PE Week Wire: Wed., Feb. 6, 2008

Today’s regularly-scheduled column fell apart at the last minute (if only my sources could agree, the world would be a better place). So some very quick hits:

*** A bunch of you have asked if “Bad News” is going to become a regular feature down below. If circumstances warrant it, yes. Three more busts today, including two LBO-related bankruptcies. Welcome to the reckoning.

*** An informed source wrote in to say that Microsoft is not slowing down its acquisition pace, despite the attention being paid to Yahoo.

*** Quiz Time: Can you name the member of a mega-buyout firm who is advising Microsoft on its Yahoo takeover attempt? Hint: Used to be a banker.

*** Summit Partners is raising €1 billion for its debut European fund, which will be managed out of an existing London office. The plan is to make most European investments out of this new vehicle (once raised), but to co-invest with Summit’s general fund on particularly large deals. One driver for the bifurcation was to provide better currency options for both LPs and the GP.

*** I was up late last night watching election results, but couldn’t shake my annoyance with: (A) The notion of superdelegates on the Democratic side; and (B) Winner-take-all primaries on the GOP side. Both are antithetical to what the process should be about.

*** 5 Questions for David Panton of Navigator Capital Partners, which yesterday acquired a subprime auto finance company.

*** Chuck Grassley says his bill to raise taxes on publicly-traded PE firms is stalled, but he’s moving ahead will efforts to raze offshore tax shelters.

*** European buyout bigs form their own lobbying group.

* Steven Davidoff doesn’t have much sympathy for Blackstone’s position in the ADS case.

*** Rob Shurtleff on bridge notes to nowhere.

*** Carl Icahn is apparently launching a blog, so this is a good time to remind you that I’ll be interviewing the activist king at Buyouts East on March 5 in New York. Hope to see many of you there…

Top Three

Alpharma Inc. (NYSE: ALO) has agreed to sell its Active Pharmaceutical Ingredients division to 3i Group for around $395 million. The Norway-based business focuses on active ingredients and finished dosage forms of antibiotic products like Vancomycin, Bacitracin and Polymyxin. It reported $138.7 million in revenue over the first nine months of 2007.

Silver State Helicopters has filed for Chapter 7 bankruptcy protection, just five months after selling a 60% ownership stake to Eos Partners for around $30 million. That investment is now lost. The liquidation was triggered by Citibank’s decision to stop providing loans to Silver State’s 2,700 flight students. The company had around 750 employees.

Canaan Partners has closed its seventh venture capital fund with $650 million in capital commitments. Its prior fund closed in 2005 with $450 million. In other Canaan news, the firm has promoted healthcare investor Stephen Bloch from venture partner to partner.

VC Deals

Moksha8, a San Francisco-based biotech company focused on developing and commercializing high-value therapeutics for Asia and other growth markets, has raised $39 million in combined Series A and Series B funding, according to regulatory filings. TPG Biotech led the $24 million Series A round, and was joined on the $15 million Series B round by Lit Tele LLC of Brazil.

Kobalt Music Group Ltd., a UK-based provider of tech-enabled music publisher solutions, has raised $16 million in second round funding. Balderton Capital led the round, and was joined by return backer Spark Ventures PLC.

Consim Info Pvt Ltd. (f.k.a. BharatMatrimony), an India-based provider of online matrimonial services, has raised $11.75 million in Series B funding. Mayfield led the deal, and was joined by return backers Canaan Partners and Yahoo. The company had raised an $8.6 million first round in 2006.

XinLab, a Milpitas, Calif.-based provider of steaming media technologies, has raised nearly $8.1 million in Series A funding, according to a regulatory filing. New Enterprise Associates led the round, with NEA’s Kittu Kolluri and Xiaodong Jiang taking board seats.

Alverix Inc., a Wayne, Pa.–based provider of point-of-care diagnostics technology, has raised $7.7 million in Series A funding. New Venture Partners and Safeguard Scientifics co-led the round. Alverix is a spinout of Avago Technologies, the former Agilient semiconductor products group now owned by KKR and Silver Lake Partners.

a la Mobile, a San Ramon, Calif.-based open Linux system platform and open source technology provider for mobile phones, has raised $6.75 million in Series B funding, according to a regulatory filing. Return backer Venrock led the deal, with managing partners Ray Rothrock and Tony Sun sitting on the board of directors., a Glen Allen, Va.-based online job site for part-time and full-time hourly recruitment, has raised $5 million in Series B funding, according to a regulatory filing. Return backers include Adams Street Partners, Baird Venture Partners and C&B Capital. The company raised a $9 million Series A round in 2006.

