PE Week Wire: Wednesday, August 13, 2008

Just a few quick hits, as I’m way behind on print deadlines. My plan had been to take care of all that last night, but then J surprised me with a copy of Madden ’09. If only I were strong enough to kick the habit…

*** Apollo Management and Lazard late yesterday announced that they’ve formed a strategic partnership that will make private equity investments in Europe. The effort will have a dedicated team in London, although no word yet on if there will also be a dedicated fund (Bruce & Black I LP?).

It’s also a bit unclear how this organization will work on a practical level, as “work in progress” is the phrase I keep hearing. The firms explicitly said that this is a non-exclusive partnership, with Apollo able to work with other banks in Europe, and Lazard will be allowed to work with other private equity firms. In other words, some high walls must be erected in order to prevent conflicts of interest. Not impossible, just tricky.

*** Speaking of Apollo, the firm yesterday amended its S-1 statement in order to register another 7.5 million shares. In the filing, it also revealed that it has closed on more than $14 billion for seventh private equity fund, which is targeting a total of $15 billion.

*** Most private equity-backed busts of late have been in the retail sector, but watch out for fast-casual dining. First came Bennigan’s, and now Centre Partners-backed Pizzeria Uno is going to miss a bond payment. What do they both have in common, beyond average food and faux-nostalgic décor? They both once counted me as an employee. Look out Thomson Reuters…

*** I keep reading all this hand-wringing about the lack of tech IPOs. Yes it’s a problem, but it’s far more reflective of the IPO market than the tech market.

*** Major apologies for a goof yesterday on peHUB, in a story about DAG Ventures raising a new fund. The vehicle will likely come in at $600 million, as opposed to the $800 million we reported. No excuses. We just got it wrong.

*** Self-Promotion Alert: I’ll be on CNBC tomorrow at 7:15am to discuss PE deal activity.

*** Happy to report that Erin is back from India today, which means she’ll be back blogging about buyouts at peHUB. Yay.

* peHUB First Read, including a survey that says most institutional investors expect another major financial firm to fail in the next six months.

* Michael Butler, CEO of Cascadia Capital, has a new excerpt from the book he’s serializing at peHUB. This one is titled: Financial World Enters the Era of Re-Regulation.

Top Three

CLS Ltd. (AX: CSL) has agreed to buy Talecris Biotherapeutics Holdings Corp., a U.S. operator of 56 blood plasma collection centers and two manufacturing facilities, for $3.1 billion. Sellers are Cerberus Capital Management and Ampersand Ventures.

Energy Future Holdings Corp. (f.k.a. TXU) has agreed to sell a 19.75% stake in Oncor Electric Delivery Co., operator of the largest electricity distribution and transmission system in Texas, to a private equity consortium co-led by Borealis Infrastructure Management and GIC Special Investments. The deal is valued at approximately $1.25 billion. Energy Future Holdings Co. was acquired last year for $32 billion by KKR and TPG Capital.

Siano Mobile Silicon Ltd., a Netanya, Israel-based mobile TV chipmaker, has raised $17.5 million in third-round funding. DFJ Tamir Fishman Ventures led the round, and was joined by return backers JVP, Star Ventures, Walden Israel, Bessemer Venture Partners and Inventec Appliances. Siano has now raised $52 million since 2005.

VC Deals

BrainsGate Ltd., a Caecarea, Israel-based developer of an electrical stimulation system that helps certain CNS disorders, has raised $27.5 million in Series C funding. Johnson & Johnson Development Corp. led the round, and was joined by VC-Fund Agate Medical Investments and return backers Elron Electronic Industries, Pitango Venture Capital, MB Venture Capital and Alice Lab.

Recommind Inc., a San Francisco-based provider of an enterprise search and categorization platform, has raised $7.5 million in Series B funding, according to a regulatory filing. Backers include Kennet Capital.

Netadmin Systems, a Swedish maker of automation software for business processes in broadband networks, has raised around $6.36 million in VC funding from Industrifonden and return backer Eqvitec.

nTelagent Inc., a Nashville, Tenn.-based provider of a retail payment management application for the healthcare industry, has raised $1.7 million in Series E funding. Backers include Burch Investment Group.

Marketbright, a San Bruno, Calif.-based provider of an on-demand marketing automation platform, has raised an undisclosed amount of Series A funding. Greycroft Partners and Knight’s Bridge Capital Partners co-led the round.

