PE Week Wire: Wednesday, June 11, 2008

I’m participating in Buyouts Midwest this morning, so in the meantime….

Coller Capital has released the latest edition of its Global Private Equity Barometer, a bi-annual survey of more than 100 limited partners. Nothing too shocking in the results, which included reduced portfolio returns, an anticipated slowdown in GP capital calls and a majority view that sovereign wealth funds either are, or will become, significant competitors for private equity dealflow (that last one might be more notable for the 42% who inexplicably disagree).

Coller also asked LPs to rank the best areas for GP investment over the next 12 months, and the results were a bit surprising. Not so much that European buyouts overtook Asia-Pacific buyouts for the top spot, but rather for North American venture placing show. This is an industry that many LPs have left for dead, unless they can access the sliver of top-tier GPs. Hell, even a lot of venture capitalists argue that the model is largely dead for those playing outside of the rarified decile.

Coller unfortunately gives numbers rather than arguments, so we’re not given any thought behind the ranking. Maybe it means that some of the negative talk is posturing. Or perhaps it’s an opposite reaction to North American buyouts falling out of favor (ranked #5, between Asia-Pacific venture and last-place European venture). Again, just hypotheses. Coller won’t let us post the actual document, but you can request it from them here.

Top Three

Boston Properties Inc. (NYSE: BXP), a real estate investment trust, has acquired the General Motors Building in New York from affiliates of Macklowe Properties for about $2.8 billion. The acquisition was completed through a venture among Boston Properties; US Real Estate Opportunities I LP, which is a partnership managed by Goldman Sachs Group Inc.; and Meraas Capital LLC, a Dubai-based private equity firm. Boston Properties has a 60 percent interest in the venture and will provide customary property management and leasing services for the venture.

Leiner Health Products Inc. has conducted and concluded an auction. The Carson, Calif.-based retailer signed an agreement to sell substantially all of its assets to NBTY Inc. for $371 million plus the assumption of certain liabilities and purchase price adjustments. Leiner estimates that the resulting consideration will be in excess of $400 million. Leiner is a portfolio company of both North Castle Partners and Golden Gate Capital. and

Constellation Brands Inc. (NYSE: STZ), a Fairport, N.Y.-based producer and marketer of beverage alcohol, has sold certain U.S. wine assets to Eight Estates Fine Wines LLC, a Sonoma, Calif.-based private firm that does business as Ascentia Wine Estates. Constellation received $209 million in cash, and could receive up to an additional $25 million in payments if certain objectives are achieved by the buyer. Ascentia is a partnership including Jim Debonis, the former chief operating officer of Beam Wine Estates; W.J. Deutsch & Sons, one of the largest marketers of wine in the US; and GESD Capital Partners LLC, a San Francisco-based private equity firm.

VC Deals

GIMV, a Brussels-based venture capital firm, and its Halder IV fund have sold five minority shareholdings to private equity fund BECAP. The transactions include GIMV’s 10 percent stake in PVC window frame manufacturer Gaelan and its 32 percent in Wichard, which manufactures and distributes hardware for sailing boats and for the medical, automotive and aeronautic industries.

5th Finger, a San Francisco-based mobile marketing company, has raised $7 million from the leading Australian venture capital firm, Starfish Ventures. 5th Finger will use the capital to fund its ongoing growth in the U.S.

Yap Inc. has secured $6.5 million in Series A financing. The Charlotte, N.C.-based company said the funding was led by SunBridge Partners. The round also features participation by Harbert Venture Partners, Pittco Capital Partners, and existing individual investors. As part of the round, partners from SunBridge and Harbert are joining Yap’s board of directors, with Timothy Biltz continuing as chairman.

ECO2 Plastics Inc., (OTCBB: ECOO), the recycling company based in San Francisco, has raised $6.5 million in new financing. The investment was led by Trident Capital and included a group of smaller investors led by Thompson Hutton LLC. In addition to the new capital, existing investors converted more than $6 million in short term notes and accrued interest, prior to the close of the financing.

PayMate India, a mobile payment company, has closed its second round of investment at $9 million led by Mayfield Fund and participation from existing investors, Kleiner Perkins Caufield & Byers and Sherpalo Ventures. Nikhil Khattau of Mayfield will join the board of PayMate. In July 2006, Sherpalo Ventures and Kleiner Perkins Caufield & Byers invested $5 million in PayMate.

Madrona Venture Group has closed its fourth venture fund, raising $250 million to continue investing in early-stage Northwest technology startups, The Seattle Times reported. The fund exceeded its target of $225 million. Existing institutional investors, including TheUniversity of Washington, participated in Madrona Venture Fund IV LP. Several new investors such as Cambridge and Oxford universities also participated.

Merrimack Pharmaceuticals Inc., a Cambridge, Mass.-based biotechnology company focused on the discovery and development of novel treatments for autoimmune disease and cancer, has raised $60 million in a series F private equity financing.Existing and new investors participated in the financing including Credit Suisse First Boston Next Fund Inc., Crocker Ventures, HNI Holdings Ltd., funds advised by Noonday Asset Management LP, TPG-Axon Capital, and WT Investment Advisors Fund LP.

Capzles, a Los Angeles-based social media company that empowers people and brands to share their stories through visually rich multimedia timelines, has launched its social storytelling network and has closed a series A funding round.