VKernal Corp., a Portsmouth, N.H.-based provider of virtual appliances for managing virtual server environments, has raised $4.6 million in first-round funding. Hummer Winblad Venture Partners and Polaris Venture Partners co-led the round.

Numobiq Inc., a Pleasanton, Calif.-based developer of software that can turn regular mobile handsets into smartphones, has raised $4.5 million in Series A funding from Benchmark Capital. Benchmark’s Mitch Lasky has taken a board seats.

Flypaper Studio Inc., a Phoenix-based provider of rich media content software and services, has raised $3 million in Series A funding from Sierra Ventures and SCF Arizona.

Buyout Deals

Axia Capital Partners has acquired Cable Design and Manufacturing, a Lowell, Mass.–based provider of contract manufacturing for custom cable and harness assemblies. No financial terms were disclosed. CDM will be renamed Segue Manufacturing Services LLC.

Baring Private Equity Asia has taken a “significant minority” position in Amsino Medical Group, a Pomona, Calif.-based maker of disposable medical devices. No financial terms were disclosed.

Energy Investors Funds and Enpower Corp. have acquired Landfill Energy Systems, owner and operator of eighteen landfill gas-to-energy projects located in nine states. No financial terms were disclosed.

Navigation Capital Partners has acquired a majority stake in Exeter Finance Corp., a Dallas-based company that buys and services nonprime auto installment sales contracts. Navigation and co-investment partner invested $20 million, and have committed to invest up to another $40 million.

Parthenon Capital has sponsored a recapitalization of Bryant & Stratton College Inc., a Buffalo, N.Y.-based provider of post-secondary career education. No financial terms were disclosed. McColl Partners advised Bryant & Stratton on the deal.

Universal Trailer Corp., a Cincinnati-based manufacturer of specialty trailers, has raised $45 in private equity funding from Corporate Partners II, a Lazard-managed fund. LBO Wire reports that the deal shifts majority ownership to Corporate Partners, from prior backer Dubin Clark & Co.

PE Exits

CounterPath Corp. (OTCBB: COPA), a provider of desktop and mobile VoIP software, has acquired BridgePort Networks Inc., a Chicago-based provider of fixed-mobile convergence solutions for service providers. No financial terms were disclosed. BridgePort had raised $48 million in VC funding since 2003, from firms like General Catalyst Partners, Polaris Venture Partners, Summerhill Venture Partners and TD Capital.

PE-Backed M&A

Canon Communications LLC, a Los Angeles-based B2B publisher and event organizer, has acquired the Pharmapack trade show from French event organizer Oriex. Pharmapack begins today, and is an annual event for the European pharmaceutical packaging industry. No financial terms were disclosed. Canon is a portfolio company of Apprise Media, which in turn is controlled by Spectrum Equity Investors.

Ceridian Corp., an HR services provider taken private last year by Thomas H. Lee Partners and Fidelity National Financial, has acquired certain assets of COLT Express Outsourcing Inc., a Walnut Creek, Calif.-based benefits administration outsourcing company. No financial terms were disclosed.

Emerald Performance Materials LLC, a Cuyahoga, Ohio-based portfolio company of Sun Capital Partners, has acquired CVC specialty Chemicals Inc., a Moorestown, N.J.–based maker of specialty epoxies, monomers, and catalysts for structural composites, adhesives, coatings and industrial applications. No financial terms were disclosed.

Jobing Inc., a Phoenix-based provider of locally-focused recruiting solutions, has acquired WorkMetro Inc., a San Jose, Calif.-based operator of local employment websites in 22 urban markets. No financial terms were disclosed. Jobing is backed by Great Hill Partners and JMI Equity, while WorkMetro had raised $5 million from Bessemer Venture Partners and Jafco Ventures.

Bad News

Revver Inc., a Los Angeles-based online video distribution company, is on the block for between $300,000 and $500,000, according to CNet. The company had raised nearly $15 million in VC funding from Draper Fisher Jurvetson, Bessemer Venture Partners, Draper Richards and William Randolph Hearst III.

Sirva Inc. (NYSE: SIR), a moving company doing business as Allied Van Lines and North American Van Lines, has filed for Chapter 11 bankruptcy protection. The move will wipe out the 24% ownership position still held by Clayton, Dubilier & Rice, which took the company public back in 2003. CD&R nonetheless will still record an overall gain from Sirva.

Human Resources

Ian Ross has joined Chicago-based private equity firm Concentric Equity Partners as a vice president. He previously was with Edgewater Funds and, before that, with Lincoln International and GE Capital.

Jack Holmes has joined Natural Gas Partners as a venture partner. He retired in December as CEO of Syntroleum Corporation.

Lightyear Capital has promoted David Cynn and Thierry Ho to managing director, and Michal Petzela to vice president.