RoyaltyShare Inc., a San Diego-based provider of digital royalty solutions to the entertainment industry, has raised an undisclosed amount of new Series B funding from the William Morris Agency. This is the round’s third tranche, following $9 million worth of past infusions from Trident Capital and Bertelsmann Digital Media Investments.

Buyout Deals

Tandberg ASA has been approached by an undisclosed private equity firm about a possible takeover. Tandberg is a listed Norwegian video conferencing company with a current market cap of approximately $2 billion.

Goldman Sachs has agreed to lead $1.5 billion secondary purchase of private equity assets from ABN Amro, according to The Wall Street Journal. The package includes 32 European companies, and will be managed by an ABN spinoff named AAC Capital Partners.

The Blackstone Group is among several firms trying to buy up to four commercial buildings in Shanghai from Super Ocean Group. The deal could be worth upwards of $1 billion.

The U.S. Justice Department is looking to investigate claims that fraudulent trading may have caused the collapse of PE-backed energy trader SemGroup.

Boxwood Capital Partners has acquired the assets of Coffee Wholesale USA Inc., a Round Rock, Texas-based online retailer of coffee and beverage products. No financial terms were disclosed.

ReSteel, a European base metals recovery company, has raised an undisclosed amount of private equity funding from Icos Capital.

PE Exits

Novolipetsk Steel (LSE: NLMK) has agreed to buy U.S. steel pipe and tube manufacturer John Maneely Co. from an investor group that includes The Carlyle Group and the Zekelman family. The deal is valued at $3.53 billion, and is expected to close in Q4. Carlyle bought the company in 2006 for an undisclosed amount.

CHAMP Private Equity, an Australian private equity affiliate of Castle Harlan, reportedly will put both malt producer United Malt and fuel transport business Industrial Energy Services on the block. The deals could generate a combined Au$1 billion, and would come as CHAMP prepares to raise a new fund.

Chrysler LLC has identified over $1 billion in non-earning assets for potential sale. Cerberus Capital Management acquired the auto company last year.

Entegris Inc. (Nasdaq: ENTG) has completed its $158 million acquisition of Poco Graphite, a Decatur, Texas-based maker of graphite-based consumables and finished products for a variety of markets. Sellers included Cowen Capital Partners and J.H. Whitney & Co.

PE-Backed M&A

Arc Machines Inc., a Pacoima, Calif.-based developer and manufacturer of automated orbital welding systems, has acquired certain assets of Santa Monica, Calif.-based Exel Orbital Systems. No financial terms were disclosed. Arc Machines is a portfolio company of Marwit Capital.

Orion ICG LLC, a portfolio company of Centre Partners, has acquired Therapy Staff Inc., a Midwestern provider of physical therapists, occupational therapists and speech language pathologists to healthcare facilities. No financial terms were disclosed.

Firms and Funds

Earlybird, a Germany-based venture capital firm, has closed its fourth fund with €127 million in capital commitments. Limited partners include Osaka Gas, Procific, the European Investment Fund, VCM and the KfW.

TPG Ventures is looking to raise $550 million for its third TPG Biotechnology Partners fund, according to a document from CalPERS.

CalPERS disclosed the following fund commitments: $50 million to Aberdare Ventures IV, $75 million to Apollo European Principal Finance Fund, $400 million to Ares Corporate Opportunities Fund III, $200 million to Asia Alternatives Capital Partners II, €500 million to CVC European Equity Partners V, $75 million to Levine Leichtman Capital Partners IV, $85 million to Lime Rock Partners V and $100 million to TPG Biotechnology Partners III.

Human Resources

Michael Finley has joined Court Square Capital Partners as a partner. He previously had been with The Cypress Group since its 1994 formation and, before that, worked in Lehman Brothers’ merchant banking group.

Ron Graves has been named permanent CEO of frozen yogurt chain Pinkberry. He had been a general partner with venture capital firm Maveron, and took over as Pinkberry’s interim CEO following Maveron’s investment in the company last October.

Frank Feraco has joined Wynnchurch Capital as an industry operating partner. He is the former president of Pentair Inc.’s Tool Group and, before that, man industrial products for Textron Inc.

John Cochran has joined Lovell Minnick Partners as a Los Angeles-based principal, where he will focus on the financial services industry. He previously was a principal with SV Investment Partners.

Diane Fraiman has joined Voyager Capital as a venture partner, and head of the firm’s new office in Portland, Oregon. She previously was senior VP of marketing and business development for Web application security software company Sanctum (acquired by Watchfire).