PE Week Wire: Wednesday, June 18, 2008

Dragging a bit this morning, as I was glued to local and national sports shows until around 1:30am. Passed out smiling, and woke up the same way. Even took the long way to Dunkin’ Donuts so that I could get a few extra minutes of radio gloating before settling in to write today’s news section (An aside: Many of you asked last week who writes the news section. I do, so please send on your info directly).

A few thoughts before getting onto business. If you could care less, just scroll down a bit:

• The “new” Celtics owners did not buy the team in order to make money, even though they almost exclusively consist of buyout pros, hedge fund managers and venture capitalists. It was an ego buy, particularly given how little the group gets for in-house concessions (building is effectively owned by the Bruins). But no matter: This thing is going to become a bonanza. I know more than a few folks who turned down the chance to join the limited partnership, and must be kicking themselves right about now.

• 60 Minutes this week had a report on sleep, and how a lack of it can lead to such things as diabetes. A few more 9:07pm starts, and I might have had to make a doctor’s appointment.

• When I interviewed Steve Pagliuca at Buyouts Madness, I asked him about talk that the Celts were lucky not to get the #1 draft pick last year. He smiled, and suggested that, had the team gotten it, they could have ended up with both Garnett and Al Jefferson.

• Want to know the next company getting acquired by a PE firm? Get yourself some season tix for next season and a pair of binoculars. Then watch who Pagliuca, Bonderman, Hutchins, etc. bring with them to home games. Those guests are often CEOs.

• This is the first banner since I began rooting for the team. Yes, I’m a local. I also used to dislike Larry Bird and that entire squad (I know, blasphemy). Something about being a contrarian meant that I didn’t begin caring until around 1993. Still love Antoine. How ridiculously spoiled have I been since moving back here in mid-2001?

• Thanks Doc.

*** A bunch of you answered yesterday’s Quiz question, which asked about a new cleantech firm targeting $3 billion for its inaugural fund. I should have been more specific: A new cleantech firm that has not yet publicly announced its existence. Try, try again.

*** No decision yesterday in the BCE case, which was heard by seven of the nine Canadian Supreme Court justices (yesterday I mistakenly said only three would participate). That’s not a huge surprise, although the court is certainly cognizant of a pending June 30 deadline (which the debt-holders have suggested is arbitrary and can be ignored).

This is still just an opening act to the main event – sponsors vs. lenders vs. board – with BCE shareholders trading the stock up in anticipation of the judges siding with BCE. Worth considering the alternative, however. If BCE were to lose, it would mean that bondholders are on equal footing with equity-holders, which would throw the entire Canadian LBO market into upheaval. Don’t think it will happen, but my records indicate that I’ve been wrong about one or two things before.

Top Three

LinkedIn Corp., a Mountain View, Calif.-based social networking company for businesspeople, has raised $53 million in Series D funding at a valuation of approximately $1 billion. Bain Capital Ventures led the round, and was joined by return backers Sequoia Capital, Bessemer Venture Partners and Greylock Partners. The company raised a $12.8 million Series C round in early 2007 at a valuation of around $250 million.

Morgan Stanley Infrastructure and the Ontario Teachers’ Pension Plan have agreed to acquire SAESA Group, a Chilean subsidiary of power company Public Service Enterprise Group Inc. (NYSE: PEG). The deal is valued at around $1.3 billion, including the assumption of $400 million in debt.

Helen Alexander is leaving her post as CEO of The Economist Group, in order to become a senior advisor to Bain Capital. The move will take effect on July 15.

VC Deals

Control4, a Draper, Utah-based maker of home control and entertainment system solutions, has raised $20 million in Series F funding, according to a regulatory filing. Shareholders include Foundation Capital, Frazier Technology Ventures, Thomas Weisel Venture Partners and vSpring Capital.

Neocleus, a Jersey City, N.J.-based provider of endpoint virtualization solutions, has raised $11.4 million in Series B funding. Return backers include Battery Ventures and Gemini Israel Funds.

ShotSpotter Inc., a Mountain View, Calif.-based provider of gunshot location systems for the public safety and military markets, has raised $7.5 million in Series D funding. The Westly Group led the round, and was joined by Norwest Venture Partners, Broidy Capital Management and return backers Band of Angels, City Light Capital, Claremont Creek Ventures, Labrador Ventures, Lauder Partners and Levensohn Venture Partners.

Lehigh Technologies Inc., a Naples, Fla.-based rubber recycling company, has raised a new round of funding from Kleiner Perkins Caufield & Byers and Index Ventures, according to VentureWire. No financial terms were disclosed for the deal, which will be used to fund construction of a new recycling plant. The company had raised an $18 million round led by Natural Gas Partners early last year.

Wazoo Sports Inc., a London, Ky.-based high school sports broadcast network, has raised $2 million in new VC funding from Meritus Ventures.

On Deck Capital Inc., a New York-based provider of financing for small businesses that wouldn’t normally qualify for bank loans, has secured a $100 million debt facility from Silar Advisors. On Deck had previously raised VC funding from RRE Ventures, Village Ventures, First Round Capital, Khosla Ventures and Contour Venture Partners.

Buyout Deals

Fenway Partners has acquired a majority stake in Preferred Freezer Services LLC, a Newark, N.J.–based provider of frozen seafood storage solutions, from TA Associates. Company management will retain a 25% ownership position. No financial terms were disclosed.

Providence Equity Partners and The Carlyle Group reportedly are part of a group looking to buy UK media group Informa PLC. Other firms believed to be interested include Apax Partners, Candover and Cinven.

