It plans to trade on the NYSE under ticker symbol HGG, with Credit Suisse and Lehman Brothers serving as co-lead underwriters. Freeman Spogli & Co. is the company’s largest shareholder with a 64% pre-IPO stake, followed by CalSTRS (10.5%).

Neiman Marcus is considering an IPO, according to a report from Women’s Wear Daily. The high-end retailer was acquired less than two years ago for just over $5 billion by TPG and Warburg Pincus.

Acorn International, a Shanghai, China-based marketer of consumer products through a TV home shopping network, has set its proposed IPO terms to 23.1 million ordinary shares being offered at between $12.50 and $14.50 per share. It plans to trade on the NYSE under ticker symbol ATV, with Merrill Lynch and Deutsche Bank serving as co-lead underwriters. SAIF Partners holds a 26.6% pre-IPO position.

PE-Backed M&A

Telecorps Communications, a portfolio company of H.I.G. Capital, has acquired Coffey Sound, a Hollywood, Calif.-based renter, seller and repairer of audio equipment for the television and film industry. No financial terms were disclosed.

PHNS, a Dallas-based provider of IT solutions for hospitals, has acquired Network Technology Group Inc., a Baton Rouge, La.–based provider of data center services, physical and network security protection, disaster recovery services and electronic data vaulting services for commercial customers. No financial terms were disclosed. PHNS is a portfolio company of Gryphon Investors.

MedAssets Inc. of Alpharetta, Ga. has agreed to acquire XactiMed, a Richardson, Texas-based provider of Web-based revenue cycle technologies and services to the healthcare industry. No financial terms were disclosed for the deal, which is expected to close next month. MedAssets is backed by Galen Partners, Grotech Capital Group and Parthenon Capital, while XactiMed is controlled by Buena Venture Associates, a fund founded by Sid R. Bass and Lee M. Bass.

PE Exits

The Blackstone Group has agreed to sell Extended Stay Hotels to the Lightstone Group for $8 billion. Blackstone will retain a 10% stake in Extended Stay, which it acquired in 2004 for approximately $3.13 billion (including $1.13 billion in assumed debt).

Admiralty Partners and Hastings Equity Partners have sold submarine cable manufacturer Seacon Phoenix Inc. for $38 million to Amtek Inc. (NYSE: AME).

Oracle Corp. has acquired AppForge Inc., an Atlanta-based maker of software for mobile handsets. No financial terms were disclosed. AppForge had raised around $24 million in VC funding since 2001, from firms like C&B Capital, Council Ventures, Grosvenor Funds, New Atlantic Ventures, SBK Capital and Sinclair Ventures.

TeleCIS Wireless Inc., a Campbell, Calif.-based developer of WiMAX fixed and portable broadband wireless chips, has sold its 16e WiMAX mobile SoC technology to Qualcomm. No financial terms were disclosed. TeleCIS has raised over $14 million in VC funding from ATA Ventures, Samsung Ventures, Bokwang Investment Corp., Korea Technology Investment Corp. and TurboTek Co. Ltd.

Firms & Funds

Hellman & Friedman has closed its sixth buyout fund with $8.4 billion in capital commitments.

Human Resources

Eric Mason has joined The Carlyle Group as managing director and head of Asian leveraged finance, effective in June. He previously was with J.P. Morgan Chase, as co-head of syndicated and leveraged finance for Asia-Pacific.