PE Week Wire: Wed., April 30, 2008

Debacle or disguised blessing? That’s what I’m trying to figure out about Panorama Capital’s decision yesterday to end its fundraising drive with just $240 million in committed capital. Leaning toward the latter, but remain open to persuasion.

Panorama is a Menlo Park-based venture capital shop that focuses on early and expansion-stage opportunities in both the IT and life sciences sectors. Its team previously handled venture capital for JPMorgan Partners, but went independent when that firm divided in 2005 (its buyout group is now CCMP Capital). Panorama began raising its first independent fund in October 2005, and told me that the minimum size would be $400 million. Further reporting by a colleague uncovered designs to secure up to $550 million.

Panorama initially received a cornerstone investment from JPMorgan, but struggled to secure additional commitments. “After 50 years of investing and 50 exits by IPO and M&A, we were considered a first-time fund,” explains Rod Ferguson, a Panorama managing director. “It put us at a definite disadvantage.”

Panorama last fall cut its fundraising target to $300 million, according to VentureWire. At around the same time, it lost longtime principals Vikram Gupta and John Ryan and associate Francis Ho.

Fast forward to yesterday, and Panorama is done fundraising with $240 million. Ferguson says that it was just time to turn all of the firm’s attentions toward adding new portfolio companies (the fund already has six), and that the smaller size does not affect the firm’s investment strategy.

This is the “disguised blessing” part. Ferguson certainly didn’t say it, but $240 million simply makes more sense than $550 million — given that Panorama has kept a core team of five managing directors. You could justify more given that Panorama sometimes gets involved in pricey pharma deals, but $50 million per partner is generally considered a reasonable rate. Moreover, less money means less temptation to over-invest (a common VC trap, particularly on the IT side).

I’m sure that’s little consolation to the Panorama team in terms of saving face, but it may well pay off when it comes time to cut carry checks…

*** Quiz Time: Can you name the middle-market debt and equity investor that today is planning to close most, if not all, of its San Francisco office today? It also plans to close its entire Philly office tomorrow.

I’ve been hearing this as rumor for several weeks, but haven’t run it because the firm itself issued a strong denial. That’s still the reason why I’m holding off on naming it right now – even though the rumor does appear in another trade pub – but will certainly go with it on peHUB once I feel just a tad bit more comfortable. Expect something online by noon.

*** MMO publisher Turbine has scored a bunch of new VC funding. We’ve got the details at peHUB.

*** Alex reports that Kleiner Perkins has registered in Delaware to raise its thirteenth fund.

*** peHUB First Read, including news from the Milken conference and some surprising SPAC declines.

Top Three

MedAssets Inc. (Nasdaq: MDAS) has agreed to acquire Accuro Healthcare Solutions Inc., a Dallas-based provider of financial and operational solutions for healthcare providers. The deal is valued at approximately $350 million in cash and stock (including assumed debt). Accuro currently is in registration for a $143.75 million IPO, and is controlled by Welsh, Carson, Anderson & Stowe (79.94% stake).

Echo Global Logistics Inc., a Chicago-based BPO company focused on transportation and logistics, has filed for a $100 million IPO. It plans to trade on the Nasdaq under ticker symbol ECHO, with Lehman Brothers and Citi serving as co-lead underwriters. The company raised a $17.4 million venture round in 2006 led by New Enterprise Associates (15.4% pre-IPO ownership stake).

Catterton Partners has closed its debut growth equity fund with $300 million in capital commitments. The fund will target control investments in high-growth consumer companies requiring between $10 million and $30 million in equity. Catterton had previously closed its sixth buyout fund in June 2006 with $1 billion.

VC Deals

Concert Pharmaceuticals Inc., a Lexington, Mass.-based provider of small-molecule drugs for unmet medical needs, has raised $37 million in Series C funding. A “leading public equity institutional investor” led the round, and was joined by fellow new investors Adage Capital Management, SR One Ltd., Mediphase Venture Partners and Westfield Capital Management. Return backers included Three Arch Partners, TVM Capital, Skyline Ventures, Brookside Capital Partners Fund, Flagship Ventures, Greylock Partners, New Leaf Venture Partners and QVT Fund. Concert Pharma has now raised $95.5 million in total VC funding since 2006. Read more…

Apogenix GbBH, a German drug company focused on the targeted modulation of apoptosis, has raised €27.5 million in second-round funding led by Dievini Hopp BioTech.

Smashburger, a burgeoning burger chain, has raised $15 million from Consumer Capital Partners, to fund expansion.