ISS Governance Services is recommending that shareholders of The TriZetto Group Inc. (Nasdaq: TZIX) approve a $22 per share buyout offer from Apax Partners. The deal is valued at approximately $1.4 billion. TriZetto is a Newport Beach, Calif.-based provider of IT solutions for the healthcare supply chain. TriZetto customers BlueCross BlueShield of Tennessee and The Regence Group would participate alongside Apax as equity investors.

M2 Technology Partners, a new private investment company focused on global acquisitions of software and services businesses, has launched with an undisclosed amount of funding from Accel-KKR. M2 is led by Mark Duffell and Michael Piraino, who previously were with Epicor Software Corp. (Nasdaq: EPIC) as president/COO and CFO, respectively.

NBGI Private Equity has sponsored a £16 million management buyout of Rock Asphalte, a UK-based provider of roofing and structural waterproofing. Investec Growth and Acquisition Finance provided debt financing.

PE-Backed IPOs

RHI Entertainment Inc., a New York-based producer of made-for-TV movies and other television programming, raised $189 million via an IPO. The company priced $13.5 million shares at $14 per share, which was lower than the $16-$18 per share expectations. It will trade on the Nasdaq under ticker symbol RHIE, while JPMorgan and Banc of America Securities served as co-lead underwriters. RHI was previously known as Hallmark Entertainment, before being acquired and renamed by Kelso & Co. and members of company management in January 2006. Later that year, RHI acquired the domestic rights to Crown Media’s film library, which Crown had originally bought from Hallmark Entertainment six years earlier.

Eyeonics Inc., an Aliso Viejo, Calif.-based maker of ophthalmic medical devices like intraocular lens implants, has withdrawn registration for an $86.25 million IPO. The move comes after Eyeonics was acquired by Bausch & Lomb, a portfolio company of Warburg Pincus.

PE Exits

Boehringer Ingelheim GmbH has agreed to acquire Actimis Pharmaceuticals Inc., a San Diego-based biotech company focused on respiratory and inflammatory disorders. The deal would be valued at $515 million, in Boehringer is able to move Actimis’ lead asthma candidate from Phase 1 to Phase III clinical trials. Additional financial terms were not disclosed. Actimis has raised $7.5 million from Mitsui & Co. and Sanderling Ventures. VentureWire reports that the sale does not include four other Actimis drug candidates, which will be used as the basis of a new independent company. A formal VC round for that effort is expected to close within the next several weeks.

BMC Software (NYSE: BMC) has acquired ITM Software, a Santa Clara, Calif.-based provider of IT business management solutions. No financial terms were disclosed. ITM has raised nearly $35 million in VC funding from firms like Red Rock Ventures, InnoCal Venture Capital, Ascend Venture Group, Technology Partners, RBC Technology Ventures and Square 1 Bank.

IPC The Hospitalist Company Inc. (NYSE: IPCM), a North Hollywood, Calif.-based network of hospitalist physicians, has filed to sell five million shares in a secondary public offering. The company was trading at $22.08 per share prior to the announcement, which could value the sale at over $110 million. Credit Suisse and Jefferies & Co. are serving as co-lead underwriters. Selling shareholders include Scale Venture Partners, Morgenthaler Ventures, Bessemer Venture Partners and CB Health Ventures. Each firm would retain an ownership position following the sale. IPC went public this past January at $16 per share.

SAP AG (NYSE: SAP) has agreed to acquire Visiprise Inc., an Alpharetta, Ga.-based provider of manufacturing execution software. No financial terms were disclosed. Visiprise has raised around $100 million in VC funding since late 1999, from firms like RRE Ventures, Wheatley Partners, Canaan Partners, Westbury Partners, Morgan Stanley Venture Partners, Internet Capital Group, Accenture Technology Ventures, Investor Growth Capital, BlueVector, RB Webber & Co. and Teradyne.

PE-Backed M&A

MadVision Entertainment, a multimedia company focused on branded urban content, has acquired the Soul Train franchise from founder Don Cornelius. No financial terms were disclosed. MadVision is sponsored by InterMedia Partners.

Protus, an Ottawa-based provider of SaaS communications tools for small and mid-sized businesses, has acquired GOT Corp., a Montreal-based email marketing services company. No financial terms were disclosed. Protus has raised VC funding from firms like Bank of Montreal Capital Corp., EdgeStone Capital Venture Fund, B.E.S.T. Discoveries Fund and Covington Capital Corp. GOT had been backed by Celtic House Venture Partners, XDL Intervest Capital, BCE Capital and Mosaic Venture Partners.

WorldStrides, a Charlottesville, Va.-based accredited supplemental travel school, has acquired both the Field Studies Center of New York and Accent Travel Group. No financial terms were disclosed. WorldStrides is a portfolio company of Charlesbank Capital Partners.

Human Resources

David Martus has agreed to join Pegasus Capital Advisors, after having spent the past eight years as a private equity portfolio manager with the Colorado Public Employees’ Retirement Association. He begins the new job on July 21.

John Hunt has rejoined Goodwin Procter as senior council in the firm’s business law department. He also will be a member of its investment management practice. Hunt most recently was of counsel at Bingham McCutchen.

Nico Kirsten has joined PCG Asset Management as a vice president in the firm’s portfolio monitoring and reporting group. He previously spent eight years with PricewaterhouseCoopers.

John Arens has joined Liquid Realty Partners as a director. He previously was a vice president at Redwood Trust, a publicly-traded mortgage REIT.

David Handler and David St. Jean have joined Centerview Partners as partners. They will co-head the expansion of the firm’s investment advisory practice in the tech and telecom sectors. Each man previously was with UBS as a managing director and co-head of tech investment banking in the Americas.