PNG Ventures Inc. (OTCBB:PNGX) has signed a binding letter of intent with Earth Biofuels Inc. (OTCBB: EBOF) for PNG Ventures to purchase a 100 percent ownership in Earth Biofuels’ Earth LNG Inc. unit.

On-Demand PPM vendor Innotas has completed its series C venture financing totaling $6 million. The round was driven by ArrowPath Venture Partners, Velocity Interactive Group, and several strategic investors.

deCarta, a San Jose-based supplier of software and services for the Location-Based Services industry, has received a strategic investment of $6 million from T-Mobile Venture Fund managed by T-Venture, the venture capital arm of Deutsche Telekom AG. T-Mobile Venture Fund joins deCarta’s existing premiere investors Cardinal Venture Capital, Mobius Venture Capital and Norwest Venture Partners.

Buyout Deals

Denver-based private equity firm Gart Capital Partners and Colorado Baggage Co., a Colorado-based luggage retailer, agreed to acquire Dallas-based Bag ‘n Baggage out of bankruptcy. The transaction, which is valued at $10.5 million, will form a new company that will operate as Colorado Bag ‘n Baggage.

Summit Partners makes a minority investment in Associa Inc., a Dallas-based community association management and developer services company. The size of the investment was not disclosed. Matheson Law Partners PLC served as legal counsel for Associa, and Weil, Gotshal & Manges LLP served as legal counsel for Summit Partners. and

PE-Backed IPOs

CCS Medical Holdings Inc. plans to withdraw its initial public offering because of current public market conditions. The medical-supply management company had planned to offer 10 million shares priced at $14 to $16 a share. The Clearwater, Fla.-based company’s principal shareholder is Warburg Pincus LLC.

Mistras Group Inc. seeks to hold an initial public offering on the New York Stock Exchange. The Princeton Junction, N.J.-based provider of technology-enabled testing software is planning an IPO worth up to $172.5 million. It has named Credit Suisse and JPMorgan as co-lead. Mistras will use IPO proceeds for general corporate purposes, including working capital and for possible acquisitions. The company is in the portfolio of both Thayer Hidden Creek and Altus Capital Partners.

PE-Backed M&A

Riverside Co. has drawn up an add-on for IndustrieHansa Engineering & Consulting, a business division of Riverside’s Advanced Information Systems Group. Riverside had designs on AICAT CA Technologies Consulting GmbH, a German digital engineering company.

Silver Lake Partners’ Silver Lake Sumeru unit has acquired ChoicePoint Inc.’s (NYSE: CPS) government software businesses, specifically i2 Inc. and i2 Ltd., for $185 million in cash. ChoicePoint reclassified the operations of i2 as discontinued operations in the fourth quarter of 2007. and

CAM Commerce Solutions Inc. (NASDAQ: CADA), a Fountain Valley, Calif.-based provider of retailing and payment processing solutions, has entered into a definitive agreement to merge with an affiliate of Great Hill Partners. Great Hill will acquire all of the issued and outstanding shares of CAM Commerce for a total of about $180 million, or $40.50 a share. and

Firms & Funds

Allied Resource Corp., a Wayne, Pa.-based climate technology group operating and servicing energy related businesses, has closed a $53 million preferred growth equity financing with PCG Capital Partners, a private equity firm in La Jolla, Calif. Riverside Management Group acted as the lead advisor to Allied on the transaction. and

Hunt Ventures, a Dallas and Austin, Texas-based venture firm, has raised $140 million, in part from an unnamed institutional investor. The money raised is for the firm’s first official fund. VentureBeat Wire reported.

Human Resources

General Jack Keane, Donald S. Beyer Jr., and Kevin J. Fay have agreed to serve on CDC Real Estate Opportunity Fund I’s board of directors. C. Daniel Clemente formed the private equity fund this year. Keane is senior managing director and co-founder of Keane Advisors LLC and a senior adviser to Kohlberg, Kravis & Roberts. Beyer was Lieutenant Governor of Virginia and President of the Senate of Virginia from 1990 to 1998. Fay is president of Alcalde & Fay, a government and public affairs firms in the Washington, D.C. area.

Sam Rovit, former president and CEO of Swift & Co., returns to Bain & Co. as a partner and leader of newly-formed Bain Corporate Renewal Group. In 2007, Brazil’s JBS Co. acquired Swift. Rovit originally joined Bain & Co. in 1988. He was elected to the firm’s partnership group in 1995.

Centerview Partners has hired Lisbeth Barron, a media and entertainment investment banker and partner from Bear, Stearns & Co., as a partner.

Centerview Partners is expanding its media practice.

Lazard Ltd. (NYSE: LAZ) has hired Wouter Gabriels as a managing director in Investment Banking in Europe, effective Sept. 1, 2008. Gabriels was the President of the Chancery and Chief of Staff of Prime Minister Guy Verhofstadt’s Office in Belgium. He will work primarily out of France and Belgium, and will focus on European and cross-border mergers and acquisitions.

Franklin Resources Inc., which operates as Franklin Templeton Investments, has named William Yun executive vice president of alternatives strategies. It is a new role dedicated to overseeing Franklin Templeton’s specialized and alternative investment business which includes local asset management, joint ventures, real estate, fund of funds and dedicated private equity. In addition, Vijay Advani has been named executive vice president of global distribution, with oversight of both retail and institutional distribution.