WorkLight Inc., an Israel-based provider of Web 2.0 tools for the enterprise, has raised $12 million in Series B funding. Pitango Venture Capital led the round, and was joined by return backers Genesis Partners, Index Ventures and Imperva CEO Shlomo Kramer. Read more…

Cortera Inc. (f.k.a. eCredit), a Dedham, Mass.-based provider of online solutions for commercial credit and collections professionals, has raised $8 million in new funding. CIBC Capital Partners led the round, and was joined by return backers Fidelity Ventures and Battery Ventures. Fidelity Ventures acquired Cortera in 2006 and, with Battery Ventures, provided $11 million in growth capital. Read more…

SkyPilot Networks Inc., a Santa Clara, Calif.-based provider of carrier-class wireless mesh solutions, has raised $3.4 million in new VC funding. Return backers include August Capital and Mobius Venture Capital. SkyPilot has now raised over $70 million in total VC funding since 2001. Read more…

Pontiflex Inc., a Brooklyn, N.Y.-based operator of an online marketplace for leads, has raised $2.5 million in Series A funding. Greenhill SAVP and New Atlantic Ventures co-led the round. Read more…, a Beverly Hills-based online community to find and share professional documents, has raised $3.25 million in Series B funding led by Rustic Canyon Partners.

Wishpot, a Seattle-based provider of a social shopping plug-in application, has raised $1 million in Series A funding. Monster Venture Partners led the round, with H-Farm (Italy) and angel Adrian Hanauer also participating.

Mezzanine Management Ltd. has invested $15 million in Argyle Security Inc. (OTC BB: ARGL). The deal involved 18,750 newly-issued Series A convertible preferred shares. Argyle is a San Antonio, Texas-based provider of physical electronic security solutions. Read more…

Buyout Deals

Warburg Pincus has agreed to acquire a majority stake in Safetykleen Europe from JPMorgan Partners for approximately £565 million. Company management will hold the remainder. Safetykleen Europe is a pan-European provider of parts and component cleaning machines for the automotive and general industrial sectors. Read more.

PE-Backed IPOs

Local Matters Inc., a Denver-based provider of local search solutions like online yellow pages, has reset its IPO terms to 6.67 million common shares being offered at between $5.40 and $6.60 per share. It previously planned to offer 3.33 million shares at between $14 and $16 per share. Canaccord Adams is serving as lead underwriter. Local Matters has raised $43.5 million in VC funding since 2002, from firms like Spencer Trask Ventures (39.4% pre-IPO stake), Sandler Capital Partners (38.2%), Kings Road Investments (10.4%) and Software Seed Capital Partners (2.5%).

PE Exits

Crystal Food Services, a unit of Sun Capital Partners portfolio company Marsh Supermarkets, has sold most of its catering contracts to Centerplate Inc. (AMX: CVP). No financial terms were disclosed.

Sonic Solutions (Nasdaq: SNIC) has acquired Simple Star Inc., a San Francisco-based developer of a multimedia storytelling platform and online community. No financial terms were disclosed. Simple Star had raised just over $10 million in VC funding from Venrock and individual angels.

PNC Equity Partners has sold Home Made Brand Foods Inc. to Greencore Group PLC. No financial terms were disclosed. HMBF is a Newburyport, Mass.-based maker of freshly prepared foods for sale in supermarkets and through foodservice distributors.

Freenet is financing its €1.63 billion purchase of Debitel from Permira via a syndicated loan being arranged by six banks: Deutsche Bank, JP Morgan, Lehman, Royal Bank of Scotland, UBS and UniCredit.

PE-Backed M&A

HMP Communications, a provider of information and education for healthcare professionals, has acquired Princeton Media Associates LLC, a provider of continuing education and news for healthcare professionals. No financial terms were disclosed. SIG Growth Equity joined existing HMP backer Alta Communications to help fund the deal’s equity tranche, while debt was provided by GE Capital, Newstar Financial and Webster Bank National Associates. Princeton Media was represented by Berkey, Noyes & Co.

NXP Semiconductors has agreed to acquire the broadband media processing assets of Conexant Systems Inc. (Nasdaq: CNXT). The deal includes a $110 million up-front cash payment, and up to $35 million in earn-out considerations. NXP is the former semiconductor unit of Philips, which was acquired in 2006 by KKR, Bain Capital, Apax Partners, AlpInvest and Silver Lake Partners.

Strands, a Corvallis, Ore.–based developer of a personalized discovery platform and social recommender engine, has acquired Expensr, an online personal finance application. No financial terms were disclosed. Strands has raised $55 million in VC funding from Spanish bank BBVA and Debaeque.

Firms & Funds

Generation Investment Management has closed its Climate Solutions Fund with $683 million in capital commitments. The fund will invest in both public and private cleantech companies, and is chaired by Al Gore.

Arboretum Ventures of Ann Arbor, Mich. has opened an office in Cleveland. It will be managed by new venture partner Jon Snyder.

Human Resources

Edward Liddy, the retiring chairman of Allstate Corp., is joining Clayton Dubilier & Rice as a partner.

David Mayer has joined Abingworth Management as a partner, where he will focus on growth equity opportunities from the firm’s Waltham, Mass. office. He previously was a managing partner with Thoma Cressey Equity Partners.